Reinvigorating Pakistan's Economic

 

                 

Building a Strong and Sustainable Future Introduction: Welcome to the realm of Pakistan's economic recovery mode! In recent years, Pakistan has been diligently working towards revamping its economic landscape, driven by a vision to achieve sustainable growth, alleviate poverty, and improve its citizens’ overall standard of living.

The economy will have expanded by 0.3% in FY 2023 (July 2022–June 2023), according to a preliminary estimate by the statistical office released on 25 May. Private spending growth will have slowed to 1.7%, while public spending, fixed investment, exports, and imports will have all slumped. According to the Asian Development Outlook (ADO) April 2023, ADB's flagship economic report, Pakistan's gross domestic product (GDP) growth is projected to slow to 0.6% in FY2023 from 6% last fiscal year as the economy struggles to recover.

The World Bank has projected Pakistan's economy to grow by 2% in the next fiscal year, much lower than the 3.5% target set by the National Economic Council (NEC), the country's top economic body, saying the lasting effects of the August 2022 floods, along with policy uncertainty and limited foreign exchange resources.

Pakistan today faces an unprecedented economic crisis, with fast-depleting reserves, declining exports and remittances, surging inflation, rising unemployment, weakening rupee, and decreasing business production threatening the country's financial stability and the well-being of its people. Pakistan's economic crisis has numerous causes. Weak governance and political instability have been significant factors, weakening investor confidence in the country and contributing to corruption and pork-barrel politics that undermine the country's fiscal position.

This blog will explore the measures taken by Pakistan to steer its economy toward a brighter future.

1. Structural Reforms: Pakistan's economic recovery mode is characterized by a series of structural reforms aimed at strengthening the foundations of its economy. From tax reforms and ease of doing business initiatives to energy sector improvements, the government has been proactive in creating an enabling environment for businesses to thrive. These reforms have attracted foreign direct investment and encouraged local entrepreneurs to foster innovation and contribute to the country's economic growth. Pakistan is among the eight fast-growing economies of the world due to structural reforms introduced by the present government, Federal Minister Planning, Development & Reform Ahsan Iqbal stated this while addressing China-Pakistan Economic Corridor (CPEC) Investment Conference, held in the Chinese Capital Beijing.

            

2. Infrastructure Development: Recognizing the critical role of infrastructure in economic development, Pakistan has embarked on an ambitious infrastructure development program. With significant investments in transportation networks, energy projects, and digital infrastructure, the country is enhancing its connectivity, promoting trade, and improving the overall efficiency of its economy. This development spree has created job opportunities, stimulating economic activity, and improved the quality of life for citizens.

             

3. CPEC: The Game Changer: Central to Pakistan's economic recovery mode is the China-Pakistan Economic Corridor (CPEC), often referred to as the game-changer. This monumental project, connecting Gwadar Port to China's northwestern region, has opened up new avenues for investment, trade, and economic cooperation. Through CPEC, Pakistan aims to transform itself into a regional economic hub, attracting industries, creating employment opportunities, and boosting its GDP growth.

4. Human Capital Development: Pakistan recognizes the importance of investing in human capital to sustain long-term economic recovery. Efforts are being made to enhance the quality of education, vocational training, and healthcare services, ensuring that the workforce is equipped with the necessary skills to adapt to the evolving demands of the job market. Moreover, initiatives such as financial inclusion and women empowerment programs aim to unlock the potential of all segments of society, fostering inclusive growth.

 5. Sustainable Development: Pakistan's economic recovery mode also places great emphasis on sustainable development practices. The country is actively pursuing green initiatives, renewable energy projects, and climate change adaptation measures. By aligning economic growth with environmental preservation, Pakistan is striving to build a sustainable future, contributing to global efforts in combating climate change. Conclusion: In conclusion, Pakistan's economic recovery mode is a testament to the country's determination to achieve sustainable growth, improve living standards, and create a brighter future for its citizens. Through structural reforms, infrastructure development, the game-changing CPEC, human capital development, and sustainable practices, Pakistan is successfully navigating its way toward economic prosperity.

Recently the International Monetary Fund and Pakistan have reached a staff-level agreement on a bigger-than-expected $3bn Stand-By Arrangement (SBA), a last-minute rescue package for the country facing an acute balance of payments crisis. As IMF has three critical missions: furthering international monetary cooperation, encouraging the expansion of trade and economic growth, and discouraging policies that would harm prosperity.

           

On Friday, 30^th of June 2023 Pakistan secured initial approval of a $3 billion loan program from the International Monetary Fund to address its short-term acute balance of payments crisis and avoid a potential default. Prime Minister of Pakistan Shahbaz Sharif tweeted that the arrangement will help strengthen Pakistan's foreign exchange reserves, enable the country to achieve economic stability, and put the country on the path of sustainable economic growth, as a result of this stock exchange of  Pakistan recovered by a record-breaking spree of around 2500 points reaching almost 43900 mark,  a rapid decline of more than 15 rupees of dollar Open Market Forex rates and is trading at Rs: 272 in 2 days of trading after Eid Holidays & Pakistan Foreign Bonds value has appreciated substantially, which shows a positive attitude and high confidence level of investor in the stock market, beside that inflation declined by more than 9% in June and it dropped from 38.5% to 29% as reported by National Bureau of Statistics. 

With this good news, I have a firm belief that soon Pakistan’s Economic Revival will start and we will once again be on the path of economic growth as we were in 2017.  Resulting in high GDP and lower inflation rate with a decrease in dollar exchange rates and Consumer Price Index’s basket inflation rate.

Let’s pray for a quick and smooth Economic Revival of Pakistan during 2023-2024.

By: OVAIS ASAD KHAN