The Financial Impact of Political Instability
Pakistan’s current account has suffered losses in the aftermath of the recent political turmoil. Total foreign investment has fallen by 36% in FY 22.
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As the country continues to struggle to meet its foreign payments, many investors, some Pakistani diaspora, have lifted their trust from the government. In the past 6 months, the Naya Pakistan Housing Certificates have seen a mass withdrawal of around USD 600 million. Similarly, remittances have declined by 16% over the last year owing to exchange rate differences (Read more).
The major reason for the withdrawal of certificates is the restrictive monetary policy all over the world in the wake of rising inflation. Therefore, according to liquidity preference, many investors plan on holding cash instead of certificates that don’t offer comparative profits. This is interesting because the government increased the rate of returns for all maturity dates. Another reason for the trend could be changing governments and uncertainty in the region.
Moreover, the Roshan Digital Account has also observed a decline in inflows. The all-purpose solution introduced in 2020 has seen a progressive upwards trend in investment however, the month-wise trend has not been promising.
Surely, the political situation of the country has a huge impact on this form of investment. Therefore, the government has returned to Sukuk bonds and other instruments to raise funds internationally. Moreover, Pakistan’s Minister of Finance for State has assured of the country’s no risk of default. However, without a proper plan, all seems wishful thinking.
INSTAGRAM POST
📢 FACT CHECK: Egyptian news claims about producing FIFA World Cup 2022 balls are FAKE! — www.instagram.com
The football "Al Rihla" has been manufactured in Pakistan. ❌https://egyptian-gazette.com/sports/world-cup-ball-made-in-egypt/ ❌ ⚫ The picture circulating on social media is a machine-stitched ball and not the official football that is a part of the tournament.
⚫ The news that Pakistan has only produced 20% and the rest is made by Egypt is also fabricated. Pakistan is the official manufacturer of FIFA World Cup Qatar 2022 football "Al Rihla".
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