Pakistan is facing a tough time with its money. The head of the central bank, Jameel Ahmad, recently told lawmakers about the problems. He said that prices of things are going up (inflation) and will probably go up even more because of government spending and rising oil prices. To stop prices from going up too much, the central bank is keeping interest rates high. This means it’s harder for people and businesses to borrow money.

While the government has managed to get some money from other countries to pay its debts, the central bank head says the country’s money situation is still fragile. He thinks things will get better, but it will take a long time. The problem is that the government is still spending too much money. If it doesn’t stop spending more than it earns, the problems will only get worse. The country needs to find a way to earn more money and spend less. It’s important to understand that fixing the economy will take time.

There are no quick and easy solutions. The government needs to make tough choices and stick to a plan. People will need to be patient and support the government’s efforts to fix the economy. If the government doesn’t take the right steps now, the situation could get much worse. It’s like trying to fix a car with a flat tire while it’s still moving. It’s dangerous and could lead to a bigger crash. The government needs to focus on growing the economy in a smart way. This means creating jobs, encouraging businesses, and making sure everyone has a chance to succeed. But it’s important to do this without spending more money than the country earns. Optimism regarding the resolution of the foreign debt repayment crisis, concerns remain about the sustainability of this positive outlook.

While recent debt rollovers from countries such as China, Saudi Arabia, and the UAE, as well as the expected approval of a new IMF deal, offer some stability, uncertainties persist.  Projection of inflation to range between 11.5-13.5 percent, with expectations of potential surges in prices due to inflationary budgetary measures and probable increases in global energy prices triggered by the crisis in the Middle East.

He warned that the government’s adoption of expansionary fiscal policies coupled with unresolved foreign loans could lead to higher inflation rates, exerting pressure on the country’s already limited reserves. Therefore, the central bank plans to uphold a cautious monetary policy approach in the foreseeable future. While facing inflation risks, debt repayments, and economic uncertainties, maintaining a prudent monetary policy stance is crucial. Collaborative efforts between the government and financial institutions are imperative to navigate through the challenges and pave the way for a resilient and prosperous economy.

The road ahead may be arduous, but with strategic planning and sound economic management, Pakistan can overcome hurdles and progress towards stability and growth.