Advertisement
Wednesday, Oct 20, 2021
Outlook.com

Running On Empty

Economic collapse looms large with Islamabad on the verge of defaulting on debt repayments

Running On Empty
Running On Empty
outlookindia.com
-0001-11-30T00:00:00+05:53

THE ordinary man in Pakistan doesn't have to look at prime minister Nawaz Sharif's grim face to know that his country is on the verge of economic ruin. He knows it instinctively. The stockmarket is hovering at its nadir, the banking system has gone haywire, and the government, which has never defaulted in its 50-year history, is set to announce a moratorium on debt repayments in the next couple of weeks.

Not surprising. With an outstanding external debt of $30.7 billion, annual debt servicing comes to around $3.7 billion in the current fiscal. But Pakistan's foreign exchange reserves have sunk to an all-time low of $750 million. All other fund flows have virtually dried up thanks to sanctions, and further borrowing overseas is not a viable option anymore. Add to it the constant flight of capital from the country. Says an official: "This is just the beginning. If we can't raise another half a billion dollars in July for debt servicing, Pakistan may default in August."

 With push coming to shove, the government is...

Advertisement

Outlook Newsletters

Advertisement
Advertisement
Advertisement

Read More from Outlook

Poonch: Locals Asked To Remain Inside As Army Plans Large Scale Operation To Hunt Down Militants

Poonch: Locals Asked To Remain Inside As Army Plans Large Scale Operation To Hunt Down Militants

Indian Army's operation comes as a retaliation to the October 11 killing of an army officer and four soldiers during an encounter in Poonch sector.

LIVE: Uttarakhand Rescue Operations | 11 Trekkers Go Missing

LIVE: Uttarakhand Rescue Operations | 11 Trekkers Go Missing

At least 46 people have died in rain-related incidents in Uttarakhand so far. Union Home Minister Amit Shah will be visiting the state today.

T20 World Cup 2021: India Thrash Australia By Nine Wickets In Final Warm-up Game

T20 World Cup 2021: India Thrash Australia By Nine Wickets In Final Warm-up Game

After restricting Australia to 152/5, India chased down the target in just 17.5 overs. Catch highlights of IND vs AUS, warm-up match here.

Lakhimpuri Kheri: Supreme Court Asks UP Govt To Speed Up Investigation

Lakhimpuri Kheri: Supreme Court Asks UP Govt To Speed Up Investigation

The Supreme Court asked the Uttar Pradesh govt to record statements of remaining witnesses in the Lakhimpur Kheri case.

Advertisement