As of December 23, 2022, the report of the state bank of Pakistan revealed that total liquid foreign reserves held by the country stood at US$ 11.71 billion, which alarmed Pakistan’s government about the horrible situation of the country’s economy.
Since the start of Shehbaz Led-PDM (a democratic government in Pakistan) in 2022, Pakistan’s economy appears to have declined from $10.5 billion in reserves to $5.8 billion.
Additionally, Pakistan’s industry has been badly hurt by economic crises and the instability of the country’s currency.
Automobiles, equipment, and machinery shrank by 30.56 percent, 24.62 percent, and 38.01 percent, respectively, while large-scale manufacturing fell by 7.75 percent.
Clearly, because of the market conditions in Pakistan, the shuttering of Pakistan’s largest textile industry, Nishat Chunian Limited, exposed that Pakistan is just nearing default.
As general elections are coming up this year, Pakistan’s government is afraid to make any statements in order to protect their political careers.
Furthermore, rate instability caused the currency to fall against major currencies, particularly the US dollar, which was selling for 186 RS in April 2022 under the government led by the PTI (Pakistan-Tehreek e insaaf) but is now selling for 226 RS in the interbank market, according to current foreign exchange rates.
As of November 5, 2022, Finance Minister Ishaq Dar announced and assured China ($9 billion) and Saudi Arabia ($4 billion) aid, but it has yet to be implemented.
“We will not let you down, Xi Jinping, President of China, said. Pakistan’s government has no choice but to beg other countries for help,” he added.
However, this is the first time in Pakistan’s history that the government has been unable to find an alternative for the economic fallout because, despite having natural resources and a significant strategic location, Pakistan has been unable to capitalize on global opportunities.
In order to survive, it is obligatory to find a way to stabilize Pakistan’s economy as political instability and foreign debt are necessary to be paid.
If the current government is unable to compete with the situation, most probably the lower classes will be the victims of this concern.
However, the situation now seems to be totally out of the hands of Shehbaz’s government.