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Pakistan on the verge of bankruptcy

October 20, 2008

Pakistan's woes seem to have no end. After years of terrorism and bad governance spread havoc, the country is witnessing one of the most depressing economic crisis of all times. The global meltdown is now taking a heavy toll on the economy as it faces bankruptcy.

Today, the country's creditworthiness rating is the second-worst among nations ranked by Standard and Poor's. The Karachi Stock exchange has lost more than half its value in the last 6 months, eroding the wealth of many investors. Investors are a worried lot, as most of them have seen their profits wiped off completely in months.

The crisis in Pakistan worsensed this year as the country could no longer bear the huge burden of subsidies. Under former president Musharraf's regime, fuel and food prices were subsidised when international commodity prices rose last year. This eroded the government's coffers. This year also saw the assassination of the country former prime minister Benazir Bhutto leading to more internal strife and unabated terrorist attacks.

The instability and insecurity in Pakistan has stalled many foreign investments. The Asian Development Bank had projected a 6.5 per cent GDP growth for 2008 in its report published in December 2007. But the forecasts have gone awry.

Text:PTI & Agencies

Image: A Pakistani trader speaks on his mobile phone as he monitors shares' movements at the Karachi Stock Exchange.| Photograph: Rizwan Tabassum/AFP/Getty Images

Also read: Pakistan sees the worst economic crisis

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