In its annual Middle East and Central Asia Regional Economic Outlook report, the International Monetary Fund has suggested the government to boost its exports and economic growth by taking full advantage of the global economic recovery. The report also suggests that bilateral and multilateral trade agreements with partner countries can play an important role in fostering more open trade in Pakistan and that an increase in the volume of exports during the first half of the current fiscal alreadyhelped strengthen economic activity in the country. The report specifically refers to the importance of apparel production which is part of an important value-added sub sector of the textile industry and it earns over 60 percent of the country’s annual exports of $20 billion. The country has improved quality and standards of apparel production in recent years and stronger global economy can help Pakistan in dealing with balance of payment problem despite the rising current account deficit which stands at 4.9 percent during the fiscal year 2017-18 as against four percent last year.The country desperately needs to maintain its foreign exchange reserves as the external debt are likely to increase to over $80 billion in the second quarter of the current fiscal year from $75 billion in the first quarter of 2017. However, the government is trying its best to stay away from entering into another bailout programme with the fund management.
Pakistan is facing multiple problems from political uncertainty to inconsistent business and trade policies. In the absence of a stable government in the center and incapacity of the provinces to devise growth-oriented economic policies, the country is sinking in debt crisis. The IMF report also underlines the importance of the agriculture sector, which heavily relies on weather conditions and price development. However, the fund will not come to rescue the nation from economic or financial quagmire. It is the nation which has to focus on the value added goods to increase not only industrial production, but also agriculture yields. The fund expects that investment in the China-Pakistan Economic Corridor will strengthen credit growth and will push the country’s real GDP growth at 5.6 percent in 2018.The report also expectsthat spike in public investment will spur medium-term growth. However, what the fund will never suggest is that the country will have to minimize its reliance on foreign loans which will ultimately subdue economic progress in the country. A growth in overall GDP is the need of the hour to ward off the pressure of the budget deficit and resolve balance of payment problem.
