Byline: Arooj Asghar
Prime Minister of Pakistan has recently claimed that economy is back on track and now stabilized, rupee is gaining without any support, main indicators are positive, current account deficit is in control and foreign reserves are increasing. On the other hand, Federal Board of Revenue (FBR) is saying that it has collected 17 percent more tax as compared to last year though FBR is considering to revise downward its annual target of PKR 5.5 trillion for the fiscal year 2019-20. Based on fresh numbers released by the government, it seems that there is an increase in exports and reduction in imports yet a lot of work is required. Macroeconomic indicators are presently good but exports are not increasing proportionately, which is a not a sign of relief.
Imports in current fiscal year have dropped by 23 percent, exports have marginally increased whereas government has done some good work in controlling the current account deficit which was not possible without taking some harsh measures.
Due to those measures, people have paid a heavy price. Government officials claims that they had to take some measures to bring back the economy on track, but they don't elaborate what measures they took in this regard. Here are few of the harsh steps taken by the federal government in recent months, devaluation of Pak Rupee by 35 percent, which is somewhat stable now, interest rates are doubled now since the level of 2017-18, additional taxes of around Rs. 700 billion have been imposed, petrol and electricity prices are regularly being increased.
Cumulative impact of these measures have brought down the imports and has improved the current account deficit. Without these measures, present day economic stability (in the words of government) would not have possible. Now, its anyone's guess, if a struggling economy can sustain such shocks and its impact on the commoner in this situation. Independent economists say that real economy at the ground level has affected badly, industrial production has dropped by nearly 6 percent, textile inputs have also reduced by almost 23 percent, cotton crop has dropped by approximately 30 percent that is somewhat attributed to high prices of fertilizer.
Government claims that economy has achieved a level where it is being on the path of stabilization and focus will be on the growth and development in the coming months. There is no doubt that stability has been achieved at a macro level but it has not yet been...