Despite the devastating floods in Pakistan, the finance minister on Sunday, in a conversation with Reuters, said that the country would “absolutely not” fail its financial obligations, indicating no changes will be made to the economic reforms.
Miftah Ismail, Finance Minister, said, “The path to stability was narrow, given the challenging environment, and it has become narrower still.” He further added, “But if we continue to take prudent decisions – and we will – then we’re not going to default. Absolutely not.”
Concerns started to flow after the horrific floods that caused billions of infrastructural damage and killed over 1,500 people. However, due to its harsh economic policies, the South Asian country was able to resume its IMF programme but didn’t last long after the record-breaking rainfall began.
Pakistan’s central bank still stands at $8.6 billion despite receiving IMF assistance of $1.2 billion in August.
Ismail asserted that despite the disaster, most of the programmes are still on track. He further claimed that even though the floods caused a $4 billion damage increase in imports and exports, Pakistan would still be able to boost the reserves up to $4 billion. Ismail predicted that the current account deficit wouldn’t rise by more than $2 billion.
Given that Pakitan’s economy had already sustained an $!8 billion loss in floods which might rise to $30 billion, Ismail claimed that the international markets were nervous about the country. However, he said that the situation will get back to normal in 15 to 20 days and that the market will realise Pakitan’s commitment to prudence.
Ismail promised that the upcoming payment of $1 billion in international bonds would surely be made. Furthermore, the finance minister stated that funding sources have been secured, including over $4 billion in the Asian Development Bank, the Asian Infrastructure Investment Bank, and the World Bank.
Miftah also stated that $5 billion will commence from Qatar during the current fiscal year. He went on to say that the $1 billion in UAE investment will have a significant impact on Pakistan’s stock market. Ismail said that by the end of 2023, a $3 billion pledged investment from Qatar will happen.
Furthermore, he stated that Saudi Crown Prince Mohammed bin Salman has assured Pakistani Prime Minister Shehbaz Sharif of a $1 billion investment.
(With inputs from agencies)
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