ISLAMABAD: A bright future with a positive outlook seemingly appearing the horizon of the national investment front. This upbeat outlook has been endorsed from the IMF, WB and ADB. A nascent recovery is seen by all.
Interest Rates were beyond 20%, so were the mark up and investment costs, dollar availability was at its lowest with the rate increasing day by day, fiscal space were almost negligible even hard to breath economically. After Covid, economy could not pick up and economic fundamentals were at its lowest.
Now things are seemingly turning the corner. Despite that Pakistan has confronted tough economic challenges during last few years, now the economic trajectory is moving upward, showing many positive economic indicators.
Forex reserves have dipped to the lowest, despite rising demand of greenback. Pakistan’s foreign exchange reserves have gained a substantial growth during last 3 months and reached to $7.7 billion.
The success of digital financial initiatives has demonstrated by $6.75 billion peak in outward remittances made through the Roshan Digital Account in Oct 2023. The nation attracts noteworthy foreign investment, totaling $126.3 million, prominently underscored by recent investments from China.
Confidence of investors and overseas Pakistanis has been upbeat. They are contributing, saving and investing locally with their graceful contributions.
In October 2023, bank deposits increased to a record high of Rs.26.23 trillion. This was an unprecedented peak in a month. Acknowledging Pakistan’s improved economic conditions, the IMF also extends substantial support with the approval of the loan.
Election years always bring tough news for economy, even then Pakistan is transiting from one government to another, despite that its economic indicators are turning positive.
The IMF, in its World Economic Outlook report, foresees promising economic progress for Pakistan, projecting a 2.5% GDP growth rate in 2024. The stock exchange achieved remarkable milestones, surpassing 58,000 points in Nov 2023, reflecting a bullish market trend and robust investor confidence.
This growth seemingly modest but indicating towards a quick recovery in coming years and could rebound quickly in next 2-3 years to over 5%.
Climatical disasters were also at its peak when the economic indicators were at their lowest. Pakistan had been importing wheat and edible items for over $ 1 billion annually despite being an agriculture economy.
Now, Pakistan has witnessed a significant upswing in agricultural production in the year 2023, registering an overall increase of 73%. Notably, cotton production experienced an extraordinary increase of 126.6%. Following a resolute crackdown against electricity theft, the govt successfully recovered 46 billion rupees.
There had been some positive signs at the IT and software side too. The IT sector sees a noteworthy 3.3% increase in exports, enhancing Pakistan’s standing in the global tech market. Furthermore, China and Pakistan have also expended the bilateral cooperation in trade, communication, transport, food security, media, urban development, capacity building, climate change, and vaccine development.
Due to various factors industrial capacity was lying vacant, which would now be employed and would give rise to increased production quickly helping to leg up the industrial production and ultimately enhancing growth pattern.
Despite the new five expensive car plants were inaugurated in last few years and all were running smoothly rather touching their total capacity levels within days. New-tech industrial units are bringing expansion and new investments are turning things positive.
A good back up from governance and administrative set up has also encouraged the investors local and foreign. Chinese, Saudi Arabia and UAE investors have given green signals to IMF and other donors, who will support in case, investment from these nations will flow. This will fill the balance of payment gap easily, as per IMF and Pakistan official talks ended last week.
A streamlined system will reduce opportunities for corruption and informal practices often reported in the media. Simplifying documentation requirements is time saving and cost- effective and contribute immensely to overall economic efficiency and productivity.
Well-regulated border system is in alignment with global trends & likely to position both Pakistan and Afghanistan for greater integration into the global economy. Having regulated systems in place allows for swift and coordinated responses during crises including natural disasters or public health emergencies benefiting both countries.
