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Some serious efforts by Pakistan government to stabilize economy

2019/07/05 12:00

By Kamlesh Trivedi

 

Financially troubled Pakistan has started receiving oil supply from Saudi Arabia on deferred payment from the current month. In a statement last week, the Saudi Arabian embassy in Pakistan announced that “Pakistan will start receiving monthly oil supplies worth $275 million from Saudi Arabia with effect of Jul 1, 2019.”

In an attempt to put Pakistan’s battered economy back on track, Pakistan’s Prime Minister had requested Gulf countries to extend financial support late last year. In response, the Saudi Arabian government had offered $3 bil worth of financial assistance, along with supply of crude oil on deferred payment. Among other Gulf nations, United Arab Emirates (UAE) had announced a package worth $6.2 bil for Pakistan but UAE did not offer supply of crude oil on deferred payment. Pakistan had requested UAE to offer deferred payment facility worth $3.2 bil against crude oil supply in addition to the $6.2 bil financial package.

Pakistan’s foreign exchange reserves had fallen to around $6.6 bil in January this year, which was barely enough to cover two months of its import requirement. Pakistan’s current account deficit had increased to around $19 bil which was expected to move up further to over $20 bil in 2020. However, with transfer of funds as loans to Pakistan by UAE, Qatar and Saudi Arabia, Pakistan’s reserves have improved slightly since February. In January, Saudi Arabia transferred $3 bil and UAE transferred $1 bil. Qatar just last week transferred $0.1 bil to Pakistan.

Pakistan plans to approach the International Monitory Fund (IMF) for further assistance and hopes to attract investment in the infrastructure sector to improve its economy. A series of measures have been planned by the Pakistan government to bring back the country’s economy on track. As part of the measures, the Pakistan government had increased natural gas tariff by 190% in late June despite resistance from most bulk consumers.   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

India : Energy Desk  Kamlesh Trivedi  +91-98795-50717
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