SUMMARY of the Article “State of the economy,” Editorial, Dawn, June 13th, 2024

The editorial examines the state of Pakistan’s economy for the outgoing fiscal year as depicted in the new Pakistan Economic Survey. It suggests that while there has been some stabilization in key macroeconomic indicators, this stability is fragile and heavily dependent on IMF support, which necessitates yet another larger bailout. The finance minister acknowledged this vulnerability at the survey’s launch. Although the economy appears to have hit rock bottom in the last financial year, the slight improvements in macro indicators this year are seen as progress. However, this does not offer much hope for the future. The editorial highlights that the economy likely expanded by only 2.4%, slower than the population growth rate, driven primarily by increased output in cotton, wheat, and rice crops rather than industrial recovery. Agriculture saw a growth of 6.3%, the fastest in two decades, but its reliance on major crops highlights structural weaknesses. The industry and services sectors expanded by just 1.2% each, meaning no new jobs were created to accommodate the growing workforce. The government managed to reduce the current account deficit to $200 million in the first ten months against a $6 billion target for the year, avoiding a default on foreign payments and building international reserves to $9 billion, which stabilized the » Read More…