Pakistan’s Economic condition had been under immense pressure soon after the PMLN reign was ended. The new PTI government being naive in governance without any prior experience to run the country had been under the spotlight of critics and opposition for miss management and economic unfriendly policies for the first year in government.
However, the government took drastic measures to stabilize the economy and chalked out the economic driven policies including some unpopular tax decisions according to the business community which was scared to unveiling business transactions and bringing themselves into the tax net.
However, despite all this Pakistan has some critical indications which translate the country’s economy is on the track and heading towards a safe and sound journey.
1- New Taxpayers
Pakistan’s current government was able to bring as many as 800,000 new taxpayers into the taxation system due to its efforts. The more taxpayers mean more revenue to the government which is important for the country to build a strong revenue collection base. This also shows people’s interest and trust in the government and their support to bring the country out of the crisis.
2- Current Account Surplus
Pakistan’s current account deficit widened during the previous two governments since 2008, the current account deficit also increased during the first 49 months of PTI government, however, after posting a deficit for continuous 49 months the government has now recorded surplus in the current account. This is expected to increase in the coming months.
3- Reduced Imports
Government policies to curb imports in order to reduce trade deficit worked well, Pakistan has been able to bring the imports down by 38% due to effective import policies. The government has levied taxes on unnecessary imports which helped the country to generate more revenue from imports along with reducing the trade deficit. However, this policy also played an important role in price increases.
4- Bullish Stock Market
Pakistan’s stock market has gained a strong upward trend in the last few months, the market reached a nine-month high last month due to strong investor confidence. According to Bloomberg, Pakistan’s stock market surged by 30% which added almost 10,000 points since last August. It was also reported a few weeks back that Pakistan’s stock market outperformed the world’s leading stock markets.
5- Foreign Direct Investment FDI
Pakistan has also witnessed a positive increase in FDI, apart from Chinese investment in the country as part of the CPEC project, other countries including the US, Turkey, Germany, Saudi Arabia, UAE, UK, France, and Malaysia also are the key players to invest in Pakistan. According to Financial Times, foreign investors are pushed to invest in Pakistan’s Rupee bond, if this goes well, it will also help the country to strengthen its currency in the future.
6- Exports Up
Though exports did not record anything plausible, Pakistan has witnessed an upward trend in exports, this is the area where the government needs to put more emphasis, chalk out new policies and build the infrastructure needed for exports. This is the area where the country needs to serve all of its energies.
7- Currency is Stabilizing
Pakistan’s Rupee was under great pressure since the beginning of 2018, which seems to be stabilizing now, however, the current Rupee to the Dollar exchange rate is still unbearable for the country. The government has plans to further control the exchange rate via various short-term and long-term tactics. Last month, Pakistan’s foreign currency reserves surged by $443 million in just one week, further the government expects them to increase in the coming months.
8- Foreign Remittances
The country has also witnessed a surge in foreign remittances, the government also has plans to provide incentives for foreign remittances according to Dawn. According to the data provided below, the PTI government has seen a significant increase in foreign remittances during their tenure. The foreign remittances also help the country to generate more money inflow rather than outflow.
9- Ease of Doing Business (EoDB) Index Up
The Ease of Doing Business EoDB index help the foreign and domestic investors to set up and do business in a particular country, the easier it is the more business investment is expected to hit the country. The Nation reported last week that, “Minister for Economic Affairs on Tuesday said Pakistan’s ease of doing business index increased by 28 places according to the World Bank’s ease of doing business ranking. PTI also focusing on facilitating the businesses further and the ranking will improve in 2020.