Indicators of Pakistan Economy are grim

Bismah Mirza

The indicators of Pakistan’s Economy shows that it is in great crisis.

1. Inflation rate has been rising 20% every year. More inflation is round the corner.
2. The common men’s purchasing power has been reduced as the income is not increasing at the same level. Thus its effect on the market is very severe.
3. The petrol prices is increasing on fortnightly basis
4. The electricity price has risen to unbearable level for the common man Pakistan has access to some of the cheapest hydropower and solar resources. However, using these will require investment which will only come if long-standing issues in the distribution and transmission systems are addressed, mainly through more private participation. This is the assessment of Foreign and local experts.
5. Hence, it seems like Pakistan is in dire need of energy: crude oil and gas to power its industries and generate more electricity. Its exports have gone down as Industrial production has shrined 13% last year due to the increase of electricity and gas prices. According to recent surveys, the Large Scale Manufacturing Index (LSM) in March 2024 remains lower than its peak of March 2022, suggesting that over the last two years, manufacturing has remained well below earlier peaks and even below optimal levels.

         The auto sector also saw a 30% slump in 2023 as the production of almost all kinds of vehicles decreased, except for buses and diesel engines. In another setback for electricity consumers already facing financial difficulties, the Central Power Purchasing Agency (CPPA) of Pakistan proposed a significant increase of Rs7.13 per unit in fuel charges for the February billing cycle, reflecting electricity consumption in January.

         This increase can be attributed to the rise in domestic coal and gas prices, despite the fact that imported fuel prices such as furnace oil and LNG were lower in January, while the exchange rate remained stable.

6. Pakistan has two choices other than Saudi Arabia, Qatar and UAE:
7. a) Obtaining oil and gas from Russia. The problem to get oil from Russia is that Pakistan do not have the refinery for Russian Crude oil. Russia supplies from Indian refinery. India put its markup and send to Masqat for another markup to increase the price of the Russian oil.

         Further, Indian media boasts that India is supplying oil to Pakistan with greater mark up and Oman’s markup also added to increase price just equal Saudi oil. The concession or less price jacket has been stolen by India. If Russia is interested to favor Pakistan, it has to establish a refinery in Pakistan or persuade India and Oman to provide oil without the mark ups.

1. b) Iran is another source of oil supply which can solve Pakistan’s problem but Pakistan will face sanctions if it gets oil from Iran. Pakistan has to work out some sort of solution.
2. In the food area, the production wheat and rise rice fell 12%
3. The price hike in the international market has a negative effect on Pakistan’s economy. Now the rise in international commodity prices will have a negative impact on Pakistan’s economy, given its high dependence on imports of crude oil and palm oil and constrained foreign currency reserves. Any increase in commodity prices over the next few months can trigger inflation, leading to a serious spiral of price increases for the masses.
4. The ruling class of Pakistan is indifferent to the problems of the Pakistani people and to address the difficulties that the local manufactures are facing. The rulers and elites of Pakistan are always looking forward for the foreign investment to increase their wealth through commission and through manufacturing and productive activities and thus keeping Pakistan at mercy of foreign countries.
5. The God gifted natural resources are given hands of foreign experts. It is general perception in the country that those are either stolen, wasted or sold at lessor price.
6. Dangerous than that is Pakistan’s real wealth, its youth (skilled and nonskilled) is leaving Pakistan for greener pastures and may become victim of some country’s war and any other activity which they may experience later and repent.

 Due to above reasons the lives of the people of Pakistan has become miserable. The measures to improve Pakistan’s economy have to be taken seriously. The volatile situation has to be addressed in the best interest of the country and the people of Pakistan.

The author is the Executive Editor of Monthly Interaction.