THREE different reports released on Tuesday speak volumes about the state of economy of Pakistan and the need to take urgent measures to rectify the situation.
In its Pakistan Development Update, the World Bank projected rising public debt, increasing poverty and low GDP growth in the range of 1.3% for the current fiscal year and almost similar forecast was made International Monetary Fund (IMF) in its World Economic Outlook 2021 report projecting a subdued economic growth rate of 1.5 per cent for Pakistan, coupled with a higher rate of inflation and rising unemployment.
The third report (UNDP’s Pakistan National Human Development Report 2020) identified massive income inequality among rich and poor.
These reports present a dismal economic picture despite the fact that the present Government took a series of harsh measures during the last two and a half years in a bid to improving things.
The policies that the Government pursued at the instance of the IMF and other donors did no good to the economy but increased the burden on the masses who are groaning under inflation, which the WB projects at ten per cent for the year.
The WB report is an eye-opener as it openly talks about the negative impact of the IMF programme as it would dampen the economic activity.
The so-called fiscal consolidation measures produced no miracle before and they are unlikely to be helpful in future, meaning that the IMF programme served no other purpose than to compound the woes of the people.
How can these policies bear fruit when rupee is devalued to make Pakistani products competitive in the international market but the very products are rendered uncompetitive because of repeated hike in electricity and gas tariff to meet IMF conditionalities? Prime Minister Imran Khan on Tuesday said his government’s “main concern is to lift our people out of poverty” but the challenge is daunting as 5.8 million additional people have fallen into poverty as a result of Covid-19 and the threat is far from over.
New Finance Minister Hammad Azhar too has declared to pursue four per cent GDP growth rate for the next year and it is to be seen what the government has in store to achieve such a formidable target.
