Prachi Kiran Feb 17, 2023
Two of India's neighbors, Pakistan and Sri Lanka, are currently facing significant economic difficulties. Sri Lanka has taken some courageous actions to solve its economic problems, while Pakistan's problems seem to have gotten worse.
Let’s look into the crises in Pakistan:
Pakistan has been forced to raise the price of gasoline by 22.20 rupees ($0.0835) per litre, bringing the price of the fuel to 272 rupees ($1.02). This is because the country's currency has experienced a significant decrease.
The "petrol bomb" price increase went into effect on Wednesday night, only hours after the administration sent the House a tax-heavy "mini-budget."
Between July 2022 and January 2023, annual inflation averaged a record-breaking 25.4%, up from 10.3% between 2021 and 2022. In January, the consumer price index increased by 27.5% year over year, marking the highest level in nearly 50 years.
According to the most recent data, the central bank's foreign exchange reserves have decreased to just $2.9 billion, barely enough to pay imports for fewer than three weeks.
Srilanka is facing difficulties:
After a year of severe load shedding, which saw power outages that lasted longer than 12 hours a day in some areas of the nation.
Sri Lankans will begin to experience uninterrupted power, though there will be a price increase in accordance with the IMF's requirements.
The island nation's persistent financial struggles with fuel imports and search for more affordable deals are believed to have caused some of its power facilities to be severely damaged by the quality of the imported oil, resulting in a crisis.
Sri Lanka, a heavily indebted nation, desperately needs a $2.9 billion tranche, and the administration is pleading with the IMF to grant it to it.
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