A section of media on January 18 carried analysis and comments on "Global Economic Condition Survey" (GECS) and the latest edition of GECS contends Pakistan''s economy''s confidence fell in the final quarter of 2018 as it continued to struggle with macroeconomic imbalances.
It is important to mention that the preceding year witnessed a consumption-led growth reaching 5.79 percent. The economy posted a strong economic growth and low inflation though broadly it was consumption-led. A number of factors stimulated the aggregate demand, says a press release issued here on Saturday.
However, these trends led to the imbalance between consumption and domestic production eventually leading to the emergence of fiscal and current account deficits.
The survey further stated that Pakistan''s slump in confidence reflects weak outlook for the economy, which is experiencing balance of payment difficulties - current account deficit and fiscal deficit.
At the outset, it is too early to estimate the outlook of the economy as true estimates is compiled by National Accounts based on 9-10 months economic trend.
When present government came into power, it inherited daunting challenges of twin deficits along with bleeding PSE weighing on foreign exchange reserves and balance of payment. The priority of the present government was to undertake structural reforms of pricing and fiscal adjustments and correct the underlying imbalances.
The measures undertaken by present government at the fiscal and monetary front are aimed at balancing the fiscal and external accounts of the country. A relative slowdown in economy for some time is inevitable in order to eventually reach the higher level of growth that is also sustainable while both the fiscal and external sector imbalances remain under control.
The Finance supplementary (Amendment) Act, 2018 has been introduced to stabilise the macroeconomic situation, anchoring the inflation and reducing aggregate demand.
For stabilisation in medium-term, the present government has focused to stabilise the economy and moved towards export, investment and productivity led growth instead of consumption. This will support foreign exchange earning to bridge up the financing gap and escape from debt sustainability trap. All these efforts are poised to a sustainable growth path in medium-term.-PR
Comments
Comments are closed.