Indebted to China, flood-ravaged Pakistan’s finance minister quits while trying to secure bailout terms
- Miftah Ismail’s resignation came after Pakistan received assurances of financial help from the IMF and World Bank to prevent its economy from sinking
- Pakistan is dealing with an enormous debt burden which has been exacerbated by the devastating floods that displaced more than 33 million people
Flood-ravaged Pakistan’s economic spiral continues to worsen, with the man in charge of overseeing the country’s finances abruptly quitting on Sunday.
Karachi-based economist Najam Ali said he expected business activity in Pakistan to “suffer a lot in the current year with major damage to the transport and communication infrastructure.”
Economic activities in the affected areas are likely to remain subdued, Ali said, leading to disruptions in demand and supply for various goods and commodities, which will “eventually result in cost push inflation, particularly in food items”.
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The services sector in general, and retail and trade activities in particular, are also likely to suffer in the near term, said Ali, who is the CEO of Next Capital, a Karachi-based financial services firm.