Two months into the ongoing economic adjustment and there are signs emerging of growing anxiety with in the government. The IMF programme that the government signed on to in June carried some of the steepest and most challenging targets ever seen, and the task of meeting them is proving to be a herculean feat. Reports from industry leaders suggest many manufacturing outfits are seeing an approximately 30 percent decline in sales.

This comes after the large-scale manufacturing sector posted a near 54 percent contraction last fiscal year, the first such massive contraction in a decade, so an intensification of the trend is hardly something the economy can afford. Coupled with this is the aggressive revenue collection drive that the government has no choice but to pursue to meet a historic 30 percent hike in the revenue target for this fiscal year.

The reason to be anxiety at the highest levels in times such as these, with people reeling from the multiple impacts of exchange rate depreciation, rising inflation, aggressive taxation measures, collapsing market demand, erosion of purchasing power and sales, high interest rates, to name just a few of the elements that mark today’s malaise. The State Bank governor appeared before a large gathering of industry leaders in Karachi to underline the importance of building reserves.

Bank governor need to ramp up their outreach efforts with the business community as they move forward down this difficult path. The relaxation of Pakistan’s economy is being replaced by anxiety. The country’s economy will be as much low as they cannot imagine when such effort continues further in future.