Pakistan was not alone in braving economic grievances last year. However, going by the IMF’s estimates of a strong global recovery of around six per cent in 2021, our meagre growth of 1.5 per cent would not be shared by others. Add that to a consistently high rate of inflation (8.7 per cent), a sombre current account deficit (1.5 per cent) and a destabilising rise in unemployment (five per cent) and one can get a fair idea of the impact on everyday lives of citizens.
It would be considerably hard to expect them to sit tight and twiddle their thumbs as the economic growth picks up to five per cent by 2026. No matter how rosy Finance Minister Hammad Azhar’s predictions about the economy “grow(ing) faster than forecast this year,” may seem, the IMF’s predictions point to a subdued outlook, at least in the immediate future.
These growth targets have not just appeared out of thin air. A sharp fall in investment and private consumption thanks to pandemic-induced lockdowns was bound to cause a heavy toll on our profile. Nonetheless, the upward revision of around 0.5 per cent reflects the higher-than-expected outturns in the latter half of last year as the markets started adapting to the new normal. Yes, we cannot paint the town red over such a minuscule improvement in our status quo, but any good words are better than bad strokes.
Despite Pakistan enjoying its exports hitting an all-time 10-year-high last month, we cannot make light of the pressing circumstances being borne by our lower-to-middle income households. As the blocking measures have been put back in place, fears over a revival of IMF-induced contractionary policies hang even heavier. Hefty hike in electricity prices; skyrocketing food inflation; overwhelming job losses and widespread pay cuts: nothing seems to be going their way.
But when the going gets tough, the tough need to get going! Fighting international pressure to bring about “adjustments” that help the economy by dragging the masses to the altar is no small feat. No qualms about that! But only by balancing these corrective measures to put its finances on the right track with the welfare of its citizens, Islamabad can prove it is worth its salt. Governments in the past have exclusively focused on cosmetic reforms that have only resulted in repeated inclination on the ICU of economies. This time, the skipper can make a difference by utilising his energies on real changes. An important stepping-stone in this regard is putting the proverbial inflation genie back in its bottle. It is impossible to not let macroeconomic trends influence domestic waters. However, policies that maximise public relief can, and should, be sought after without any ado.
Only time will shed some light on what scars the COVID-recession has left behind. As the government puts the brakes on its fiscal stimulus package to cushion the pandemic effects, things are likely to further go down the plughole! Already, speculations are running high about up to 40 per cent of Pakistanis forced below the poverty line in the viral wake. Let’s just hope the government can come through for its not-so-fortunate nationals. *