With Pakistan unwilling to meet IMF conditions and facing a sovereign default if the financing program expires at the end of June, Shehbaz Sharif government is caught between a rock and a hard place, as the Islamic nation has recorded its highest inflation figures since records began in 1957.
Today, Pakistan has surpassed Sri Lanka to have the highest inflationary pressure in Asia, at 38% in May 2023. After Pakistan surpassed Colombo in April 2023, inflation in Sri Lanka fell to 25.2%.
While Pakistan has always boxed far above its weight class, first due to US support in the past century and now due to Chinese support, the inflation rate under the Narendra Modi government is 4.7 percent, the lowest since October 2021, and food inflation is only 3.8 percent. In Pakistan, food inflation is 48.7 percent in May, up from 48.1 percent in April.
The Pakistan government’s negotiations with the IMF have become even more skewed after IMF mission chief Nathan Porter stated publicly that he hoped Pakistan’s current political crisis would be resolved in accordance with the Constitution and the rule of law.
Pakistan Defence Minister Khawaja Asif slammed Porter’s statement, saying it amounted to meddling in Pakistan’s political affairs. Minister Asif objected to Porter commenting on Pakistan’s domestic politics rather than providing the Islamic nation with the much-needed USD 1.1 billion loan.
While the Pakistani leadership believes that mentor China will come to its financial aid if the country’s economic situation deteriorates as a result of no IMF board meeting this month, the crisis in the Islamic nation is far deeper than it appears, with the country polarized by May 9 mayhem and violence by PTI chief Imran Khan Niazi’s supporters.
Because of Niazi’s ongoing attacks on the Pakistan Army establishment, the general public has doubts about Rawalpindi GHQ’s ability to stem the deep rot within, as the Army itself was found divided on May 9, with PTI supporters torching the Jinnah House residence of the powerful Lahore Corps Commander. With Pakistan’s judiciary, political leadership, and army all pulling in different directions, the Islamic country is in disarray.