Government sources reveal that economic crises in Pakistan is touching alarming heights due to which, for the success in general elections of 2018, it has extremely been difficult for the government to keep the prices arrested at reasonable and acceptable limits. The government, in absent of the Finance Minister, is being run by bureaucracy. Circular debts on the country have reached to the maximum. The government of Pakistan, for keeping the financial deficit in control, has requested to Saudi Arabia to supply petrol on credit in reciprocation of 'political support Acute shortage of Furnace Oil has culminated again into load shading on the large scale in the country. Cause of load shading in Punjab is being attached to Smog which has never been the cause of load shading in the past. In September 2017, the volume of circulating debts exceeded to Rs. 800 billion. Recently, petroleum products prices have been raised by 200 percent for raising tax revenue. This price hike has no concern with international oil price oscillations. The financial crises, no doubt, will bring energy and power crises because oil import will be dropped to the minimum due to monetary short fall and load shading will be maximum. Though the financial crises and Smog are being considered as the cause of load shading but this fact is oversight that the power generating plants running on furnace oil have already completed their life years back. These outdated plants drink oil rather to consume. Consequently cost of power generation increases. On the other hand, the government is now not in a position to grant subsidy on electric consumption. This is the reason behind the efforts being made to fill the negative financial gap through rise in tax rates.
During first two months of financial year 2017-18, exports from Pakistan amounted to 3.5 billion dollars while imports reached to 9 billion dollars. Total trade deficit during July-August 2017 was 6 billion dollars; 33 percent higher than that of preceding year. Foreign exchange reserves of Pakistan have dropped below 14 billion dollars. Moreover, remittances sent by Pakistanis working abroad are also being decreased gradually. In combination with all these imbalances, aggregate deficit is increasing due to which current account deficit has reached to 2 billion and 60 million dollars. The current account deficit indicates that Pakistan consumes more and earns less. Consequently, income-consumption negative gap is being bridged up by borrowing. According to a cautious estimate, Pakistan pays annually 6 billion dollars towards repayment of loans for which dollars are needed. Remitted dollars are hardly sufficient for paying against imports and debt services.
Government of Pakistan has been planning for negotiating loans from IMF which, no doubt, will make the ideological base o f the county weaker Annual debt payment is higher than the defense budget of Pakistan. Year 2016 was the record of borrowing from abroad when foreign loans on Pakistan reached to 72.98 billion dollars (7.4 trillion rupees). During 2016, Government of Pakistan borrowed 7.9 billion dollars; more than the previous year. In addition to this, 3.1 million rupees were also borrowed from local commercial banks. If foreign and local loans are added together, apart from loans from China, amount of total borrowing reached to 55 billion dollars during the last 3 years. Economists opine that in case of continuation of current rate of borrowing , it is expected that the foreign loans will exceed to 75.54 billion dollars or 7.9 trillion rupees. On the other hand, Next year we will have to repay the foreign loans to the international financial institutions worth 11.5 billion dollars. According to the experts, repayment of loans with loan strategy of the government of Pakistan, foreign loans may reach to the extent of 79.35 billion dollars or 8.3 trillion rupees and with the beginning of 2020, 87.1 billion dollars or 9.12 trillion rupees.
