In the coming time, as per the International Monetary Fund (IMF), the global economic growth rate will witness a fall to 3.2 per cent, which means the economy of every country will be uncertain and will suffer to a great extent. Pakistan, which is already in economic trouble, may not bear the brunt of the international economic turmoil. In this regard, the State Bank of Pakistan and economic policymakers must do their homework. The central bank has estimated the GDP growth in the country at three to four per cent, and an international nosedive may prove harmful to the local economy. The IMF prediction is also bad news for the target of a five percent growth rate set by the present government in the budget. Pakistan’s economy is currently facing many challenges, such as increasing trade deficit, increasing import bills, increasing foreign debt payments and political uncertainty touching dangerous levels. The government is working day and night to arrange money to import three million tonnes of wheat, while more loans will have to be arranged for debt service. A widening current account deficit has worsened the foreign exchange reserves.
The government has taken drastic measures to manage the situation but the situation is not yet under control. It seems the country is under inflationary pressure due to an increase in energy and food prices, tariffs for the power and oil sectors and withdrawal of subsidies. The value of the rupee in Pakistan is continuously falling, while the stock market is volatile. Foreign exchange reserves have decreased. The IMF’s advice that policymakers give priority to controlling inflation in such a situation must be taken seriously. The government should be on alert and suggest such measures which do not reduce the rate of growth and benefit the common man who is falling into poverty.