Pakistan under economic hot waters
Pakistan has been facing economic crises for a long time now. Receiving multiple aids and doing collaborative projects is what is keeping us on a safer side. Be it low export rate, higher inflation rate, an increasing fiscal deficit or even current amount deficit are the problems that keep hovering and effecting our economic situation.
As with these issues, Pakistan had no other option than getting some aid from the International Monetary Fund (IMF). This will be Pakistan 22nd loan from IMF. As our economy grows weak, the price of Rupees falls further down and we see a booming hike in the dollar price.
This means our exports will be delivered in cheaper rates and the imports will be of higher rates increasing the amount of deficit. Now people who would be receiving remittances from abroad will be getting some extra amount and those who are paying abroad will be giving loads of extra cash.
The increased inflation rate is the result of increased prices of imported goods. However, in Pakistan’s scenario, multiple factors play an important role. Seeing the declining situation of Pakistani Rupees people started hoarding dollars which further devalued the Pakistani currency.
This was the time when we saw the highest dollar price in the history of Pakistan. The dollar skyrocketed to a booming 159 rupees. This effected the sales, transaction and overall the economic conditions of the country.
Apart from this, investigations also revealed that a huge part of previously taken loans went into the pockets of the government at that time. Corruption is also one of the biggest reason of the downfall of our economy. Also, currency manipulators play a large role in devaluing a country currency.
For persistent economic growth, macroeconomics is very important. This is also one factor contributing in the downfall of our economy. Because of such a dwindling nature of our economy, almost all the set goals for the year 2018 were missed.
To keep stability in the state and to present the country from going default, the government asked for help from the neighbouring countries and the citizens residing abroad. With the help of our friend countries, Pakistan gathered around revenue of up to $9.2 billion from which timely repayments of previous loans and bills were paid.
The government had to make some really tough decisions and one of those decisions involved taking a loan from the IMF. The opposition strongly opposed and criticized this decision of the government irrespective of the fact that they too took heavy loans in their tenures.
After the implementation of the new budget, the economy has seen a minute improvement in the economic conditions while bringing down the dollar price. More emphasis has been put on collecting tax and policies are now implemented to make sure all the tax payers effectively pay their tax. They have given prime importance to taxations and reforms and set a target of collecting 5.5 trillion rupees in terms of generating revenue. Complete documentation of every business is a must now. People are being encouraged to declare all their assets and properties.
Although initially the inflammation rate my increase but with the new reforms, surely the economy will take a stable status in a longer run. In the new budget, the government has set a substantial amount for the revival of agricultural and large scale manufacturing sector. With new housing schemes being inaugurated and more relief packages set for the people, the economy will surely get better in the coming years.