Recurring Economic Woes Of Pakistan || how to control economic crisis || Stream Knowledge
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List Of Recurring Economic Woes Of Pakistan:
1- Recurring Budget Deficit
2- Mounting Rate of Dollar
3- Rising Inflation
4- Dwindling Reserves
5- Delayed IMF Program
6- Balance of Payment Crisis
Recurring Budget Deficit:
It is described as a situation in which the revenues of the government are less than its expenditure plans for the current fiscal year. When the government faces this situation, it has to borrow from domestic or foreign institutions. As a result, the debt is accumulated to a greater extent.
Mounting Rate of Dollar:
Another major cause of concern for Pakistani stakeholders is the mounting rate of dollars in Pakistan. It is now estimated to be above 280 PKR. It increases the cost of imports. As a result, the prices of imported items are skyrocketing persistently. The current rate of inflation in Pakistan is above 40%.
Rising Inflation:
Likewise, the major concern of all Pakistanis is the increase in the prices of consumable items. As mentioned above, the inflation rate has gone above 40%. It has rendered the situation alarming for the masses.
Dwindling Reserves:
Similarly, the reserves of Pakistan have nosedived. It decreased to the point of below 3 billion dollars. It rendered Pakistan on the verge of default.
Delayed IMF Program:
Similarly, the incoming Pakistani government cannot ensure timely meetings of the IMF. Its program has been delayed which has created a sense of ambiguity in the business market of Pakistan.
Balance of Payment Crisis:
Similarly, the recurrent balance of payment crisis has not been heeded properly. Balance of Payment entails that you there is no balance in the receipt of what you receive from your financial transactions abroad and what you send as capital. It entails a balance of trade deficit in its broader horizon, which means that your imports are more than your exports.
Current Account Deficit:
The BOP problem primarily in the form of the current account deficit is one of the major issues faced by Pakistan. It is the root cause behind the inflation and growth problems. Inflation rises when the rupee depreciates due to CAD and similarly, growth above 4% becomes unsustainable as the jaws of CAD start to widen.
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