The US Agency for International Development (USAID) has granted Pakistan $445.6 million over a five-year period through a development objectives assistance agreement. The development comes at a time when Pakistan is struggling to shore up its forex reserves to pay its external debts. The cash-strapped country is hoping to get $1.1 billion from the International Monetary Fund (IMF) as part of a bailout package signed in 2019.
Pakistan plunged into crisis last year after its forex reserves dropped to historic low and inflation shot up. Last month, the country recorded the highest inflation in Asia, surpassing Sri Lanka.
The World Bank has projected Pakistan's economy to grow by 2 per cent in the next fiscal year, much lower than the 3.5 per cent target set by the country's top economic body. The global lender said that the lasting effects of the floods, policy uncertainty, and limited foreign exchange resources have depressed activity in the country, with industrial production contracting by about 25 per cent in the year to March 2023.
In its latest Global Economic Prospects report, the World Bank said the continuing effect of last year's floods in Pakistan, compounded by worsening social tensions, high inflation, and policy uncertainty, is estimated to have limited growth to 0.4 per cent this fiscal year, a 1.6 percentage-point downward revision from January.
"With dwindling foreign exchange reserves and stagnant remittances, the government has increased exchange rate flexibility, allowing the Pakistani rupee to depreciate by 20 per cent since the start of the year," the report said. "Consequently, headline consumer price inflation has risen sharply, reaching 38 per cent in the year to May, its highest level since records began in the late 1970s."
Meanwhile, Pakistan has leased out its iconic Roosevelt Hotel in New York to the New York City Administration for three years, in a deal that will enable the country to earn up to USD 220 million. The Roosevelt Hotel, named after former US President Theodore Roosevelt, has been a prominent landmark in Manhattan, New York since 1924.
State-owned Pakistan International Airlines (PIA) leased this prime property in 1979 and eventually purchased it two decades later. Under the contract, the New York City administration will operate for three years, providing residential facilities to migrants. "The lease agreement is expected to generate revenues to the tune of around USD 220 million for the Pakistan government," Minister of Railways and Aviation Khawaja Saad Rafique announced during a press conference on Monday.
"A contract was signed for 1,250 rooms. The hotel will be returned to the government of Pakistan once the three-year term lease expires," he was quoted as saying by Geo TV.
(With inputs from agencies)