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Pakistan facing loan default as its economy is on the brink of meltdown

Pakistan is facing an economic crisis with the possibility of a loan default and economic collapse looming over the country. The International Monetary Fund (IMF) had previously refused to provide financial assistance to Pakistan but has now agreed to provide it on very harsh conditions, while the chances of getting help from other sources are slim. The current government led by Prime Minister Shehbaz Sharif has failed to find a solution and has been accused of mismanaging the economy.

On December 24 Pakistan’s EAM Bilawal Zardari was invited by India’s EAM Subrahmanyam Jaishankar for the Shanghai Cooperation Organisation meeting which will take place in May. Pakistan’s media started heaping praises as according to them it was a sign that India is ready to start dialogue with Pakistan, but the facts could be entirely different. As India has the presidency for the SCO in 2023, it is India’s responsibility and duty to invite all the SCO members to the summit.

Even though the people who constantly voice their opinion on India and Pakistan dialogue has painted a similar picture as the Pakistan’s media but India’s stance with Pakistan remains the same: If Pakistan wants to resume talk and normalize relations then they will have to put an end to the cross border terrorism.

The current state of Pakistan is in shambles as the country is trying to finance debt-relief package from various sources. The problems are never-ending for Pakistan as they face IMF’s tough conditionalities for the loan.

Pakistan is not just on the brink of an economic collapse but also running out of ideas on how to save itself from the current state that they are in. The economic meltdown is not the only problem that they are facing at the moment, but the polity is also divided into various groups within the country and each one of them is trying to undermine the other while completely ignoring the economic crysis and all of this in itself is pulling the country apart.

If the IMF program gets back on the track, it should sustain Pakistan’s economy till financial year June 2023. For the next financial year though, they will need more $30 billion to manage itself and IMF is already putting very harsh conditions on Pakistan. All these conditions are not just politically ruinous but also financially devastating for the people.

The future looks bleak for Pakistan and unless something drastic is done, the country could be facing an unprecedented crisis in its history.


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