June 09, 2023 (MLN): Pakistan is facing many challenges given the current economic conditions characterized by stagflation and a multitude of uncertainties surrounding the upcoming elections and the fate of inflows from the IMF and other lenders, its growth rate remains modest at just 0.29%.

However, Pakistan’s economic trajectory has seen a shift from its previous commendable performance, with divergent trends observed under the PTI-led administration and the preceding PML-N government.

During the period of 2013-2018, under the PML-N government, Pakistan’s GDP grew from 3.9% in FY13 to 6.1% in FY18, taking the total GDP of the country to $356.8 billion in FY18 from $258.9bn in FY13.

However, the PTI-led government struggled to continue this growth, with GDP remaining at 6.1% in FY22, totaling $375.5bn with a mere increase of $18.7bn.

This significant decline in economic growth raises concerns about the overall progress made during the PTI’s tenure.

Similarly, the country achieved progress in terms of fall in prices, with the PML-N government successfully managing to curb inflation during their tenure, reducing CPI inflation by 270bps, food inflation by 330bps, and core inflation by 380bps.

On the other hand, the PTI government faced challenges in controlling inflation, as the CPI inflation rose from 4.7% in 2018 to a staggering 12.2% in 2022.

Similarly, food inflation also rose by a staggering 960bps, indicating a higher burden on consumers, while core inflation also rose by 230bps.

On the other hand, during the PML-N era, the country faced a trade deficit, with exports as a percentage of GDP falling by 2.6%. However, there was a notable influx of foreign direct investment (FDI) amounting to an additional $1,324 million during the period, suggesting a positive sentiment towards Pakistan’s business climate.

In contrast, the PTI government managed to improve exports as a percentage of GDP by 1.7%, demonstrating progress in international trade. However, FDI experienced a decline of $844 million, indicating a potential concern for the investment climate.

The PML-N government witnessed a substantial increase in public debt and liabilities, increasing by Rs13,541bn. External debt increased by $22.1bn.

Comparatively, the PTI government faced a much higher burden, with public debt increasing by Rs24,289bn and external debt rising by $18.6bn.

Moreover, the PTI government also experienced a decrease in forex reserves, marking a decline by $0.9bn by the end of their tenure in 2022.

During the PML-N government’s tenure, per capita income surged from $1446 to $1768, depicting a change by $322, showcasing a moderate level of growth. However, under the PTI government, per capita income declined by $2, indicating a setback in individual economic well-being.

However, It is pertinent to note that, during PTI era, the world experienced the impact of Covid-19, a global pandemic that had profound consequences on economies worldwide.

Even countries like the U.S. faced its consequences, witnessing a steep decline in the GDP growth rate and a skyrocketing inflation to levels not seen in decades.

For instance, the CPI inflation rate of the U.S. went from below 2% to a high of 9.1% in 2022, reaching its highest point level since 1981.

Copyright Mettis Link News

Posted on: 2023-06-09T09:36:52+05:00