According to a statement by the State Bank of Pakistan, political crisis and floods are the principal areas of concern for the economy, tending to increase inflation in the country. The bank also says that the country’s economy experienced stable macroeconomic conditions and inflation remained at the lowest ebb in August after June 2013,expressing the hope that the rate of progress is promising and will continue until next year.The bank has decided to keep the policy rates unchanged and continue to fix at 10 percent. Another aspect of the fiscal liberalisation is that the budget deficits are contained, the government borrowings are restricted, and inflation is recorded at 4.7 percent in August. However, political chaos and floods remain as a threat to the economic recovery and could cause delay in finalisation of the fourth review of the International Monetary Fund.
The bank has also expressed the apprehensions that floods could damage autumn’s crops and affect the supply chain besides adversely affecting the industrial sector which depends on the agriculture sector.
The bank has correctly pointed out the threats to the national economy – one is manmade and the other natural. Political instability brings down the graph of the economic progress and this is witnessed on various occasions in the past. Earlier, before the general elections, all the political stakeholders across the board were agreed on one point that there is a need to improve economy which was not in a good shape. Politics without economy brings chaos, but in the current scenario no one in the political divided is ready to sacrifice one’s personal interests on the national interests. The country has passed through many experiences in the past, but now this type of trend should end and the politicians, who matter, should come forward to do some serious business.
Soon after talking oath to his office, Prime Minister Nawaz Sharif had said that he had only a three-point agenda and that was business, business and business. All the other heads of major political parties also expressed the same views about the economy and vowed to support the government. But the rally of support faltered within one year. Pakistan Tehreek-e-Insaf chief Imran Khan and Pakistan Awami Tehreek chief Dr Tahirul Qadri are in Islamabad along with their supporters and are demanding the resignation of the prime minister. This is creating disappointment among the general public.
Regarding floods, is unfortunate that thousands of people are killed and thousands of others are rendered homeless every year, but the government never took a solid step to stop this kind of catastrophe. Pakistan is a water scarce country and floods can bring boon in the country rather than doom if big water reservoirs are constructed to store water for electricity generation and agriculture purposes.