Achieving economic stability


The political instability is hitting exports and local as well as foreign investment which is not in the national interest. The private sector borrowing has come down from Rs618.2 billion to Rs607.5 billion which is now drying up and according to Chairman FBR, the revenue collection during the first two months has reduced by ten percent.
The Governor SBP has claimed economic stability which should result in softening of policies. If the claim is right then policies to discourage demand should be relaxed and focus on stability has discouraged economic activity, crippled large scale manufacturing, paralyzed vending industry and left markets without customers.
The interest rate hike and other steps have damaged the businesses while forex reserves have improved with the help of loans from friendly countries and IMF. The unprecedented loans have enabled the economy to withstand internal and external shocks however low revenue collection, exchange rate volatility, budget deficit and tensions on Kashmir can drag the economy down.
The current account deficit has been reduced from $18 billion to $13.6 billion which will be further reduced which required intervention and reducing imports. The inflation has jumped from 3.8 percent to 9 percent while the high interest rate and devaluation has damaged masses and the private sector which is reducing the GDP.
The interest rate has jumped from six percent to 13.25 percent in one year which has pushed banks to invest in government papers and avoid the private sector while the government has borrowed Rs1.37 trillion in the first month of new fiscal which has raised concerns.

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