Thursday, December 7, 2023

The future of our economy - Part I - The News International

Last updated Thursday, November 24, 2022 22:05 ET

The future of any economy is closely linked with its present and the past. Pakistan’s economic past has gone through different phases with impressive growth and poverty reduction in the 1960s, 1980s, 2000-2007 and 2014-16, and 2020-22.
The immediate precarious situation where both consumer and business confidence are at the lowest ebb, international ratings and market sentiment are negative and foreign exchange constraints are binding, if projected into the future and discounting the past, may result in an extremely dismal outlook.
Should the present assumptions be carried forward as they are? Would these circumstances – both external and internal – prevail in the future too? The present situation, it should be recalled, is a confluence of adverse global economic developments that have accentuated inflation, slowed down growth, escalated prices of energy and food, disrupted supply chains; internal political uncertainty and fierce polarization in society; lack of clarity about the sustenance of the IMF programme as some of the actions taken by the government are deviations from the agreements reached; and the devastating effect of the floods that caused losses of $30 billion or more and submerged a vast area of land. Whether these four factors will continue unabated in the future is simply incredulous.
Logically, any meaningful projection of the future economy would involve scenario analyses in which various alternative scenarios based on differing assumptions are built and...

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