http://www.nation.com.pk/pakistan-n...eb-2013/economic-problems-to-grow-in-5-months
Pakistans economic maladies would manifold in remaining five months of the ongoing financial year due to depleting foreign exchange reserves, unsustainable public debt, higher fiscal deficit than budgeted as well as problem of electricity loadshedding, it was learnt on Monday.
Sources informed that caretaker government would have no option than to take crucial economic decisions in the months to come. The incumbent government is not taking any crucial economic decision at present due to political consideration. The countrys foreign exchange reserves would remain under pressure. The countrys foreign exchange reserves decline to $13.40 billion on February 14 while [HI]Pakistan has still to repay over $1 billion to International Monetary Fund (IMF) till June 30[/HI] this year that would further put pressure on reserves.
Similarly, the countrys fiscal deficit likely to go beyond 6.5 percent of the GDP at the end of current fiscal year against the target of 4.7 percent due to unlikely foreign inflow worth of $2.1 billion under various heads, lower revenue collection and high power subsidy. The government has injected over Rs 200 billion into the power sector in July-February 15 period, which is likely to increase in the months to come.
Meanwhile, the government has failed to resolve the problem of circular debt and the entire allocation of budgetary subsidies for the current fiscal year were consumed in the first five months. Similarly, the revenue collection target has been revised to Rs 2,190 billion from earlier Rs 2,381 billion.
Sources said that present government is not taking any decision including to approach IMF and to increase power tariff that might result in losing public support in the upcoming general elections. Sources said that caretaker government is expected to take some challenging economic decisions, which the present government is not taking at present due to political considerations.
Sources said the caretaker setup would have all the powers of an elected government and may take some challenging decisions to deal with massive problems created. The job of an interim setup would be difficult as it would deal with depleting foreign exchange reserves, unsustainable public debt, higher fiscal deficit than budgeted as well as problem of electricity and gas shedding.
Comments: For about over a year I have been stating that we have 18 months before things start blowing up. End of march or april, that is what I was expecting about a year ago. I still feel you are going to see a sharp rise in law and order situations, severe inflation in food and energy prices, water shortages, shortage of medicines. Buy and hold $100 bills in cash. Store portable drinking water, grain/pulses/rice. Maybe gas cylinders. Medicines/first aid. And interact with your neighbours much more than you normally do. And help the ones in severe need. All the best.
