The coronavirus pandemic and rising cost of living have pushed nearly 70 million more people in developing Asia into extreme poverty, according to a report from the Asian Development Bank, which highlights the negative impact on poverty reduction efforts in the region.
The article highlights the economic crisis in India in 1991 and draws parallels to the current state of Pakistan's economy, emphasizing the importance of focusing on economic growth and addressing the needs of the deprived sections of society.
Pakistan's economy has experienced a slowdown in its structural transformation, with a significant decrease in the share of agriculture and a lack of growth in the industry sector, indicating a premature de-industrialization contrary to successful developing nations, emphasizing the need for policies to boost industrialization and address taxation inequities.
Millions of Pakistanis are facing the devastating consequences of an unprecedented economic crisis, with rising inflation, soaring fuel and electricity prices, and a weakening currency, leaving low-income households struggling to make ends meet.
Pakistan's central bank is expected to increase interest rates in order to address high inflation and bolster foreign exchange reserves, which have led to a record low value for the rupee. A Reuters poll shows that 15 out of 17 analysts are forecasting a rate hike, with some expecting an increase of at least 150 basis points. The country's economic recovery is being challenged by IMF loan conditions, import restrictions, and subsidies removal, which have caused spikes in energy prices and elevated food inflation.
Despite Pakistan's immense potential in various sectors such as energy and agriculture, the country continues to face economic injustice and elite capture, which undermines social justice and human development, according to economist Dr Hafiz Pasha; in recent months, however, the government has taken action against electricity theft, currency smuggling, and commodity hoarding to combat these issues.
Pakistan's exports saw a significant increase of 22.45% in the first two months of the fiscal year 2023-24, reaching Rs1.27 trillion, while imports decreased by 2.42%.
The worsening economic situation in Pakistan is causing the poor, honest, and innocent people to struggle to survive, leading to dire consequences.
Pakistan is facing a major economic crisis with high inflation, insufficient public resources, and policy decisions influenced by vested interests, according to the World Bank. The country needs to make hard choices and prioritize coordinated, efficient, and adequately financed service delivery to improve human development outcomes. Additionally, the Pakistani Rupee has reached a record low against the US dollar.
Pakistan is facing a deep economic crisis that has negatively impacted living standards, the private sector, and the environment, and the World Bank argues that urgent policy shifts are needed to address low quality basic services, improve fiscal management, create a more dynamic and open economy, and address failures and distortions in the agri-food and energy sectors.
The World Bank warns that Pakistan is facing mounting woes and economic hardships, including inflation, rising electricity prices, severe climate shocks, and a 'silent' human capital crisis, while urging the incoming government to make crucial decisions themselves.
The author argues that there are underlying pressures responsible for an ongoing spiral of devaluation in Pakistan's economy, and these pressures make it difficult to sustain recent gains in the value of the rupee.
Pakistan's inflation rate rose to 31.4% year-on-year in September, and the Ministry of Finance expects inflation to remain high in the coming months, with a predicted range of 29-31%.
Illegal activities such as black market currency trade, gold smuggling, and oil smuggling are costing Pakistan's economy USD 23 billion per year, leading to currency devaluation, inflation, and a loss of government revenue.
Pakistan is expected to receive approximately $3.4 billion out of the $10.9 billion pledged by the international community for flood victims, with a major chunk of the funding going towards commodities financing and an oil facility, leaving a net amount of $3.4 billion for the execution of development projects in the flood-affected areas.
Pakistan's economy is in dire straits, heavily reliant on external assistance and loans, with rising inflation, high poverty rates, and a plummeting Human Development Index, yet the country's military-owned enterprises continue to thrive, maintaining extraordinary financial control and leveraging their autonomy for corruption and lack of accountability.
The World Bank has recommended that Pakistan tax the agricultural and real estate sectors and merge the thresholds for the salaried and non-salaried class in order to generate revenue and reduce fiscal deficits, while protecting the poor.
