Balance-of-Payments Crisis

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Balance-of-Payments Crisis

A situation in which a sovereign entity has developed an unsustainable balance of payments deficit. That is, a balance of payments crisis occurs when so much money is flowing outside a country that it has difficulty borrowing to make up the difference. A balance of payments crisis becomes acute in circumstances like an exceptionally large budget deficit that lasts for an extended period of time or a default on interest payments on publicly-held debt. See also: 1998 Russian Financial Crisis.
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However, he said that during the period of adjustment when they were getting out of a balance of payments crisis, the fiscal deficit was not the primary factor to look at.
However, he added that during the period of adjustment when they (government) were getting out of a balance of payments crisis, the fiscal deficit was not the primary factor to look at.
High upfront tariff and capital costs have resulted in the high price of electricity and loss of competitiveness of Pakistani Exports and Industry leading to a massive Balance of Payments crisis.
The reduction in the defence budget comes at a time when Pakistan is going through a severe balance of payments crisis and has obtained another International Monetary Fund (IMF) bailout programme to shore up the depleted foreign exchange reserves.
Today, Pakistan is in the midst of a balance of payments crisis with increasingly limited and difficult options.
Islamabad -- The Islamabad Chamber of Commerce and Industry has called upon the government to closely work with private sector for exports diversification and product sophistication as lack of export diversification has remained a major hurdle to improving economic growth and coping with balance of payments crisis in Pakistan.
They ask whether Pakistan will be able to break out of this cycle of balance of payments crisis if it changed the nature of goods it exported.
The government, in order to avoid a balance of payments crisis, has borrowed funds from bilateral sources in the last eight months including 15bn Yuan ($2.2bn) from China last month to strengthen foreign exchange reserves.
Launching a medium-term framework 'A Roadmap for Stability, Growth and Productive Employment' here at the BISP headquarters, the minister said, 'More importantly, this sustainable growth would not be achieved by increasing the fiscal deficit, nor by creating balance of payments crisis, but would be on sustainable grounds after resolving all the fundamental issues of the economy.'
ISLAMABAD -- Pakistan's balance of payments crisis would still persist despite receiving loans from friendly countries owing to massive repayment of $4.09 billion in next three months as principal and mark-up on foreign loans and international bonds.
The Crown Prince's visit is seen as sealing deepening ties between the two nations at a time when Mr Khan's government faces a painful balance of payments crisis.
He said that the balance of payments crisis "was not over" yet - a stance that was different from an earlier statement by the Finance Minister Asad Umar.

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