Current Economic Situation of Pakistan
Current Situation of Pakistan Economy
There are genuine fears prevailing in Pakistan that its economy is in a bad shape. Whereas some expert economists of the country comment that Pakistan’s economy is near collapse, others are of the view that although our economy is still away from the verge of immediate collapse it is so fragile that unless serious and urgent efforts are made to survive the economy, it can move to a dangerous stage within about next six to 12 months.
These views of experts cannot be wished away since weak health of the economy is being mirrored by withering economic indicators, such as low Gross Domestic Product (GDP) due to very low annual growth rate of our economy (2%), rising fiscal deficit (5.8% of total size of economy), inflation (15%), lowest tax to GDP ratio in the world (9%), rise in foreign debts and government’s internal borrowings from the State Bank, rupee losing its value against dollar consistently, government’s failure in collecting taxes and utility bills and increasing poverty (40% people in Pakistan are living under poverty line). With these deteriorating indicators, in fact the economy would have gone down much earlier had the situation not been improved by rising foreign remittances, good agricultural output and favourable balance of payments based on increased exports and reduced requirement of imports. Fears of collapse of Pakistan’s economy notwithstanding, the deteriorating economic indicators suggest that immediate danger to Pakistan’s integrity is not from any other internal or external threat but from impending meltdown of its economy. Because, meltdown of economy causes crumbling of state institutions, breakdown of market mechanism/food shortage and resultant internal law and order situation of immense proportion escalating to civil war which may get beyond control of even state security
There are genuine fears prevailing in Pakistan that its economy is in a bad shape. Whereas some expert economists of the country comment that Pakistan’s economy is near collapse, others are of the view that although our economy is still away from the verge of immediate collapse it is so fragile that unless serious and urgent efforts are made to survive the economy, it can move to a dangerous stage within about next six to 12 months.
These views of experts cannot be wished away since weak health of the economy is being mirrored by withering economic indicators, such as low Gross Domestic Product (GDP) due to very low annual growth rate of our economy (2%), rising fiscal deficit (5.8% of total size of economy), inflation (15%), lowest tax to GDP ratio in the world (9%), rise in foreign debts and government’s internal borrowings from the State Bank, rupee losing its value against dollar consistently, government’s failure in collecting taxes and utility bills and increasing poverty (40% people in Pakistan are living under poverty line). With these deteriorating indicators, in fact the economy would have gone down much earlier had the situation not been improved by rising foreign remittances, good agricultural output and favourable balance of payments based on increased exports and reduced requirement of imports. Fears of collapse of Pakistan’s economy notwithstanding, the deteriorating economic indicators suggest that immediate danger to Pakistan’s integrity is not from any other internal or external threat but from impending meltdown of its economy. Because, meltdown of economy causes crumbling of state institutions, breakdown of market mechanism/food shortage and resultant internal law and order situation of immense proportion escalating to civil war which may get beyond control of even state security