The current government has inherited an ailing economy. The last government, post 2016 increased its expenditure to the point that a balance between expenditure and revenue growth seems impossible to achieve at this point. The projected five year plan for 2018 to 2023 has had to be revised, taking down the annual growth from 6.2 percent to 4.2 percent. The sector of agriculture, which yielded exports for the country, has suffered ruthlessly due to the negligence of successive governments and as a results our exports and their quality have gone down exponentially. No attention has been paid towards advancement in technology, which has allowed competitors in international market to take lead.

The growing scarcity of water will also have a huge impact on the market unless the government swiftly decides how to manage the situation at hand. There is a plan to offer better input prices to the local market but at least in the current fiscal year, reasonable prices could not be secured for wheat and sugarcane. The government is relying heavily on producing exportable surpluses, however, at this point in time there is a global trade slowdown which has affected prices. This will have an impact on our exports along with the recent devaluation of the Pakistani rupee.

Fitch Solutions in their study on Pakistan’s economy also project a downward trend in GDP growth of the country. This is primarily because of the fiscal and external account deficits that the country is facing. Despite State Bank’s attempt to stabilise the interest rates in the country, there is not much the new government can do to balance expenditures with revenue growth. There is no move towards privatisation of state owned enterprises which are failing miserably and are being saved time and again from taxpayers money without any accountability or projection of their growth. Foreign remittances are also expected to decrease. These primarily come from the Middle East and since oil prices are down, this will impact the flow of remittances as well.

Relying on the IMF and aid from allies is a temporary fix to the problem. Provinces along with the federal government need to be mobilised. Small and large businesses need to be taken on board with the modernisation of the industry along with efforts to increase the tax base. There is also a need to develop mechanisms to tax e-businesses and promote local goods and services before the influx of the Chinese market after the materialisation of CPEC.