Pakistan’s default risk is increasing rapidly as all the economic indicators are going down, from exports to foreign reserves, from foreign investments to the closure of major cars producing plants (Toyota and Suzuki), the situation is not looking encouraging.
The delay in the loan tranche of the International Monetary Fund (IMF) has increased the speculations and it is being reported that the fund has asked Islamabad to raise the prices of electricity for the loan tranche, which the incumbent government cannot afford.
Textile exports, which are regarded as the backbone of Pakistan’s exports, are also going down. All Pakistan Textile Mills Association (APTMA) Patron-In-Chief Gohar Ejaz on Monday wrote a letter to Prime Minister Shehbaz Sharif over the textile industry issues.
The letter stated that If the textile industry issues are not resolved the exports will decrease.
He demanded PM Shehbaz that the gas prices for the textile industry in Punjab should be decreased and equaled to Sindh.
Automobile company Pak Suzuki Motor Company Limited has announced to shut down its production plant from January 2 to 6.
Pakistan Suzuki Motors wrote a letter to the Pakistan Stock Exchange (PSX) that the production process of cars and motorcycles will be completely shut down from January 2 to 6. According to the automobile company, the management decided the shut down due to conditional permission for the imports of the auto parts and completely knocked down (CKD) kits.
The firm stated that its supply chain is affected due to restrictions of the State Bank of Pakistan (SBP). Earlier, in the month, Indus Motor Company (IMC) also announced to shut down its manufacturing plant for 10 days due to the imposition of a ban on the imports of completely knocked down (CKD) kits by the central bank.
The fluctuation in the stock market is another worrying issue for the government. Former finance minister Miftah Ismail has been saying to choose IMF or default option, but the incumbent Finance Minister, Ishaq Dar is of the view that there is no threat of Pakistan going to be default.
Being positive is a good thing, but the ground situation is telling the other story, the incumbent government should focus on the issue before it gets too late.
