Islamabad, 19 January 2023 (GNP): The former Finance Minister of Pakistan, Hafiz Pasha, has warned that in case Pakistan defaults, the country’s inflation rate can skyrocket to 70%. Even if the International Monetary Fund’s (IMF) loan program is continued, inflation will still rise by at least 35%, owing to the lender’s strict conditions.
Hafiz Pasha predicted that Pakistan’s economy is likely to remain in stagflation for this year. He said this while addressing members of the Pakistan Industrial and Traders Associations Front (PIAF) on Tuesday, 17 January 2023.
He stated: “If the government implements the key reforms agreed with the IMF, including an Rs50 levy per litre on POL, an electricity tariff hike of 40%, doubling of the gas tariff, and shift to market-based exchange rate policy, the inflation rate could exceed 35%.
If the government does not implement the agreed reforms, it will lead to a termination of the IMF programme and will virtually dry-up the country’s capital.”
Also Read: Government might increase petrol prices
He added further highlighting: “Our reliance on expensive foreign loans has proven to be disastrous. In the first 65 years, the country’s debt was $65 billion. This jumped to almost $130 billion in the next seven years as we enhanced our reliance on high-interest loans that are difficult to payback.”
