ECONOMIC CONDITION OF PAKISTAN

Economic Condition Of Pakistan

Pakistan is facing an economic backlash nowadays. Political instability and currency devaluation have posed worrying signs for the South-Asian country. Moreover, economic experts of this densely populated nation fear the advancement of their country towards bankruptcy. Foreign exchange reserves are depleting, inflation is at an all-time high, and the Pakistani rupee has shown a massive drop in the past couple of months. 

OVERVIEW

In April 2022, a non-confidence motion against the then prime minister Imran Khan succeeded in ousting the government. Those two months of political instability hurt the economy, and the repercussions continue. The new finance ministry of Pakistan is demanding an immediate financial emergency, and the country has banned the imports of luxury goods immediately. Moreover, analysts have recommended withdrawing subsidies and tax reliefs and imposing high taxes on property holdings. Furthermore, special taxes on high-end vehicles and properties are among the recommendations. Lastly, the delayed IMF bailout package and lack of help from friendly countries have worsened the economic conditions of Pakistan.

WORSENING CONDITIONS

The Pakistani rupee has plummeted against the US dollar to an all-time low. The price of 1 USD has crossed more than 200 PKR in financial markets. Moreover, the Pakistan Stock Exchange is suffering a huge downfall. All in all, investors in Pakistan are living a nightmare. Former Prime Minister Imran Khan is pulling masses against the newly formed unity government each day in different cities of Pakistan. He claims the new government is ‘imported,’ created through a foreign conspiracy involving the US. Moreover, his anti-American stance has won him popular backing all over the country. The hatred for the Pakistan army is on the rise in the country, as a common belief blames the Chief Of Army Staff for ousting the sitting government.  

BLAME GAME

Meanwhile, the new government is reluctant to remove the fuel subsidies despite recommendations from experts and analysts. Current Prime Minister Shahbaz Sharif blames Pakistan’s economy’s sinking baggage on the former government. His desire to win local support by not removing subsidies hurts the Pakistani Economy every passing day. Foreign reserves are depleting, and the Trade deficit has increased. Most importantly, food inflation is constantly rising, and the new government has no answers instead of putting all of it on the previous government. Mr. Shahbaz belongs to the political party PMLN, whose leaders have a history of corruption.

SOLUTION

Former PM Imran Khan has demanded direct elections and aims to win the government by a simple majority. Hopefully, new elections would bring stability to the country’s politics, and the PSX would start showing positive results. However, with current policies and incompetence, Pakistan is on the verge of going into default very soon.

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