The ramshackle Pakistan economy: Is there a way out?

The ongoing economic crisis in Pakistan is the result of political chaos of last year that saw the removal of the government by a vote of no confidence in 2022 by Pakistan's parliament, and the resulting disturbance in the nation made a political drama.

- SHARANPREET KAUR

The country fell into an economic crisis with severe inflation that has been predicted to stay at 33% during the first half of 2023, and the World Bank, during the first week of April, projected about 4 million Pakistanis falling below the lower-middle-income i.e. $3.6/day. The ramshackle economy is surely problematic, and the country is depending on a few hopes to solve the crisis.

THE IMF DEAL AND FRIENDLY HELP FROM OTHER COUNTRIES:

The IMF favours expenditure controls, better tax administration, and an end to subsidies and export tax rebates that favour larger firms and cartels. The Pakistani rupee has lost ground to the US dollar, fueled to some extent by the flooding interest in sneaking of dollars in adjoining Afghanistan. Minister Dar probably failed in his insight as he anticipated a strong rupee even before he returned to Pakistan from his perch in London. Dar undercut former finance minister Miftah Ismail, who gave off an impression of being hopeful about an agreement with the IMF in June 2022. The IMF deal didn't occur, and Ismail was terminated not long after Dar arrived in Pakistan. Islamabad has been haggling with the IMF since early February to get $1.1 billion aid as a component of a $6.5 billion rescue program agreed in 2019. The IMF inflows still didn't appear until late March 2023, and April has become the cruellest month for Pakistan as there are scenes of the IMF deal falling through and a government debt default occurring.