The government is eying on achieving ambitious 5 percent growth in the gross domestic product for the current fiscal year ending in June, as the International Monetary Fund has approved the second last tranche of its extended facility program for Pakistan. The Asian Development Bank and the IMF expect this year’s growth at 4.5 percent, but the challenge of terrorism and energy are not only hindering the growth rate but also utilization of potentials. After achieving independence, Pakistan kept itself aloof from the World Bank and International Monetary Fund, but started taking loans in 50s and now all its economic policies seemed to be subjected to the approval from donor agencies. Pakistanis are now overwhelmingly reeling under tax burden and the government is unable to provide relief as it has to meet the conditionalities of the lending agencies. So far,Chinese investment of $46 billion in economic corridor is the hope and optimism for the nation and the government will at least try to achieve 5 percent growth in the GDP.
During the era of former president Pervez Musharraf, the government had refused to accept the last installment of loan from the IMF, but the current government again persuaded the donor agency for a bailout programme. Now the fund wants Pakistan to rid itself of the loss making entities, including the national carrier. The government has already raised about $1.5 billion by selling its stakes in the country’s banks which has helped the State Bank to increase foreign reserves to about $20billion. The government is also facing an issue whether it should continue fiscal consolidation or adopt expansionary policies. According to experts, the growth remained slower during the expansionary period from 2008 to 2013.They also see a consistent decline in fiscal deficit and it is expected to come down to 4.3 percent of the GDP from around eight percent in 2008-09. The growth remained at average 4.2 percent of the GDP during the last two years.
According to expert, the value of rupee is stable and inflation has been hovering around 3.5 percent for the last eight months, which has brought stability in prices of daily use items. However, after achieving financial stability, the government will have to concentrate on growth. Exports havedeclined by 14 percent during the first seven months of this fiscal year, but the auto and agriculture sectors are performing better than the past. The next budget is round the corner and it is yet to be seen how the governments continues its travels from fiscal consolidation to industrial growth.
