As per the statistics shared by BitTribute.com with the current economy for most Asian countries struggling due to rising inflation, some are worse hit than others.
One particular country that has become a cause for concern is Pakistan, which has seen its foreign reserves drop below $3 billion. The country lost 5.5% of its reserves, which were equivalent to $170 million.
This dipped the country’s reserves below the $3 billion threshold, leaving it with an anaemic value of $2.91 billion. The loss in foreign reserves has further deepened the economic concerns of the country as it struggles with crisis after crisis.
However, the $2.91 billion that the country now holds in foreign reserves is not completely accurate, as it also holds an additional $5.62 billion in various commercial banks, which has even put many companies within the country into a serious concern.
Not only are many concerned with the economic issues that can stem from the lack of the necessary funds for imports, but they are also worried about the social issues that can arise as well.
Media reports from the country are painting a very bleak picture for the future of Pakistan, as the country only has enough to cover as many as three weeks’ worths of imports. Other than that, it would have completely depleted its foreign reserves.
The Already Difficult Economic Situation in the Country
The rapidly decreasing reserves of Pakistan simply made the country’s already scary economic predicament much worse. Further social unrest and political misinformation have led to the country hanging on by a thread.
Pakistan has been holding talks with the IMF in order to obtain the assistance that it needs to contain this otherwise worsening financial situation. The financial situation is only made worse by factors like skyrocketing inflation and depleting foreign currency reserves.
There was also the issue that the country’s currency reached historic lows and was forced to remove various currency controls that were artificially holding the currency for Pakistan up. Therefore, what little resistance the falling currency faced soon started to fall even further.
As a result, of these poor decisions, the rupee continues to decline in value against various currencies like the dollar and the euro. And with current inflation, the only real question on everyone’s mind is how long Pakistan will last.
Other Serious Issues that Pakistan Seems to be struggling with
The economic turmoil of the company is not the worst thing that it has to deal with, however. There are a number of other major issues that are affecting the country that has yet to be resolved. Flooding followed by the monsoon rains in the country affected millions.
Other than the individuals who lost their lives in the flood, several others were injured, and millions lost their homes and means of livelihood.
According to different estimates, the floods were responsible for nearly $30 billion in damages alone, making it one of the most expensive crises to hit the country.
There has also been an issue with increased inflation, as well as the impact that has come as a result of Russia’s invasion of Ukraine. The result of the ensuing war increased prices for both energy and food.
Furthermore, Pakistan’s continued political uncertainty has further made issues difficult for the country as politicians continue to grab power on a sinking ship.
A Serious Risk of Defaulting
Along with the country continuously struggling with its economic crises, it is looking to come to an agreement with the IMF to possibly unfreeze some of the assets that it was trying to get for a loan.
However, even if it is to receive $1 billion from the IMF, which is only a bandaid, that will not do much to quell the very serious concern that it will still need significantly more if it is to survive. And only when it receives the funding it needs can it sustain its currency.