The Pakistan Economy Watch (PEW) on Sunday expressed grave concern over deteriorating economy saying that interim set-up lacks focus on economy. Lack of serious attitude towards economy on the part of former government has left country with two options, seek IMF loan or face an economic collapse, said Dr Murtaza Mughal, President PEW.
He said that economy is facing serious challenges that include sluggish growth, mounting energy shortages, drying investment, rising budget deficit, climbing public debt, escalating unemployment and rampant poverty. The FBR has failed to achieve collection target as usual paving way to third downward revision in the target which will be difficult to realise due to political uncertainty and low productivity, he said.
Broadening of tax base, improving the equity of the tax regime, documentation and checking evasion takes a back seat as against 3.2 million commercial electricity connections less than 50,000 file income tax returns. Dr Murtaza Mughal said that country has repaid around $3 billion to the IMF in the current financial year and it has to pay $3.17 billion in the next fiscal that will put unbearable strain on the forex reserves.
A stable government after timely elections is critical for Pakistan's survival as it will be able to obtain external funds to address dwindling foreign exchange reserves, he said.
The elected government will have no option but to correct unsustainable fiscal and economic policies to seek new loan from the IMF to stabilise the face an economic breakdown, he stressed.
He said that IMF will demand of the new government to take unpopular decisions like implementation of tax, power sector and fiscal reforms and cuts subsidies which will be a difficult task.
Dr Murtaza Mughal said elections may end prevailing uncertainty but a fragmented government may not be able to implement tough reforms which will be disastrous for the economy," he warned.-PR
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