It will be a decisive moment as the coalition government is set to unveil the federal budget today which will pave way for the path we are headed in the upcoming year. The government released the economy survey which shows a high growth rate of nearly six percent despite claims that the economy has been on a downturn.
Former prime minister Imran Khan said the economic survey has endorsed the performance of the PTI’s government as they were heading in the right direction before being unceremoniously removed. He even question why the coalition government conspired to come to power when it was not ready to deal with the economic situation.
Interestingly, this is the first time a new government is presenting the economic performance of the previous government. According to the economic survey, Pakistan rebounded in the previous year and maintained a V-shaped recovery by posting a GDP growth of 5.97 percent. Still Finance Minister Miftah Ismail claims the high growth created problems for the trade deficit and balance of payment crisis.
The PML-N government will seek credit for the federal budget even though it has been in power for less than two months. The government claims it has brought stability and averted a financial crisis. But it has also increased the prices of fuel and electricity even though the decisions are unpopular and could have severe political repercussions.
The country once again stands at a critical juncture. It desperately needs loans to prop up the economy and the IMF deal seems to have been delayed. Moodys has downgraded Pakistan’s credit rating to negative and it will be difficult to receive loans from multilateral agencies and foreign countries. The government has no option but to seek loans from Chinese commercial banks.
The government hopes to remain in power till the next year. If it manages, the economic performance will be vital ahead of the next elections. The government maintains the growth rate for the next fiscal year will be higher contrary to claims by World Bank which has forecasted 4 percent. It has also warned of stagflation (economic stagnation and inflation) which may lead to unemployment. It needs to be seen if the government will pass a budget that delivers for the masses.
