Economy maintains its stability despite grave challenges

Economy maintains its stability despite grave challenges

Islamabad: (Thursday, January 12, 2012) despite grave challenges staring right into the eyes, the economy in Pakistan has managed to stabilize itself. This perhaps is a fact revealed by major economic indicators like foreign exchange
reserves, industrial growth, workers’ remittances and inflation.

More than other indicators, workers’ remittances depicted rather an encouraging trend this year by maintaining their growth at about 20 per cent. According to the stats released by State Bank of Pakistan, the remittances sent by
Pakistani nationals abroad went up from US $ 863 million to US $ 1.085 billion in December alone as compared to the same month the previous year.

It was because of remittances that the rupee could bear and somewhat sustain its position against US dollar and other international currencies. Moreover, the remittances have also significantly contributed towards stabilizing foreign
reserves in the country.

Contrary to the earlier news, which predicted fast depletion of foreign reserves, they stand at US $ 16.77 billion, enough for the country to pay for four to five months imports.

Another sector which, despite severely marred by energy shortage, managed to grow itself by 2.07 percent during July to October last year, was Large Scale Manufacturing (LSM). If the growth in the sector is maintained and increased
over the passage of time, it might play its due role in coping up the huge unemployment rate in the country.

Just like other sectors, the overall exports of the country also witnessed an increase of 3.90 per cent during first half of the current fiscal year; however, this increase was greatly attributed to the sharp increase in Cotton
prices around the world.

Nevertheless, regardless of the reasons which contributed towards the increase in exports, the trade deficit also sustained itself at an alarming rate of 38.48 percent. Now, in order to take stock of the country’s economic situation,
and to work upon the policy for the betterment of the country’s economic situation, the economic managers of the country today held a meeting with Minister for Finance Dr. Hafeez Shaikh and informed him of the crucial steps that were necessary to reverse the
economic damage.

With having elections just around the corner, whether the ministry of finance will allow the economic managers to take politically hard decisions or not is yet to be seen.

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Posted by Fayyaz Yaseen on Jan 12 2012. Filed under Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry