Finance Adviser Hafeez Shaikh has admitted that the government is not trying to paint a rosy picture of the economy and there are still challenges to tackle particularly in terms of reducing prices and meeting people’s expectations of providing more jobs and achieving higher growth rate.
The de-facto finance minister has said that macroeconomic stability has been restored in the country as there is a current account surplus for the first time in many years, as well as a booming stock market. The exchange rate has stabilised and there is renewed interest from the international community in the Pakistani market. These are seen as signs that the economy is recovering in recent months.
There is no denying that the government has done a lot to try and restore macroeconomic stability due to the difficult economic situation that it had inherited. The government was forced to make difficult economic decisions, borrow from international financial institutions, reduce government expenditure, restore fiscal discipline, and narrow the high current account deficit. Eventually, the country is now in a situation where the restoration of macroeconomic stability has become visible.
The government has been touting the stock market as evidence of its macroeconomic stability. The Pakistan stock exchange has been rated as among the best performing in the world. This rally is expected to continue for several months. There has been a recent investment of around $1 billion in the bond market while Foreign Direct Investment (FDI) has also increased by more than 200 percent in the last four months compared to the corresponding period last year.
The government is rejoicing that the exchange rate has been stabilized instead of hitting the speculated high of Rs300. The PTI is also content over the IMF’s quarterly review which postulated that Pakistan will exceed all targets by a wide margin. However, there is still a long way to go and even the prices of basic items such as tomatoes have not been reduced.
The government needs to remain committed to fiscal discipline to transform the economy. Pakistan needs to become an export-oriented economy as it brings crucial foreign investment. PTI should must highlight payment of taxes as a national responsibility. More importantly, the government should work with resourceful and determined individuals in the private sector to find solutions to infrastructure development problems.
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