The state of the country’s economy is no secret. The country is going through a major emergency and the first priority right now is to revive the economy. Before the bailout package agreement, the IMF not only made Pakistan accept its unfair terms but also forced it to implement them.

Confirmation of an additional $1 billion from the United Arab Emirates is still a hurdle in the way of a staff-level agreement with the IMF. The staff level agreement with Pakistan will be finalized shortly after which the board will approve the 9th revision.

A delegation led by IMF Director for the Middle East and Asia, Jihad Azour, held a video link meeting with Finance Minister Ishaq Dar, along with senior officials, while discussing the progress and pre-conditions in the recovery of the loan program.  Along with this, reforms in various sectors will continue and the IMF program will be completed on time.

Finance Minister Ishaq Dar said that all the preliminary steps regarding the ninth review under the Extended Facility Fund have been completed and are committed to pay the obligations.  The severe economic crisis that Pakistan is facing today has its roots largely in our past. The former PTI government changed four finance ministers in four years, but the condition of the people did not change.

The economic crisis is still hanging over our heads. The government will be able to maintain its good image only by getting relief for the people as much as possible from the IMF.

The big challenges we are facing at the moment is the PTI’s leadership ‘damn care’ attitude towards the economic turmoil. PTI leadership is only focused on getting power.

The egos of PTI political leadership are also so big that they are not ready to sit with the ruling parties. In this backdrop, no one knows how long we will continue to depend on foreign loans. According to the assessment issued by the IMF for the Pakistani nation suffering from severe economic problems, despite the fact that there is no possibility of recovery in the current financial year, the expectation of improvement in the situation from the next financial year is certainly very encouraging.

The World Financial Institution, while reviewing the estimates related to the Pakistani economy during the current fiscal year, has said that although the growth rate in the country is likely to decrease from two percent to half a percent, but the next fiscal year will increase to three and a half percent of this rate. Expected to happen. The report states that the inflation rate will decrease to 21.9 percent in the next financial year, while the unemployment rate is likely to decrease from 7 percent to 6.8 percent.

It should be noted that the government of Pakistan had planned to keep the economic growth rate up to 5 percent on the occasion of the budget for the current financial year and it was estimated to remain up to 2 percent after the flood disaster, but other than the IMF.

The international organizations are also now predicting this rate to be more or less half percent. The main reason for the recovery of the national economy in the current financial year is the continuous delay in the agreement with the IMF along with the last summer’s biblical floods. Our own mistakes are also involved in this. If this agreement was done on time, the ways of financial cooperation from other sources would have been opened and as a result of this, the situation would have definitely improved significantly today. In any case, now all possible measures should be taken to make full use of the possibilities of recovery of the economy, in which the elimination of political uncertainty and agreement on the economy are the most important.

The national economy should be pulled out of the vortex in the shortest possible time by the political leadership and the state institutions making positive progress in this direction without delay.

On the other hand, the industrial sector of Pakistan is in constant decline and hundreds of industrial units, which include large, small and medium industries, are shutting down, increasing unemployment and poverty in the country.

Due to decrease in exports, the value of rupee is continuously falling due to decrease in foreign exchange reserves, due to which our competitiveness in the global market is adversely affected due to record increase in cost of production, which can be seen from decrease in production and export of textiles and other products.

Due to the decline in the production of large-scale industries, the private sector loans of banks have decreased by a record 74%, which decreased from 1036 billion rupees in the first 9 months of last year to 266 billion rupees in the current financial year. Big industries have declined by 15% compared to last year for the seventh consecutive month and by 10% this year due to end of subsidized gas and electricity subsidies to textile and export industries, difficulties in opening import LCs for raw materials, the supply chain impact, 58.5% rise in dollar value in last one year, from Rs 181 on April 12, 2022 to a peak of Rs 288 on April 4, 2023, import costs and bank interest rates from 23 to 24 percent. The unsustainable increase in financial cost is the reason that has broken the back of Pakistan’s industrial sector.

According to the Bureau of Statistics, in January this year, the production of 19 sectors of the country’s major industries has decreased, including 14 in the textile industry. 2 percent, 18 percent in yarn and textile industry, 7 percent in auto sector, 9 percent in steel production, 8 percent in chemical products, 24 percent in pharmaceuticals and 8 percent in rubber products and the declining trend in the production of industries in the current fiscal.

 And last but not the least, the textile industry is working at barely 50% production capacity, which is expected to reduce the textile exports of one billion dollars every month.

Published in The Daily National Courier, April, 15 2023

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