Pakistan heading towards economic meltdown

With over 9,000 containers still stuck at seaports threatening to break the supply chains of essential goods, concerns have reached their peak that Pakistan is fast heading towards economic meltdown and hyperinflation, according to media reports. Experts have sounded alarm bells that the country is facing a deepening financial crisis with fears it could go bankrupt as inflation rises to record levels, food prices soar and its coffers run dry, The Express Tribune reported. The mushrooming crisis will soon tip over into an ugly catastrophe striking households, offices and hospitals. On one hand, importers are unable to get over 8,531 containers cleared due to shortage of dollars. The shipping companies, on the other hand, are now threatening to suspend Pakistan’s operations over the country’s failure to make timely payments, The Express Tribune reported. This will hurt both imports and exports. There cannot be a worse situation than this as the central bank has a paltry $4.4 billion in reserves – barely enough for three weeks of imports – while the estimated need to clear the containers and pending requests for opening more letters of credit stand in the range of $1.5 billion to $2 billion, according to people in the industry and government sources, the report said. In addition to that, the government has stopped over $2 billion in payments of dividends, which will hurt future investment prospects. The import-dependent businesses are now teetering towards closure, which would trigger a breakdown of supply chains, as the country’s domestically manufactured goods are also based on imported raw materials. Goods such as wheat, fertiliser, cotton, pulses, onion, tomato, tyre, newspaper prints and electric bulb are all imported, The Express Tribune reported. “At least tell the banks to open the letters of credit for wheat and pulses so that people have something to eat,” a businessman pleaded to Jameel Ahmad, the Governor of State Bank of Pakistan, on his visit to a bu