NO QUICK END TO CRISIS IN SIGHT

Various possibilities regarding how to bring the economy back on track are being discussed in financial, trade and industry circles, and it is becoming clearer that there may be no short-term remedy for our economic troubles. Instead, there appears to be a growing consensus that the suffering of the common people may continue for a historically much longer period even if the IMF comes to the country’s support. Much has gone wrong over the last 10 months. Many industries have been practically forced to shut production or bring capacity below 40 per cent; prices have risen at rates never experienced in recent history; and new waves of inflation are already in the pipeline, threatening to tear to shreds what remains of the purchasing capacity of common people. There is a strong fear among some stakeholders that the economy may never come back on track, and the situation may continue worsening both on the economic and political fronts. Record inflation, which may reach 33 per cent by the end of the current fiscal; critically low levels of foreign exchange reserves, and 44pc devaluation of the rupee since April 2022 have left no space for the economy — or the government — to perform. The estimated economic growth rate for FY23 has been slashed to 1.5 from 2pc. Pakistan has also suffered severe reputational damage due to frequent downgrading of its credit ratings.