Pakistan’s current economic struggles exemplify the little fires everywhere set alight across the global economy by a war during a pandemic. Like others in countries dependent on imported commodities — for example Ghana and Sri Lanka — Pakistanis are seeing food and fuel prices soar. Foreign exchange reserves – used to pay for imports such as food and fuel – have shrunk.
Pakistan is using up its foreign exchange reserves more quickly than previously anticipated because prices of foreign goods are going up. If the situation doesn’t change, the country faces bankruptcy.
In April, a litre of petrol cost about 150 rupees (£0.60), but by July 1 the price had risen to nearly 250 rupees. And the price of cooking oil increased by 40% just between May and June. At present the country has only enough foreign currency to pay for five weeks of imports. Pakistan is heavily dependent on imported fuel and cooking oil, but also on machinery and food grains from overseas.
