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| Is Pakistan Economy Moving Upward- In the light of World Opinion |
Look at the voice spread over the local electronic and print
media about question "Is Pakistan's Economy Improving?", what
audience hear or read is big "No" except the few. In upcoming lines
the global point of view will be represent to the audience regarding the same
question “Is Pakistan's Economy improving?"
Prime Minister repeatedly has said that on different world forum that in year
2020, world will witness the upward economy growth and Pakistan's e Economy development; especially
I would like to quote here World event World Economic Forum where he had made
this claim.
Analysis
Generally, four macroeconomics indicators are being considered at the time of evaluation of any economy. These four indicators are
1.
Current Account
Deficit and Pakistan's Economy
2.
Foreign Direct
Investment
3.
Private Investment
- Foreign Reserves
Current Account Deficit and Pakistan's Economy
According to the Diplomat, Pakistan's Current account deficit had been narrowed
by 80 percent to a $259 million which is lowest figure since last 41
months. This indicator shows positive signal for the Pakistan's economy.
Foreign Direct Investment and Pakistan's Economy
As government of
Pakistan led by Imran Khan's Party PTI and his alliance maintaining high
interest rate at 13.25 percent through State Bank of Pakistan not only to
counter high inflation rate but also attracting foreign direct
investment. The government of Pakistan has succeeded to achieve both
objectives. Figures Shows that there is 111.5 percent increase in foreign
direct investment (FDI) which has been invested in treasury bills and others
instruments.as well. Further, $1.34 billion cash inflow was registered during
the current half fiscal year as FDI, 68.3 % increase was recorded in January,
compared to $796.8 million for the same period of last fiscal year.
What are the reasons
that direct foreign investment come to Pakistan's Economy?
To grab the benefits
of high interest rates, foreign investors put their money into government risk
free instruments such as treasury bills, and rupees convertible account. For
example, the interest rate in USA is 1.75 percent, so they are borrowing from
US locally, and investing them here where the interest rate is prevailing at
13.25 percent. This exercise has helped the government to attract the $2.2
billion into the Pakistan's economy. If the government drops the interest rate, the
investors will go back.
Private Investment
Private investment figure also shows a healthy increase that is 194
percent.
Foreign Reserves or Forex Reserves and Pakistan's Economy
This is another most important macroeconomics indicator use to evaluate
the performance of any economy. Healthy Foreign Reserves means economy performing
well, and vice versa. Foreign Exchange Reserves shows the ability of a country
to pay off his foreign bills. As foreign exchange reserves of Pakistan are
worse, but PTI lead government put it on little bit healthy position with figure
$11.586 billion (State Bank of Pakistan) which is of last 21-month high Number.
Moody’s Investors Services Report
Moody’s Investors Services – a USA based leading global agency has upgraded the Pakistan credit
ranking from negative zone to stable by awarding it B3. This upward outlook of
Pakistan’s Economy has been revised after a long period of 18 months. But remember,
the same has degraded the outlook of Pakistan’s Economy to negative in June,
2018. This report puts up the Pakistan's Economy ranking on better position.
Ease of Doing Business Index
The World Bank has also acknowledged that Pakistan has succeeded to rank himself
among the top 10 improved countries in the Ease of Doing Business Index.
Over all view of the Pakistan's Economy
The Imran Khan’s PTI lead government has taken hard decision for the
betterment of the economy. The government did not make any effort to put the
Rupee-Dollar parity around 100 artificially like Mr. Dar in Pakistan Muslim
League – Nawaz Sharif lead government. The government has allowed market-driven
forces to settle the Dollar-Rupee parity independently. Some experts say that
this action was actually the implementation of International Monetary Fund –
IMF instructions prior to go to bail out agreement. Currently the US dollar
rate is Rs155 comparing to 165 which is a clear indication that Pakistan’s
Economy is on right track while dollar – rupees rate is in the hands of the
open-market forces.
Recently release of $450 million installment by the IMF
reflects the satisfaction of Agency on policies of the government of PTI lead
by Imran Khan. Pakistan will get more FDI as he gets rid of the grey list of Financial
Action Tasks Force-FATF, a counter terror watchdog. Recently, the government has
dropped the prices of the fuel giving relief general public or common man. Some
experts say that government should pass on more relief to common man because
the oil prices are drastically dropped at international level. The betterment in Pakistan's Economy is a pleasant surprise for the world economy players nevertheless Pakistan's Economy challenges are severe in nature.