Interest payments remain a challenge as govt paints rosy economic picture

Painting a positive overall macroeconomic picture, the caretaker government is now hoping for a downhill journey from the painful inflation rate and a further increase in economic activities over the coming months. “Pakistan’s economy is on a gradual but promising path to recovery. The stride of economic revival initiatives is driving a surge in economic activity,” said the Economic Advisers’ Wing of the Ministry of Finance in its monthly Economic Update & Outlook, but warned that higher mark-up payments could put significant pressure on expenditures. It said the positive economic signals and recovery indicators had triggered market sentiment, propelling the Karachi Stock Exchange Index by over 33pc in November and surpassing the 60,000-point mark for the first time in history. It attributed the market sentiment to a sustained monetary policy stance and successful IMF staff review in November and noted that the exchange rate remained stable, owing to reforms in exchange companies and a reduction in illicit transactions, which exerted a positive impact on overall economic activity.