WITH the real economy in a deep slump and macroeconomic indicators stable, how should we describe the current state of the economy and the direction in which we are heading?

According to the just released Pakistan Economic Survey 2024-25, whatever spin you may want to give it, the economy is in a deep downturn given the collapse of the crop sector and the drastic decline in incomes in rural areas, where almost 60 per cent of the population lives and where extreme poverty is concentrated.

Severe decline in rural incomes and little success in increasing exports have led to poor growth in manufacturing. A combination of the two has slowed down the services sector, which now makes up nearly 60pc of our GDP.

The resulting overall economic growth is dismal at around 2.5pc, while we need a minimum growth of at least 6.5pc to absorb the increase in the labour force and reduce the prevalent high levels of poverty, which, according to a recent World Bank report, has risen dramatically, post-Covid, to near 50pc.

At the same time, there is no denying the fact that the economy has stabilised. There is no threat of default given our current reserves, a stable exchange........

© Dawn