Pakistan: Economic Scenario 2008-2009
By Suhail Akhtar
From the recent past time, until now, Pakistan just like an organization faces many obstacles, whether it is Political, Economical, Social, Technological (PEST) which can further be seen as, poor law and order situation analyzed by witnessing increase in domestic crimes, less or no accountability, high corruption, and the most important factor ‘terrorism’ which has affected the social and economical life of the people and as a result Pakistan lacked behind in technological advancements comparing from other neighboring countries.
Discussing Pakistan current economic status, recently an economic survey of 2008-2009 released in a press-conference showing views of national economy on 11th of June 2009 by Advisor to Prime Minister on Finance, Shaukat Tarin and Minister of State for Finance, Hina Rabbani Khar.
The economic survey presided by Ministry of Finance showed unexpected results demonstrating poor performance as economy only grew by 2 percent in 2008-2009 which was forecasted to increase by 4.5 percent comparing it from last year growth of 4.1 percent.
Although world is facing global recession but that doesn’t mean economy will slowdown in growth by more than a half percent in single year. These unfavorable outcomes shows lack in adopting macro-economic policies by our government under this period of prolong recession.
For viewing Economic Survey 2008-2009 click on this link one can even download and read it in pdf format from here.
Readers can easily perceive that the figures relating to sectors under this survey show unsatisfactory performance. That is:
Tax collection by FBR (Federal Board of Revenue) in this survey display weak results, (Tax collection to Gross Domestic Product ratio has fallen to 9 against budgeted figure of 10) for there is more expenditure made and less taxes paid in this consolidated year of 2008-2009. As the matter of fact government introduced tax schemes like refunding of tax, amnesty scheme, etc. to help more the bribable bureaucrats and illegal property holders and less to the small business entrepreneurs or other middle-class people.
Manufacturing sector produced the output of 3.3 percent in 2008-2009 recorded as weakest in the history, which was expected to grow by 7.5 percent. Under the same situation last year it grew by 4.5 percent, which shows a sense of insecurity in between manufacturing industrialists due to this on going political situation which caused immense disruption, this year. Resultantly, demand for the manufactured goods went down in the international market and accounted short-fall in exports.
Just like aforementioned divisions, every other sector in Pakistan produced worst as its output in this fiscal year of 2008-2009. Growth and Investment, Education, Health and Nutrition, Transport and Communication, Energy sectors all depicted deceleration.
There were also adverse budget variances in Inflation, Capital Markets, Trade Payments, External Debt and Liabilities, Population, Labour Force, and Employment etc. Apparently, Agriculture was the only sector defined which produced a better output in 2008-2009.
As a result of above, Pakistan’s balance of payments came under severe pressure and brought rise in commodity prices as well as to the global financial turmoil. Absence of effective policy response during the political transition to a new government further accentuated the balance of payments difficulties. It is not surprising that Pakistan continued to lose its foreign exchange reserves at a much greater pace and by end-October 2008 they reached a dangerously low level.
Economic survey of 2008-2009 presented on 11th June 2009 showed sheer discouragement to the people of Pakistan. As the matter of fact, Minister of Finance Shaukat Tarin tried to hide his own government’s poor action plans and their self advantageous policies which affected the country at its worst.
On the other hand, IMF report on “Regional Economic Outlook: Middle East and Central Asia”, released on Thursday, showed some good signs of future budget, the report described that inflation rate in 2009-2010 will come down to single digit i.e. below 10.
We all hopefully wish that the upcoming budget of 2009-2010 will be made according to the situation by following macro-economic policies which could encourage, help and support more the poor and middle class people as the present inflation rate is very high, so our policy makers should take stern steps which could bring down the inflation rate, or these united people know well how to show somebody the ropes.
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