It is welcome to note that the government has started setting its own house right.  Yes, the government, while formally launching the austerity drive, has first banned ministers, parliamentarians and government officials from spending foreign trips and staying in five-star hotels with government funds.

Teleconferencing will be preferred. Speaker National Assembly has returned 6 security vehicles and 40 employees for saving.  Earlier, the teaching of frugality in the perks and facilities of ministers, advisors, government officers and other high officials has been taught, but it has rarely been implemented.

It is said that the annual expenses of the offices of the President, Prime Minister House, Governors, Provincial Chief Ministers in Pakistan are more than the education and health budget of the country. The number of vehicles is in lakhs and billions of rupees are spent on maintenance and annual petrol which is unprecedented in the world.  Billions of rupees are wasted from the national exchequer on foreign trips. The release of a new travel policy for federal ministers and government officials under the austerity drive is a major development under which foreign visits and travel facilities of ministers and officials have been restricted. President, Chief Justice, Prime Minister, Senate Chairman, Speaker Business Class and officers attached to federal institutions will be authorized to travel in Economy Class.  PIA flight will be first priority. Due to the absence of an unavoidable situation, it has been made mandatory to take the permission of the austerity committee to travel abroad.  Efforts will be made as far as possible to have embassy officials attend conferences abroad. These measures will surely reduce the burden on the economy. Meanwhile, the State Bank's Monetary Policy Committee has maintained the interest rate at 22 percent this time as well. On the one hand, it was announced that the inflation has clearly started to decrease, on the other hand, it was admitted that despite the above situation, the level of inflation is high. Various explanations are given by different circles but the common man does not understand that when he is getting vegetables, pulses and essential commodities at high prices and the situation of food, electricity, gas and other expenses of small and medium households, how can the situation be considered better if it has become unbearable?

The economy is such a blur that nothing is clear, seemingly things are different but something else is in terms of effectiveness. Some results may take some time, but currently nonthing can be said for sure.

However, economists say that inflation and inflation have improved over the past few years. The result of further stability in the situation will be seen in the form of reduction in interest rates which will mean that the elements engaged in industry, agriculture and other economic activities will get loans at lower rates and the wheel of the economy will run faster.

The State Bank's report includes an announcement to continue the current tight monetary policy given the risks to energy prices. The summary of the report is that the external current account balance is proving better than expected.

Real GDP growth will remain in the range of 2-3%. It also said that recovery in large-scale manufacturing is expected in the coming months, but some risks call for a cautious approach.

Expectations of bringing inflation down to 5-7 percent by September 2025 are encouraging. For this, the current monetary policy stance needs to be maintained.

The common man is anxiously waiting for the time when he will get essential goods at cheaper prices and his household budget will be under control.

On the other hand, the increase in the production of major industries for the third consecutive month is certainly a welcome development in the current difficult economic conditions. According to Pakistan Bureau of Statistics, the production of major industries increased by 1.84 percent on annual basis in January and 0.03 percent on monthly basis.

In December 2023, the production of major industries increased by 3.43 percent and in November 1.59 percent.

Major contributors to this growth are beverages, apparel, leather products, electrical appliances, pharmaceuticals and chemicals.  The removal of barriers to imports, clearance of pending letters of credit and increase in foreign exchange reserves with the State Bank led to an increase in economic activity as a result of improved supply of dollars. For this, we have to use all our resources.

Mainly the sources that our economy depends on include industry and especially big industry, agriculture, domestic revenues and remittances from abroad.  Unfortunately, due to lack of attention, now we have to import agricultural products.  Meanwhile, in order to avoid trade deficit and gain foreign exchange, we need to pay full attention to the industry, especially the export industry.

It is not hidden from anyone, thank God that the country was saved from the danger of bankruptcy, but in order to keep the economy going, we need financial support from the IMF. However, every effort should now be made to make the sources of the economy strong and productive with the loans we take so that we get sustainable economic prosperity.

We need both short term and long-term policies to fix the ailing economy. Moreover, consistency in policies should be the top priority of those at the helm of economic affairs of the country.

It is also a matter of rejoice that a staff level agreement has reportedly reached between Pakistan and the International Monetary Fund (IMF).

As per the media reports, the much-needed agreement between Pakistan and the IMF will now be approved by the Executive Board.  Under this new accord, the country will be able to get the last installment of 1.1 billion dollars under the standby arrangement and with the realisation of this agreement, the economy will definitely improve. In the declaration, IMF has praised Pakistan's economic initiatives. The IMF statement said that Pakistan's economic and financial situation improved in the months since the first review, with continued growth and restoration of confidence on the back of sound policy management.

Published in The Daily National Courier, March, 21 2024

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