Pakistan senior minister Ahsan Iqbal’s plea to Pakistanis advising them to consume less tea to keep the country’s economy afloat is now viral but also displays the challenges the leadership faces. The senior minister said that sipping fewer cups of tea would help reduce Pakistan’s high import bills – a claim for which the minister has faced ridicule on social media.
But the statement sheds light on Pakistan’s forex reserves – which is enough for less than two months of all imports. The nation is also the world’s largest importer of tea, buying more than $600 million worth of tea. “I appeal to the nation to cut down the consumption of tea by one to two cups because we import tea on loan,” Mr Iqbal said, according to Pakistani news agencies.
Pakistani citizens doubt if at all such measures will ease the financial problems it faces. Among other measures, business traders were also asked to shut down their shops within 8:30pm to save power. Pakistan’s foreign currency reserves continue to fall rapidly – pressuring the government to cut high import costs and keep funds in the country.
Pakistan is also facing 12-hour blackouts as it struggles to acquire LNG from spot markets due to lack of forex reserves. The nation’s foreign exchange reserves plummeted from around $16bn in February to less than $10bn in the first week of June, leaving it with only some funds which can cover the cost of two months of all its imports.
After the Shehbaz Sharif government came to power, officials in Karachi imposed restrictions on imports of dozens of non-essential luxury items in an attempt to save funds.
The economic crisis is turning out to be a major test for the government which is also facing challenges from the ousted former prime minister Imran Khan. The Sharif government accuses Imran Khan’s outgoing government of mismanaging the economy and acknowledging that putting it back on track would be a huge challenge.
Pakistan unveiled a fresh $47bn budget hoping to convince the International Monetary Fund (IMF) to restart a stalled $6bn bailout programme. The bailout negotiated in 2019 to ease an economic crisis was paused after the lenders raised concerns regarding the nation’s finances.
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