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Economy not ready to take fresh start

The economy of Pakistan waded through various ups and downs in the current fiscal year. During the days of Finance Minister Ishaq Dar, the value of the Pakistani rupee remained stable, inflation was contained and over four percent in GGP was recorded. However, power supply could not be improved to the desired level, the volume of imports multiplied and exports visibly declined, creating trade deficit of over $20 billion. The security situation remained a problem area while the tax collection system also could not be improved. The tax to GDP ratio is also the lowest in the region and even in the world and the government failed to enhance tax base. Instead, it imposed a host of indirect taxes and probably Pakistan has become one of the heaviest taxed countries in the world. The political polarization has increased and the elected prime minister packed home during the first half of the fiscal year 2017-18 as well as the finance minister also had to leave the office. All of a sudden change in the political perspective of the country has adversely affected the economic variables. The game of gains achieved and gains lost has kept the country away from achieving a sustainable growth.

As a new finance minister has been installed, the much publicized macroeconomic stability has lost its tempo. The foreign exchange reserves are gradually decreasing and the look of the economy for the next six months is not very much promising. The International Monetary Fund has started pulling the strings and the government had to take various steps to increase revenues, including imposition of a regulatory duty on various imported goods, devaluation of rupee and the petroleum prices have been increased. The government has over all failed to deliver in almost all the sectors. Keeping in view the present state of affairs, the future of economy is not very much unpredictable. Elections are expected to be held in the second half of the current year, but its repercussions will be heard in the next fiscal year after June. The new finance team has been burdened with handling the risks not only on the external front, but also growing internal financial mismanagement. Pakistan is a classic case of misplaced priorities where the official hierarchy lacks abilities and qualifications to repair the damages. It is feared the government will have to seek another loan programme from the IMF and it will plunge the economy into another gorge of misplaced realities. The economy is not ready to take a fresh start.


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