Pakistan Institute of Development Economics

P & R Vol.1 Issue 3
Managing Growth with Stabilization I
Publication Year : 2020

Pakistan has been struggling hard for stabilization and strappingly relying on IMF programs for decades. Pakistan is extensively running after loans with the hidden conditions and now the state reflects that Pakistan is under pressure of approx. 53 billion debt. IMF internal evaluation report depicting that three things which lead towards austerity mainly include design failure , implementation failures related to government and institutional decay. Now the problem lies in the capacity issues especially in FBR, Ministry of Finance and Planning Division and finally the tax policy which is an absolute disaster of all. Considering the last program where offering a number of waivers , appreciated exchange rate, loss of reserves that built up debt during the program , increased energy prices and increased circular debt creating mess in the energy sector. Unfortunately, all these factors reflect the declining long run growth rate as well as investment rate i.e. Pakistan is lowest in Asia.