All Major Economic Indicators Deteriorated In FY22 Due To Political Situation.

ISLAMABAD -- All major economic indicators had deteriorated in previous fiscal year (FY22) mainly due to the political situation in the country.

The main economic indicators including current account deficit, foreign investment, budget deficit, inflation rate, foreign exchange reserves and currency value had worsened in FY22 apparently due to the political situation in the country after and before no confidence move. The data of the ministry of finance depicted bleak picture of the economy. Previous government of PTI and incumbent coalition government are blaming each other for the current economic situation, which is still uncertain.

Pakistan's current account deficit had swelled to mammoth $17.4 billion in FY22 as against only $2.8 billion in FY21. The current account deficit has increased mainly due to massive increase in imports, which had gone to record highest $80.2 billion. Meanwhile, exports were recorded at $32.5 billion and foreign remittances at $31.2 billion in FY22. Massive increase in current account deficit was once of the reasons for tumbling foreign exchange reserves held by State Bank of Pakistan, which had declined to $8.5 billion on July 25 2022 as compared to $17.83 billion in corresponding period of the last year. Meanwhile, there was pressure on the exchange rate, which had depreciated to Rs230 against US dollar on July 25 2022 as against Rs162.33 in the same period of the previous year.

The uncertainty on political as well as economic fronts had also affected the inflow of foreign investment in the country. Total foreign investment had declined by 61 percent to $1.788 billion in FY22 as compared to $4.582 billion in the preceding year. Foreign direct investment (FDI) recorded nominal increase of 2.6 percent and portfolio investment had shown massive decline of 87.9 percent in FY22.

On fiscal side, despite the fact that Federal Board of Revenue (FBR) had achieved the unrealistic tax collection target of Rs6.1 trillion, the budget deficit had swelled to higher side. The FBR...