Pakistan’s economy has seen some of the biggest changes in the past two decades. With the growth of technologies and an increase in public relations, Pakistan has been trying to cope up each year so that the economy does not face any tragic downfalls. The trouble for Pakistan can only grow stronger if the politics of the nation does not take immediate measures.
One of the major cause of the downfall of Pakistan’s rupee is the denial of the State Bank of Pakistan to stop supporting its value. The foreign exchange reserves of Pakistan has been constantly pushed and pulled due to the ignorance of the central bank.
Pakistan’s exports fell for three years continuously between 2015 and 2017. In October 2017, the Commerce Ministry blamed the downfall on the overvalued currency. Many of Pakistan’s exporters are a part of price-sensitive sectors, and one way to improve the situation is to market the products they can produce in ample, like cotton.
In 2017, Pakistan lost 4 percent of the total GDP as compared to previous year. Pakistan’s problem became even worse by the end of 2017 as the total account deficit went down to almost twice as record in 2016. The situation continues to worsen even today, and if it still persists, it will not take long for Pakistan to take help of International Monetary Funds again.
Weak exports are only a part of the entire trouble. Import is no less of a problem in Pakistan when most of the goods are getting imported by China as a part of China Pakistan Economic Corridor. A major part of the imports is capital goods, which are nowhere close to being easily affordable. In the past few years, the value for imported goods increased to over 30 per cent. It seems like Pakistan is not really benefitting from the CPEC, and instead of getting themselves in more trouble. The IMF is right to be “appalled” at the implications for Pakistan, and they will have to pay back billions of dollars to China with no export recovery.
The politics of Pakistan is disturbed and could not take the right steps to stop the inflation of the Pakistan rupee at a sensible time. The only hope for improvement in the economy of the nation depends on control on the import and exports, efficient and corruption-free tax payments. Only with sustained business and supporting the private sector, Pakistan can expect its economy to grow back once again.