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Stabilizing Pakistan’s Economy: Reforms, Challenges, and Opportunities

43 0
09.01.2025

When it comes to Pakistan’s economy, several challenges hinder its stabilization. These challenges range from minor to major issues, including poverty, unemployment, lack of awareness and support for entrepreneurship, corruption, failure to implement economic reforms, fiscal and trade deficits, technological advancement, energy shortages, foreign debts, and limited industrial and agricultural production and services. While the list of challenges continues, even when improvements are made in some sectors, others lag. This raises the persistent question: Will Pakistan ever be able to improve its economy, or will it continue to struggle to survive on external support?

IMF bailouts: Roads to Stability or Recipes for Disaster?

In 2024, the economy showed improvement, primarily due to a $7 billion loan from the International Monetary Fund (IMF). According to statistics, Pakistan’s Gross Domestic Product (GDP) increased by $37.1 billion. A bullish trend was observed in the Pakistan Stock Exchange due to a rise in KSE-100 stock values. This growth was further fueled by financial support and foreign reserves from both bilateral and multilateral loans. According to a report by the State Bank of Pakistan, foreign investment inflows totaled approximately $377 billion, with contributions from countries such as Saudi Arabia, the UAE, China, the US, the UK, and others.

These investments spanned various sectors, including agriculture, energy, financial businesses, tourism, chemicals, construction industries, and mining, with the Special Investment Facilitation Council (SIFC) playing a key role in stabilizing the economy. The State Bank of Pakistan also lowered the annual interest rate from 15% to 13% to boost the economy, encourage businesses and exports, and reduce inflation.........

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