Downturn of economy

Downturn of economy

The irrational energy input pricing, extremely tight monetary policy and excessive borrowing of the incumbent govern have accelerated the downturn of the economy which may be then heading toward economic melt down if corrective measures are not taken. The report released by Pakistan Bureau of Statistics indicates that production in large scale manufacturing has contracted by 3.64 percent, which is unprecedented in the past 10 years. The productivity situation of medium scale enterprises is also far from enviable and only small scale manufacturing has registered satisfactory growth. Agriculture sector has shown less than 1 percent growth.

Highly restrictive monetary policy of 13.25 percent interest rate and sky-high energy input prices are the major causes of snowballing the slow down in all major sectors of the economy. Amazingly, PTI leadership does scatting criticism of the previous government for shady LNG import agreement with Qatar and floating LNG terminal rent agreement with Engro Company but on the other the decisions of the present government provide justifying ground for those deals. Production of cheap gas supply from two major fields of Sui in Baluchistan and Nashpa in Khyber Puktunkhwa has been stopped and production from Qadirabad gas field from Sindh has been slashed by 50 percent to make room for the supply of highly expensive LNG in the supply system for further fleecing different categories of consumers. Who made this decision which will hit hard the already slowed down economy? Is it the work of Nadeem Babar Advisor on Petroleum? Does somebody is keen to make the gas sector a sinking ship like the power sector? In all a massive shut down of over 327 million Cubic feet per day (MMCFD) has been enforced to create capacity for highly expensive LNG of 690 mmcfd in distribution network. Why was the negative impact of this decision not evaluated before it was implemented?

No doubt that the present government inherited an economy at the verge of bankruptcy from the previous PML-N government but it is also undeniable that during the past one year no serious efforts have been made for its turn around and the disastrous policies of the previous government are still religiously pursued. The excessive borrowing has increased the public debt to 71 percent of gross domestic product, which is 11 percent higher than the sustainable limit. The restrictive import policy and appreciable increase in home remittance have reduced the current account deficit by 30 percent to $12.5 billion but exports have remained stagnant. The high pricing of energy inputs to reward the vested interest at the cost of national interest will further depress the productive capacity of the economy, impacting the exports potential. It is time that the performance of unelected army of advisors is closely monitored and appropriate measures are taken for the turnaround of the economy.

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