Pakistan Economy Watch on Sunday said the new-year will bring more pain to the dejected masses. There are slim chances of economic recovery in 2012, as government will continue to divert all energies to the ongoing political struggle, it said. The rulers are only interested in securing themselves and gaining political mileage; they lack the will to take concrete policy actions, said Dr. Murtaza Mughal, president of PEW.
He said that short-sighted decisions and mismanagement proves that economic revival is something that is yet to attract leadership or opposition. He further said PEW expects three to four percent fall in GDP, lower agricultural growth by seven to eight percent, inflation beyond manageable limits, futile attempts by SBP to contain rising prices and printing of currency, enhanced current account deficit, and dwindling foreign inflows.
International lenders may not change their attitude which will keep local currency and reserves under pressure while dollar may climb, he added. He said that government will continue to keep tax-to-GDP ratio in single digit to please landed nobility and avoid reforms in public sector enterprises to please party workers which will inflict a loss of around Rs 400 billion.
It will be difficult to meet the revenue target of Rs1,952 billion as government will continue to compromise due to the elections which can widen the fiscal deficit to seven percent, he said, adding that domestic debt will touch Rs 1.5 trillion mark by the end of this fiscal. The textile, automobile, cement, pharmaceutical and fertiliser sectors will feel the heat while food insecurity and reduced allocations in the PSDP will be additional factors haunting masses, he said.
The prices of fuel, electricity, vegetables and all edibles will go up while sugar prices may remain average-stable. Dr. Mughal said that energy crisis, Rs 400 billion circular debt and deteriorating environment will continue to contribute to reduced business activities, compounded uncertainty and missed growth targets in the 2012. Masses should not expect any improvement in 2012, as it will remain a tough year for majority who will face more jolts, he concluded.-PR