The Current Economic Condition of Pakistan

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This year was an overall tough year for all over the economy of the world. Similarly, this year was also challenging for Pakistan. Before the start of the lockdown, Pakistan was slowly growing it was expected that the growth of Pakistan, Pakistan’s growth comes down up to -0.4 percent and it was predicted by externals that the growth of Pakistan will be -1.5 but fortunately Pakistan did not go down up to that figure. Because the external sector especially the balance of payment was the big issue of Pakistan, the current account of Pakistan 450 million surpluses in November 2020 and it was a deficit of 300 million in November 2019. So, it is encouraging a positive sign for the growth of the country. Remittances are also contributing to the balance of payment around 2 billion dollars per month is received as remittances from all over the world. But the remittances are remained consistent and did not show growth. The surplus is extremely helpful for the economy of any country the state bank can build the reserves due to the margin received from the surplus. The current growth reserves of Pakistan are around 13 billion dollars. The forward liabilities are only 4.9 billion. A negative thing is seen in reserves is the state bank cannot enhance its assets from the maximum level of 13 billion dollars and the imports are also increased since few months that is also not a good sign, so it required that Pakistan should focus on enhancing the exports otherwise we will face more economic problems. Pakistan has received a good relief from the group of 20 countries they waived-off the interest on the loan up to June 2021 which is also a good opportunity for Pakistan to recover. The total debt of Pakistan is around 35 trillion dollars, which is a very alarming situation. During the last financial year, the inflation was around 10.4 percent it is one of the highest rates in the history of Pakistan. Especially in January 2020, the inflation rate was about 14 percent. The current inflation rate in Pakistan is around 8 percent, so it is a good sign. The unemployment rates are around 9.5 percent. The internal loans given by banks to the corporate sector are 3.5 percent higher in this quarter as compared to the loan given in the previous quarter, furthermore bank has received the requests of loans, so it can be predicted that the employment may be increased because this will be invested in somewhere else which create the employment. The stock market is also showing a positive sign, it seems that the stock market will go upward. Keeping in view the current economic condition of Pakistan. The government of Pakistan should take some measures to control the economy. Two main recommendations are suggested one is that we should increase the tax base, and the second is that the government should also restructure the government companies to avoid providing bailout packages to them on regular basis. 

Special thanks to Sama Money and Unsplash

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3 comments

  1. Very poor analysis. Missing important details and statistics. Doesn't appear as an expert opinion.

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