Political instability heightens economic challenges: SBP

Despite some improvement in macroeconomic indicators, the economy continues to grapple with structural bottlenecks, while political uncertainties and inconsistent policies exacerbate the situation, said the State Bank of Pakistan (SBP) on Tuesday. In its six-monthly report on ‘The State of Pakistan’s Economy, the central bank said the major issues include limited savings, low investments in physical and human capital, weak productivity, stagnant exports, narrow tax base, and inefficiencies in public sector enterprises (PSEs). “Additionally, political uncertainty exacerbates the situation through inconsistency in economic policies, weak governance and public administration, hindering investment and thus economic development,” said the report, adding that these underscore the need for policy reforms to ensure sustainable development over the medium to long-term.