Prime Minister Syed Yousuf Raza Gilani has decided to convene a special cabinet meeting to discuss the country's deteriorating economic situation, which will be attended by the parliamentary leaders of all political parties, well-informed sources told Business Recorder.
"The country is facing threats of an economic collapse due to non implementation of economic reforms agreed with the international financial institutions especially with International Monetary Fund (IMF)," the sources added. The government is taking about Rs2 billion loan from the State Bank of Pakistan (SBP) every day to run its affairs. Budget deficit has exceeded Rs500 billion but the government is not taking any remedial measures, they added.
The sources said the impact of recent increase in power tariff determined by Nepra is about Rs3 billion, which implies that the government would be compelled to extend Rs143 billion subsidy to the sector. The government has also withdrawn increase in petroleum products' prices due to political compulsions. The United States and IMF have expressed serious concerns over this poor decision from the perspective of the economy.
"We are going back to 2008 situation when the then government did not pass on the oil and electricity prices to the public due to political reasons," said an analyst. Now the crude oil prices are hovering around 100 dollars per barrel, which implies further burden on the economy.
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