Is Pakistan following the trajectory of Sri Lanka’s crisis now?

Over the last few months, Sri Lanka has been making it to the news daily with its economic instability and people’s anger towards the government. 

 

While this may not be worth taking notes of, it seems that Pakistan right now is heading in the same direction. In fact, the country’s finance minister recently also relayed the news that the country could certainly expect some ‘bad days’ in the future.

 

But why?

 

Blame the covid or the past govt, but Pakistan is undergoing a serious economic malfunction right now.

 

Right now, the Pakistani rupee is at an all-time low and the inflation costs are going through the roof. The country is witnessing an all-time high inflation rate and the country’s economic situation right now definitely reflects that.

 

To make matters worse, the country has also taken multiple giant loans for improving the infrastructure of the country, which in turn has left the country with an empty treasury.

 

Because of that, the country is seeking a $6 billion loan from the IMF to be able to function normally, yet it hasn’t been approved still.

 

The reason for the disapproval of the tax is that the loan seeks Pakistan to improve the tax collection of the country, but Pakistan hasn’t delivered on that yet. However, right now, the country is cracking down on the extra taxes on fuel and power just to make it easier for them to get approval on their loan.

 

And if the loan isn’t approved, the country could actually witness an economic situation similar to that of Sri Lanka. 

 

All and all, what matters the most is how the country navigates through this instability and whether the neighboring countries would come in with a helping hand.

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