Sinking feeling

IN the last six months since October, we have witnessed an unmistakable deterioration in the country’s economic fundamentals, with gloom overtaking whatever little hope the people had regarding their future. Global rating agencies have downgraded Pakistan’s credit score further into junk territory, saying Pakistan is hurtling towards sovereign default because of its balance-of-payments crisis and severe dollar crunch. Indeed, it is surprising that the government has so far dodged default despite the delay in the finalisation of the IMF bailout deal. However, the costs of this economic downturn have been too steep to bear for people and businesses. Multilateral lenders such as IMF, the World Bank and the Asian Development Bank have also slashed their growth and employment forecasts in recent months. For example, the IMF has downgraded its projection for the country’s GDP from a reasonable 3.5pc to just 0.5pc in this six-month period. Its latest GDP growth prediction is closer to the forecasts of the World Bank (0.4pc) and ADB (0.6pc). These lenders have also predicted significant loss of jobs as factories shut down or cut their output across different economic sectors.