Pakistan External Pressures Mounting

Pakistan is facing external pressures rising from increasing imports of capital goods as well as investments under the China-Pakistan Economic Corridor, said Moody’s, the international ratings agency, on Friday. Moody’s issued its view on Pakistan’s economy and analyzed that the external pressure has been continually mounting which may further aggravate the issue of declining foreign exchange reserves, APP reported. The record current account deficit of $18 billion in FY18 has eroded foreign exchange reserves of the country hampering its ability to meet external obligations. The newly elected government has shown its willingness to approach International Monetary Fund for a bailout package but at the same time it is also considering other options like borrowing from China and Chinese banks. The country’s imports, which have become a grave concern for the economy, could not be curtailed despite numerous of steps taken by previous government as well as the caretaker government to halt the widening trade deficit. Moody’s said that the imports are higher because of heavy investments related to CPEC.