INTERNATIONAL weekly The Economist has placed Pakistan at the fourth place among 43 countries with seriously high inflation rates. According to the estimates of the Pakistan Bureau of Statistics (PBS), the current inflation rate stands at nine per cent compared to 8.4pc in August. The surging prices of goods, depreciating currency value and bourgeoning current account deficit have disturbed the balance-of-payment situation down to its very core.
The crisis gets worsened when imports supersede the exports and cash outflows ultimately affect the country’s foreign exchange reserves, leading to loans from lenders like the International Monetary Fund (IMF).
As a matter of fact, these crippling indicators affect the lives of ordinary people via sky-rocketing food prices and nose-diving living standards, which together hinder vertical mobility in society owing to the poverty plague. Although Pakistan has managed to achieve a few milestones in the recent past, such as securing the position in top 10 business improvers in the world as per the World Banks’ ranking for ‘Ease of Doing Business’ (EoDB), and showing tremendous progress in tackling the Covid pandemic, the current scenario of financial crisis speaks volumes about inconsistent economic policies.
Besides, the government has projected a gross domestic product (GDP) target of 4.8pc, whereas the Fitch Solutions has estimated lower growth in the days ahead.
To eliminate all the crippling elements within the economy, the country needs well-calibrated and meticulously planned solutions. Achieving sustainable economic growth will remain an elusive dream unless Pakistan increases its exports, creates a business-friendly milieu, concentrates on increasing foreign direct investments (FDIs) and enhances its tax base.
Ruby Nawaz
Gujranwala
Published in Dawn, November 18th, 2021
