(January 28-2023)Former Vice President of FPCCI Atif Ikram Sheikh on Saturday said exchange rate erosion will open floodgates for unprecedented inflation and add to the debt of the country.
The rupee depreciated by Rs34 against the dollar which shattered the tall claims of some officials while the depreciation can increase the country’s debt by six trillion rupees in a few days, he said.
Atif Ikram Sheikh who has also served as Chairman PVMA said that the dollar was trading at Rs264 in the last session while it may depreciate further bringing more inflation in the country.
In just two days Pakistan’s loans have inflated by Rs4.5 trillion while the incumbent government has increased the loans by over Rs11 trillion while the foreign exchange reserves have fallen below $4 billion which includes the dollars given by Saudi Arabia, UAE and China.
The business leader said that the reluctance of the IMF at this critical juncture is due to a host of issues including a reduction in the fiscal deficit.
Our fiscal deficit is at Rs3.2 trillion while the government has to levy more taxes on petrol, diesel, and other items, to raise two to three hundred billion rupees which will put more financial burden on the people,” he added.
The circular debt was increasing by Rs123 billion per month and touching Rs 3.2 trillion and Pakistan was far from meeting the target relating to circular debt.
Government has to enhance the prices of electricity and gas to fill the shortfall which can push up the electricity tariff to Rs50 per unit.
All these steps will put pressure on the masses and increase the cost of doing business; many businesses will be closed resulting in massive unemployment.
He said that the economic meltdown was caused by political turmoil and right now Pakistan was facing a critical situation calling for urgent steps.
