Islamabad [Pakistan], February 19 (ANI): Pakistan’s external debt servicing rose by 70 per cent in the first two quarters of 2022-23, worsening the shortage of dollars, Dawn reported. In the first half of the fiscal year, Pakistan paid USD 10.21 billion in external debt servicing while in the same period of 2021-22, the country paid USD 6 billion, State Bank of Pakistan‘s (SBP) data showed.
As per the data, Pakistan had to pay USD 6.77 billion, an unusually high amount, in external debt servicing in October-December. The amount of debt servicing in the second quarter of 2022-23 was almost twice the sum (USD 3.45 billion) that the country paid in the preceding quarter of the same fiscal year.
Such a high level of debt servicing in the first half of 2022-23 drastically reduced the foreign exchange reserves of the SBP, which is responsible for such payments. Foreign exchange reserves of the SBP are hovering around USD 3.2 billion, according to Dawn.
The inflows from the International Monetary Fund (IMF) and other global institutions could not be unlocked despite a long spell of talks with the Washington-based lender in Pakistan. Pakistan and International Monetary Fund failed to reach a staff-level agreement to unlock the USD 1.1 billion loan tranche after 10 days of “tough” talks, The News International reported. The negotiations which took place between IMF and Pakistan from January 31 to February 9, concluded in Islamabad. The IMF’s mission had arrived in Islamabad to hold talks with Pakistani authorities.
Last year, in July, Pakistan’s external debt servicing rose to USD 10.886 billion in the first three quarters of 2021-22 compared to USD 13.38 billion in the entire FY21. The external debt servicing was just USD 1.653 billion in 1QFY22 against USD 3.51 billion in the first quarter of 2020-21.
However, the debt servicing jumped to USD 4.357 billion in 2QFY22 and further to USD 4.875 billion in 3QFY22, reported Dawn. The increasing size of the external debt servicing in each quarter indicates the government has been borrowing dollars at higher commercial rates to meet its foreign debt repayment obligations, reported Dawn. (ANI)
Pakistan’s weekly inflation surges to 38.4pc
Islamabad [Pakistan], February 19 (ANI): Cash-strapped Pakistan recorded a new high in inflation as it went to 38.42 per cent in the outgoing week, both on an on-year and on-week bases, reported Dawn citing official data.
The price rose significantly mainly driven by onions, chicken, cooking oil and a massive jump in fuel costs. As a result, short-term inflation, measured by Sensitive Price Indicator (SPI), jumped to 38.42 per cent on a year-on-year basis for the week ended on Feb 16, rising from 34.83pc in the previous week, the Pakistan Bureau of Statistics (PBS) said.
The hike in prices is the highest annual rise since the week ending Sept 15, 2022, when the SPI inflation was 40.6 per cent, reported Dawn. The week-on-week inflation also jumped to 2.89 per cent from 0.17 per cent a week ago. Of the 51 items tracked, the prices of 34 items increased, five items decreased, whereas those of 12 items remained unchanged.
In contrast, the highest year-on-year fall was recorded in the prices of tomatoes (-65.3 per cent), chilli powder (-7.42 per cent), and electricity for the income group earning up to Rs17,732 per month (-7.5 per cent). Recently, the Pakistan government has increased the price of petrol to a historic high, Geo News reported.
The price of petrol has been moved up to Rs 272 per litre after an increase of Rs22.20, a press release from the Finance Division read Wednesday night, to appease the International Monetary Fund (IMF) for unlocking the critical loan tranche, hours after unveiling a tax-loaded ‘mini-budget’.
The Pakistani rupee has fallen sharply against the dollar since an artificial cap on the local currency was removed last month to allow its value to be decided by a market-based exchange rate. The price of high-speed diesel has been increased to Rs 280 per litre after a hike of Rs17.20. Kerosene oil will now be available at Rs 202.73 per litre following an Rs 12.90 hike. Meanwhile, light diesel oil will be available at Rs196.68 per litre after an increase of Rs 9.68, reported Geo News. (ANI)
