IMF Bailout Programme’s Suspension:
Foreign Loans to finance 5% of Budget Deficit;
More people to fall into web of chronic poverty
The severe consequences of the suspension of International Monetary Fund (IMF) Bailout Programme, due to non-compliance of government to act upon what it agreed in principle, on the economy of Pakistan have already started to surface and in the next fiscal year, only 5% of the deficit in Budget will be filled with the foreign loans as most of the foreign lenders have also stopped helping Pakistan besides the IMF that suspended nearly $11.3 billion.
Consequently the government is left with no other option than printing more currency notes that will further cripple the already limping economy of the country. It will lead to inflation rising and squeezing out the private sector lending. All these steps are feared to be surely dragging more people into the vicious circle of poverty and hampering the economic growth of the country.
Experts fear that the government will be forced to borrow a heavy amount from the commercial banks that will result in increased mark up rate and decreased investment.