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Potentials of Pakistani economy

Potentials of Pakistani economy

According to the UN Department of Economic and Social Affairs, financial and investment conditions are favourable in most of the South Asian economies, including Pakistan, due to accommodative monetary policies, low inflation and rising business confidence in recent years. Pakistan has the potentials to become leading economy of the world, but it has been under-performing since inception. The UN report suggests the economy of Pakistan needs to improve its growth rate and its policymakers should have to lay the foundation for achieving sustainable and inclusive growth in the medium-term. There is great demand for investment opportunities in Pakistan despite low industrial growth, under-performing agriculture sector and irrational tax rates. The government policymakers have so far failed to devise a uniformed and unambiguous tax system in the country, but still the economic activities are gaining momentum, which are supported by improvement in the energy supplies, development of infrastructure under the China-Pakistan Economic Corridor and other public initiatives. However, there is a need to lower loan demands which have witnessed visible rise during the first two quarters of the fiscal year 2017-18, especially in the corporate sector. The UN report suggests that the positive growth picture and policy reforms are supporting the private investments in several countries.

The world economy passed through a long period of recession and subdued growth, but renewed investment trends, supported by consumer sentiments, have strengthened and pushed up the growth rate in a couple of years. The report says that due to reduced banking sector fragilities in developed countries, conditions of the global investment have improved. As a result, the financing costs remained low in emerging economies, strengthening by the recovery of capital flows and cross-border lending and higher commodity prices. However, a long period of recession in developed countries increased vulnerabilities of various emerging economies, which kept the potential investors at bay, increasing financial risks and borrowing costs. The economy of Pakistan is at the crossroad where it has to decide which way to go. The political uncertainties are growing with political parties fighting with one another for their vested interests. The monetary policies, tax system, and other measures for the revival of the economy are left on the mercy of the bureaucracy. Not a single political party has a team of economists or technocrats and they all struggle to enter the corridors of powers without any economic plan. This is the unfortunate part of this nation that it has no visionary leader to extricate it from the economic and political mess.