It is welcome to note that despite the difficulties faced and uncertainty regarding the future, the the national economy is gradually on the path of recovery. These include deduction in inflation, interest rates and inflation, inflow of remittances from abroad, increase in foreign exchange reserves and exports. And the fact that the stock exchange is constantly setting new records due to these positive indicators, are facts that cannot be denied.

A few days ago, after predicting a continuous decline in inflation for five years in Pakistan, the IMF has predicted the growth rate of Pakistan's economy to be 3.2 percent during the current financial year in its World Economic Outlook released yesterday.  This is short of the government's budget target, but ahead of estimates of 2.8% by the World Bank and the Asian Development Bank, two other major international financial institutions. This pace of economic growth is expected with a single-digit inflation rate of 9.5 percent and a current account deficit of one percent. In the report, the country's growth rate is expected to gradually increase to 4.5 percent and the inflation rate to fall to 6.5 percent by 2029. This is more satisfying that the constitutional amendment will reduce political instability and uncertainty in the country. The road has been paved, after which the series of serious investments will also start from friendly countries and the country will advance rapidly on the path of development. Moreover, the headline CPI inflation has come down to a 34-month low  to around 9.6pc, and hence decreae in prices of essential commodities is expected. It also provides more space to the central bank for further policy rate cut which is on the anvil.

Meanwhile, according to Managing Director of the International Monetary Fund, Pakistan economic performance has also improved, but there are still many important issues to be resolved. Speaking at an event held at the Atlantic Council think tank, Kristalina Georgieva said that Pakistan's economy is performing well and foreign exchange reserves are increasing. Pakistan is determined to continue on the path of improvement and is approaching the International Monetary Fund. It is clear from the opinion expressed by the head of the IMF that positive prospects are emerging in the national economy. This is an event that could hardly have been expected in previous years – the country was on the brink of bankruptcy in the early months of 2021. An agreement was made with the IMF on such strict terms. However, today, the trend of improvement in the national economy is a fact whose concrete evidence is in front of the whole world in the form of economic assessments of prominent institutions like the United Nations, the World Bank, the IMF and the Asian Development Bank.

The Pakistan Stock Exchange is at its highest in the country's history, foreign exchange reserves have increased significantly and dollar volatility has been curbed.  This progress is definitely the result of the strict measures taken during the PDM and then the previous caretaker government which were indispensable to end the continuation of economic decline.  Due to them, the people of the country had to face difficulties, but now the positive results of these decisions have started.  In the annual report of the Asian Development Bank, it is said that the inflation in Pakistan is expected to decrease in the next fiscal year, the inflation rate will reach 15 percent while the growth rate of the next fiscal year is estimated to be 2.8 percent. 

According to the report, if the reforms are implemented in Pakistan, the process of economic recovery will start from this year. It may be recalled here that during the ups and downs of more or less the last two decades, the country's economic situation suddenly worsened in 2019 when the rupee depreciated against the dollar and the export deficit reached 22.35 percent on an annual basis.  In comparison, the value of the rupee began to stabilize and in September 2024, Pakistani exports increased by 13.5% to 2.805 billion dollars for the thirteenth month in a row. In recent days, a 15% increase in textile exports has been seen.  The services sector contributes an average of 25 billion dollars to the national economy in the form of remittances. Though, remittances tend to decrease from 2021 onwards.

However,  this trend has reversed and in recent days, encouraging information has been coming out, according to which in the first two months of this fiscal year, in July and August last year, compared to the same period of 2016, the remittances sent by Pakistanis living abroad have increased by 44%. Pakistan needs 25 billion dollars for the payment of loans and interest in the current financial year. After the approval of the package of 7 billion dollars from the IMF, the way to obtain more loans from other foreign sources has been paved. It has been taking new loans to pay off and now the situation is worse. 

However, what is worrying is the debt burden. The Govt should ensure that the seven billion dollar package of the IMF is the last loan, for which the country will have to increase its resources by the same amount. There is a need to try to achieve the desired goals by taking into consideration the external sector of goods and services on a priority basis along with the increase in the tax net.

In recent months, textile, sugar and IT export have risen. The case that the sugar industry was fighting with the government for the export of surplus sugar produced in the country has finally been settled, which has been given conditional permission to export one and a half lakh metric tons of sugar to foreign countries. Under the agreement between the government and the Pakistan Sugar Mills Association, stock availability and price stability will be ensured. The recent decision to export sugar is good in the sense that it will fetch valuable foreign exchange and will also remove the fear of the mill owners losing their surplus sugar. The decision regarding payments to farmers is also welcome.

Meanwhile, optimism is in air as export sector has started showing signs of improvement and a latest report says that in the new government, Pakistan's exports to Afghanistan registered increase by 20.6% on an annual basis and by 12.5% on a monthly basis. Moreover, there was a huge decrease in imports from the neighborly country by 20.3% on an annual basis. However, our exports have substantially increased by over 20 percent and 12.5 percent on a monthly basis. It may be recalled here that our exports to Afghanistan in February 2024 were reported to have been $104 million and the same  were $97 million in March 2023.