The IMF team in Islamabad has asked the government to take some extraordinary steps to rescue the economy that are in fact no different from those urged by the State Bank of Pakistan. The IMF has warned about the GDP growth rate going down in the days to come, which points to the grim inflationary spiral.
It pointed to an invariable hurdle to the economic growth which is that of the government printing extra currency notes as part and parcel of its spending spree. This has over the period of time caused a large fiscal gap that the government is now trying to bridge through frequently raising electricity tariffs. The advice to broaden the tax net as well as reforming the energy sector is worthwhile; there is absolutely no doubt that economic development is hampered owing to the power crisis, called by the mission as the “perhaps the largest single impediment to the macro-economic growth”. Though it is alright that emphasis has been laid on the macro-economic growth, it is necessary that the microeconomics too is given focus in view of the prevailing levels of poverty and average man’s dilemma to survive. The business climate is coping with another invariable impediment of poor law and order situation that has constricted foreign investment and even home-based entrepreneurs. One expects the government to follow these prescriptions in earnest, a gloomy scenario that calls for implementing these reforms on a war footing.