Continuous decline

THE bloodbath at the stock market on Thursday is just another grim reminder of all that is wrong with the economy. The fundamentals continue to worsen — faster than before — as the country hurtles towards yet another financial disaster amid political uncertainty. The fresh losses suffered by the stock market over the last few days are just one symptom of declining economic conditions exacerbated by electoral uncertainty. The KSE-100 Index is said by market watchers to have lost almost 1,250 points over concerns of another potential hike in interest rates because of changing expectations regarding inflation as the rupee depreciates and power rates surge. The already ‘fragile’ investor sentiment also took a hit after the caretaker finance minister warned of a further hike in electricity and fuel rates, and asserted that the government did not have the fiscal space for subsidies. During her appearance before a Senate panel on Wednesday, she said there was little choice but to adhere to the IMF programme. Could the stock market bloodbath have been avoided had she not spoken the truth? Experts familiar with the state of the economy are not convinced.