As the year ended among political uncertainties and disruption in financial management due to the absence of a full-fledged Finance Minister the challenges ahead for Pakistan’s economy has touched unprecedented point and therefore, needs a very crucial planning and careful scheduling of disbursement.

Due to the fall in Rupee the economy has suffered. It may be mentioned here that when the central bank took back its support on December 13th, Pakistani rupee was hit hard, adversely affecting the currency. Pakistani rupee has always remained between 104 and 105 per dollar since 2015, but in last three sessions it lost its value by over 5 percent. Currency’s level always has a direct bearing on various aspects of the economy.

The outcome of the devaluation of Rupee against US dollar in the domestic market incidentally coincided with a rise in the crude oil prices in the global market resulting in an upward trend in oil prices from January 2018. The trend will obviously result in increase in the manufacturing and transportation cost resulting in price hike of all the commodities produced locally. Thus in 2018 the country may witness considerable price hike. Therefore, inance managers of the country, take all possible measures to maintain price hike to an acceptable level.

With no major change in massive issues like electricity and gas shortage, unemployment, and poverty, Pakistan may continue to face the problem of fiscal consolidation. The absence of practicable ideas based on ground realities to deal with the changing circumstances, may turn out to be the government’s most significant weakness to maintain financial discipline and economic harmony.

On the other hand balance of payments issue may pose very serious risks to economy during the next fiscal year, mostly because of ballooning deficits and erosion in foreign exchange reserves down the line. The business community also expects the next year to be full of challenges. They argue the country requires paying $12 billion in first half of 2018 as per its liabilities. ‘Exports can grow by more than 20 percent in 2018 provided that government reduces energy prices reasonably with the consent of stakeholders,’ a business leader said. Keeping in view the liquidity position the government may be left with no choice but to cut its non development and administrative expenditures to reduce fiscal deficit. The debt servicing is also a major non development expenditure that is hampering the economic growth badly.

It may be mentioned here that the economy of Pakistan is the 25th largest in the world as far as purchasing power parity (PPP), and 38th largest concerning nominal gross domestic product. Pakistan has a population of over 200 million (the world’s 6th-largest), giving it a nominal GDP per capita of $1,550, which ranks 132nd in the world.

However, Pakistan’s undocumented economy, according to a rough calculation is estimated to be 36 percent of its overall economy, which is not taken into consideration when calculating per capita income. Pakistan is a developing country and is one of the Next Eleven, the eleven countries that, along with the BRICS, have a potential to become one of the world’s large economies in the 21st century. There is no doubt that Pakistan is a land of opportunities but the sad fact is that it has never been tapped sincerely and honestly.

For instance Reko Diq Mine, famous for its vast Gold and Copper Reserves and believed to have the world’s 5th largest gold deposit, remained untapped just because of reason best known to the authorities. The project was supposed to bring over $5 billion of FDI in the most impoverished province of Pakistan and now, instead it is potentially poised to take away billions of dollars in damages! How did we come to this? Time has come for our financial gurus and planning experts to come out with a convincing answer to such burning questions.

AYAZ UMAR,

Kech, August 26.