Economy descending into deeper malaise

ISLAMABAD, : The Pakistan Economy Watch (PEW) on Friday said the economic misgovernance and ongoing political struggle in the country is leading to a deterioration of the vulnerable economy.

If the authorities continued to ignore the economy the country will sink further into the mire of problems as it is struggling to stay afloat, it said.

If the current situation does not improve, it will be impossible for the next government to manage the economy which will add to the misery of the people, said Brig. (retd) Aslam Khan, Chairman PEW.

He said that the trade deficit has increased by 70% to $35.4 billion, the current account deficit has reached $13 billion and the central bank’s reserves are not enough to cover two months of imports.

Aslam Khan said that exports have increased 25 percent but imports have also jumped by 49 percent washing away the benefit of the increased exports.

He said that all the attempts to control twin deficits and the value of the rupee have failed and the central bank, which was given unnecessary powers to reduce inflation, could do nothing about it.

Relations with the US are getting strained but they are still salvageable, the market has crashed; the currency has crashed, the bailout program is paused and the finance ministry is finding it impossible to balance the sudden spending spree causing damage.

Failed negotiations with IMF will again force the country to increasingly rely on Saudi Arabia and other countries for help at a much higher interest rate.

In the current situation, economic recovery and getting cheap foreign loans are nothing but a dream and Pakistan is likely to follow the line of bankruptcy soon.