The situation will change after the new government!
Asian Development Outlook said, “Business sentiment will improve on the return of political stability with the formation of a new government following the scheduled general elections.” It states that the economic situation has severely deteriorated in the current financial year on a large scale. Pakistan is at great risk as foreign exchange reserves are severely depleted. The country’s official foreign exchange reserves are around $4.2 billion, which is enough for one month’s imports. The report states that the economy at the international level is growing at a very slow pace. Energy and food prices have also increased due to the Russia-Ukraine war. Due to this, difficulties are increasing.
scary GDP rate
ADB projected a GDP growth of just 0.6% for Pakistan during the current fiscal year. It is the second worst in developing Asia after Sri Lanka, which will see a decline of 3%. The inflation rate in Pakistan has been estimated at 27.5% and is a matter of great concern. But the actual figures will be available only by June 2023 and it is believed that at that time the figures may be frightening. Average inflation has already touched 27.3% in the first nine months of the current financial year. The annual inflation rate stood at 35.4% in March.
It is necessary to return the trust of investors
ADB has noted difficulties for Pakistan in arranging foreign loans and has also described the current situation as critical. According to ADB, only when a new government comes in after the next scheduled general elections, there will be some improvement in the situation and investor confidence will be restored. The ADB says that the IMF’s program which is currently stalled should be restarted to reduce falling foreign reserves and ease the balance of payments crisis. Along with this, other financial sources also need to be encouraged. On the other hand, the World Bank has also expressed similar views on the economic condition of Pakistan.