Leading Issues in the Economy of Pakistan: Agenda for Reforms commodity prices plunged sharply in the aftermath of COVID-19 and the import cover improved in the presence of a lower level of imports. Table 9.1: Key Indicators of External Vulnerability of Pakistan ($ Billion) Imports Import Current External Total External Reserves% Actual Year FE of Good& Cover Account Debt Financing (-1)/ financing of Reserves Services(months) Deficit Repayment Requirement FR requirement (FR) 2016­16.1 58.6 3.3 -12.3 6.5 18.8 17 2017­9.8 67.9 1.7 -19.2 5.2 18 24.4 66.0 74.1 2018­7.3 62.8 1.4 -13.4 8.6 19 22.0 44.5 98.2 2019­12.1 52.4 2.8 -4.4 11.3 15.7 46.5 84.0 20 2020­17.3 62.7 3.3 -2.8 11.2 14.0 86.4 136.4 21 2021­9.8 84.1 1.4 -17.4 12.1 29.5 58.6 74.6 22 Source: SBP The subsequent jump in international prices due to global shortages arising from the Russia­Ukraine war has led to a jump in imports by over 34 percent in 2021-22. Consequently, the import cover ratio fell to its lowest level of 1.3 months. Currently, it is close to only one month. The magnitude of the second indicator, viz., the level of foreign exchange reserves at the start of the year as a ratio of the external financing requirements during the year, also follows a U-shaped curve. It was at its peak of over 86 percent in 2020-21. It fell to 59 percent in 2021-22. Table 9.2: Trend in External Vulnerability Indicators of Pakistan (%) 2010 2018 2021 2022 • External Debt to Exports 220 315 360 401 • External Debt to GNI 36 28 38 40 • Debt Service to Exports 15 19 34 37 • Short-Term Debt Share 7 8 7 7 • Reserves to External Debt 23 9 15 7 Source: World Bank, International Debt Statistics. The World Bank in its annual publication, International Debt Statistics , has identified five indicators of the level of external vulnerability of a country as shown in Table 9.2. The trend in these indicators for Pakistan from 2010 to 2022 is generally one of a process of deterioration. 96