Revealing the dire state of Pakistan’s economy, the country’s Finance Ministry this week forecast that inflation will stay high as it warned that the cash-strapped nation is staring at ‘severe headwinds’ in the current fiscal year, the Dawn newspaper reported.
“For FY23, economic growth is likely to remain below the budgeted target due to devastation caused by floods. This combination of low growth, high inflation and low levels of official foreign exchange reserves are the key challenges for policymakers,” said the alert issued by Pakistan Finance Ministry in its Monthly Economic Update and Outlook.
According to the economic outlook, Pakistan’s overall fiscal deficit stood at 1.5 per cent of GDP during July-October 2022-23 as compared to 0.9 per cent of GDP last year.
The Dawn report said the fiscal deterioration was because of higher expenditure growth on the back of higher markup payments while the government is facing the challenge of providing relief to people in flood-hit areas.
“Standing water due to recent floods may create problems in achieving the assigned wheat sowing target, however, the federal and provincial governments are working hard and committed to enhance wheat productivity,” the economic update said.
Secondly, the impact of floods-induced destruction of agricultural output may start finding its way into the industrial sectors.
As the country is on the brink of economic collapse, Global Start View in its report said “Pakistan has also been facing tumultuous political shifts in power in a desperate attempt to save the rapidly sinking ship”. Experts say the Pakistani economy has been “teetering on the edge of ruin for years now”.
In its piece published on December 29, the Global Start View referred to a recent report by the UN’s climate summit that exposed how the threat of worsening climate change will affect Pakistan.
The UN report states that “environmental degradation is unavoidable until concrete steps are taken to foster sustainable development measures in the country.” Hitherto, Pakistan has often needed help with the balance of payments regarding imported fossil fuels.
“Suppose the government was to invest in its renewable resources to produce power for its industrial and household sectors self-sufficiently. In that case, the over-dependence of the country on foreign aid as well as external debt could reduce significantly in the long run,” the Global Start View argued. (ANI)
This report is filed by ANI news service. TheNewsMill holds no responsibility for this content.