Polls, uncertainty, and productivity

Pakistan has continued to witness boom-and-bust cycles through its economic journey. Economists have written at length about twin deficits, structural anomalies in the country’s economic engine which continue to fuel import-based consumption. Remittances, foreign direct investment (FDI), exports and foreign currency debt and deposits are key avenues to cover imports and debt obligations. Arguably, exports are the most important avenue to meet foreign currency needs. However, exports can materialise only if Pakistani products have a competitive edge in global markets. Consequently, being productive (increase in output per unit of input) is a necessary condition to improve exports and help shape the overall macroeconomic environment, making it more conducive for investment and doing business. A study titled “Sectoral Total Factor Productivity (TFP) in Pakistan” was published in January 2023 by the Planning Commission and the Pakistan Institute of Development Economics (PIDE).