Pakistan will struggle to escape from its ‘slowly shrinking’ economy which is marred the cycle of debilitating debt repayments, country's former Prime Minister Imran Khan said. He suggested that the government needs to break out of the borrowing cycles and prioritise domestic reforms.
In an interview with Financial Times, the Pakistan Tehreek-e-Insaf (PTI) chief said the country is ‘stuck’ in between economic crises and asked whether the solution to it is by getting more loans or ‘restructure the way we run the country’. He further added that there is a need for a ‘surgery’ in Pakistan in the way how the government in the country is being run.
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Pakistan is facing one of the worst economic crises of the country. According to experts, the country is at a risk of defaulting and is battling to revive around $7 billion IMF lending programme. Its foreign reserves have also tumbled to $4.2 billion which could only be enough for one month's worth of imports. Inflation in the country has reached an all time high at 35% in March.
Khan, who is facing a number of legal challenges, said his team was developing a strategy to juggle loan repayments. “We're sitting with our economist (on) how to come up with a plan with which we can sit with the IMF and give them a viable way of being able to pay our debts,” he told the UK-based daily, adding that, “But at the same time, our economy should not be choked so that our ability to pay debt goes down.”
{{/usCountry}}Khan, who is facing a number of legal challenges, said his team was developing a strategy to juggle loan repayments. “We're sitting with our economist (on) how to come up with a plan with which we can sit with the IMF and give them a viable way of being able to pay our debts,” he told the UK-based daily, adding that, “But at the same time, our economy should not be choked so that our ability to pay debt goes down.”
{{/usCountry}}He claimed that servicing any debts would be possible when dollar earnings is increased through exports. “Unless we increase our dollar earnings to exports, I don't see how we would be able to service any debts in Pakistan, whether it's Chinese or Paris Club or commercial debts,” he said.
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Khan was ousted form his office as Prime Minister in a no-confidence vote last year. Majority of the country's economic pressures began during his time in office. He is now engaged in a stand-off with incumber Prime Minister Shehbaz Sharif, who failed to come to terms with IMF's recommendations to stabilise the economy.