Daily Times

Pakistan stands at a critical juncture, still very much in the midst of negotiating a $6.5 billion bailout with the IMF, vital to avoid defaulting on external payment obligations. Despite securing substantial bilateral financing from various lenders, including UAE, Saudi Arabia, and China, the IMF remains unconvinced that we have enough funds to remedy our balance of payments crisis. The petrol subsidy program introduced by Prime Minister Shahbaz Sharif, echoing a similar subsidy by his predecessor Imran Khan, further complicated an already tense situation, raising questions about Pakistan’s commitment to fiscal responsibility.

With the IMF still deliberating the implications of the subsidy, Pakistan has become the only South Asian country yet to secure a bailout from the multilateral lender-even Sri Lanka, which defaulted last year, obtained financing recently. Our projected growth output for the year has been slashed from 6% to a mere 0.2%, and the rupee is among the weakest-performing currencies globally, leaving Pakistan more isolated than it was a decade ago.

This crisis is the culmination of decades of shortsighted policies, and there are no quick fixes for our predicament. Rising utility costs and higher food prices will likely continue to slow down industrial activity until external financing is secured. The scale of adjustments required is unmatched in our country’s history, with the government expected to come up with a combined Rs. 700 billion worth of expenditure cuts through increased tariffs and new taxes.

Pakistan’s inflation has now outpaced Sri Lanka’s as Asia’s fastest. With the stakes so high, the government must work tirelessly and demonstrate its commitment to the required adjustments and ensuring long-term stability for the nation. Securing the bailout is just the beginning; we must also invest in our future by promoting sound policies, fiscal discipline, and transparency. To achieve this, we need to foster public awareness and support for economic reform, empowering citizens to hold the government accountable for its decisions and ensuring that the nation’s interests are prioritized over short-term political gains. Together, we can navigate these turbulent waters and chart a course toward a more stable Pakistan, even if this seems inconceivable right now. *