Pakistan's economy in 'collapse' as IMF visits - RFI English

Islamabad (AFP) – Pakistan is gripped by a major economic crisis, with the rupee plummeting, inflation soaring and energy in short supply as IMF officials visit to discuss a vital cash injection.
Prime Minister Shehbaz Sharif for months held out against the tax rises and subsidy slashing demanded by the International Monetary Fund, fearful of backlash ahead of elections due in October.
But in recent days, with the prospect of national bankruptcy looming and no friendly countries willing to offer less painful bailouts, Islamabad has started to bow to pressure.
The government loosened controls on the rupee to rein in a rampant black market in US dollars, a step that caused the currency to plunge to a record low. Artificially cheap petrol prices have also been hiked.
"We're at the end of the road. The government has to make the political case to the public for meeting these (IMF) demands," former World Bank economist Abid Hasan told AFP.
"If they don't, the country will certainly default and we'll end up like Sri Lanka, which will be even worse."
Sri Lanka defaulted on its debt last year and endured months of food and fuel shortages that sparked protests, ultimately forcing the country's leader to flee overseas and resign.
In Pakistan, time is of the essence, with Nasir Iqbal from the Pakistan Institute of Development Economics warning the economy had already "virtually collapsed" due to mismanagement and political turmoil.
Cost-of-living crisis
The IMF delegation will arrive...

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