Sluggish economic growth of Pakistan.

According to projections from trustworthy institutions such as the World Bank, Asian Development Bank (ADB), and International Monetary Fund (IMF), Pakistan's economic growth is anticipated to reach 1.7 per cent, 1.9 per cent, and 3.5 per cent, respectively. In the first meeting of the fiscal year 2024, the Monetary Policy Committee (MPC) supplied its projections, stating that the anticipated range for real GDP growth in FY-24 is 2.0 to 3.0 per cent. The significance of economic growth in the development process cannot be overlooked, as it is intricately linked to the overall wellbeing of a nation.

Given the current economic landscape, it becomes increasingly evident that Pakistan's economy faces a pressing need for growth. The crux of the matter lies in the fact that Pakistan's economy requires a minimum 6 per cent growth rate to effectively absorb the inflow of individuals entering the labour market. The growth rate must accelerate further to reduce the exceptionally high unemployment rate. The economic growth rate below the tipping point can be attributed to various internal and external factors.

The economic growth of Pakistan for FY23 remained slow at 0.29 percent. The slow growth is characterised by both domestic and international shocks. The internal shock, amongst others, of the flash floods that engulfed significant agricultural land has caused a domestic supply shock. This unfortunate event has jeopardised fiscal consolidation efforts and the resilience to the ongoing covid-19 crisis.

The forward and backward linkages of the agriculture sector had a significant impact on various commodity sectors. Flood damage has contributed a staggering amount of $14.9 billion, resulting in a significant loss of $15.2 billion in GDP. Additionally, the costs for rehabilitation have reached a substantial sum of $16.3 billion.

The lower confidence of the consumer and business community affects decision-making concerning spending, savings, and investments. Consequently, this contributes to sluggish economic growth and hampers the government's efforts to achieve its tax collection target. Therefore, it is crucial to delineate the essential steps that can be taken to enhance the confidence of both consumers and entrepreneurs.

The international shock, amongst others, of the prolonged Russia-Ukraine conflict has had a more negative effect on global growth and inflation than anticipated. Consequently, elevated global prices worsen currencies...