Syed Fazl-e-Haider has provided an assessment of Pakistan's economy. It doesn't look good, but what country's economy looks good these days? From
- The country got a US$750 million from IMF in order to manage balance of payment problems after reserves sank 75% and donor countries refused to help out. They are now hoping for a second installment of the same amount, and so far they have been able to stay within IMF stipulated requirements.
- The World Bank plans to provide up to $2 billion in credit to
this fiscal year to support economic growth and the government's poverty-focused programs. Pakistan
- Inflation is declining but in January it was at 20.5%; it was 25% last October. The central bank interest rate is 15% and there is a chance of a cut in interest rate. It has “increased its benchmark interest rate five times in the past 18 months to tame core inflation (that is, excluding food and energy)”.
- The trade deficit has increased 3.5% to $10.727 billion in seven months (July-January) of 2008-09 from the corresponding period a year earlier, mainly due to costly imports of oil, fertilizer, wheat and other essentials and a decline in the textile sector's dyeing exports. Moreover, “the $22.10 billion export target for the fiscal year ending in June seems beyond reach.”
- Foreign exchange reserves have been falling.
- The country is likely to miss its annual fiscal deficit target of 4.2% of GDP set for the current fiscal year ending June 2009. "If the current trends persist, and strong corrective measures are not undertaken promptly, the annual fiscal deficit target of 4.2% of GDP for 2008-09 may not be met," according to the Fiscal Policy Statement 2008-09 recently released by the Finance Ministry.
- Domestic debt rose by 9.27% during the first half of the current financial year.