ISLAMABAD- The Pakistan Economy Watch (PEW) today said continued political instability has compromised government’s ability to generate revenues which will result in increased debt burden and inflation.
Governments generally rely on taxes, exports, debt and printing currency to meet their expenses. PEW president, Dr. Murtaza Mughal said that insufficient tax income would increase debt burden which has already crossed over 60 percent of the GDP. Alternatively, government can opt to print currency eroding exchange rate and triggering inflation, he added. Dr. Murtaza Mughal said that distorted distribution of wealth had reached new heights and heavy reliance on indirect taxes was bleeding the poor while the government continued to provide incentives and exemptions to business community. The government is ignoring the middle class, he concluded.