Pakistan's Current Economic Scenario

www.pakpositive.com Pakistan is an agricultural country as 75% of its population relies on agriculture. Remaining 25% are workers, industrialists, government officials etc. In Pakistan agriculture has been given a lot of benefits including tax remittance. So 75% of the population does not pay tax. From remaining 25% majority has monthly income less than applicable to tax payment. So government has very little collection of revenue in order to cater the problems of its population.

Currently government is trying to improve the system of tax collection. As far as local industry�s production is concern, it is struggling due to several reasons. The main reason behind it is current energy crisis in Pakistan. Due to this crisis local products are very expensive. This created a big gap for countries like China who are capable of taking full advantage of this gap. Due to the increase in prices inflation rate is increasing. This results in the form of currency devaluation. One would say that, currency devaluation would result in increase the export and exporter would earn more revenue.

But, there is lack of infrastructure for production.

In international market Pakistan is losing its place. Pakistan�s imports are way much larger than its exports. Pakistan�s all trade is in U.S dollar and, regular currency devaluation is affecting its economy. Pakistan is a big exporter of textile but, due to energy crisis this industry is also going towards decline. Pakistan is also a big exporter of rice. Production of rice is looking in danger in near future due to the effects of building new dams which are illegal according to �Indus Water Treaty 1960�. These Dams are big threat to Pakistan�s agriculture. This will directly affect the Pakistan�s economy.

There is another threat to its economy that is �terrorism�. It is preventing foreign investors from investing in Pakistan which is slowing down the economy�s growth. This threat is also affecting one more area which is �tourism�. Pakistan has a lot of potential in tourism department but, it is lagging behind due to this threat. This threat is not limited to Pakistan. It has struck its neighboring country Afghanistan. Afghanistan has no infrastructure. There is a lot of development going on in there. This is a very good opportunity for Pakistan�s economy.

International companies are coming and making their regional headquarters in Pakistan to approach Afghanistan as it is an easy and safe way to have access there. This will produce a pace in Pakistan�s economy as these companies are hiring local personnel.

There is another thing which is of significance here that is IMF and World Bank loan. Pakistan has a lot of debt of World Bank and IMF on its account. A big part of budget cuts to pay interests of these loans. This is a big hurdle. Current government is trying to get rid of IMF. But it seems very difficult for it. But still hope is there. economy www.pakpositive.com