Article Type

Article

Description

Pakistan’s economy remained sluggish in 2011 due to domestic political instability, energy shortages, deteriorating Pakistan-US relations, global climate change and internal security concerns.

For the fourth year in a row, GDP growth in 2011-12 will fall below its long-term growth rate. Per capita income will increase by around 2 per cent, in sharp contrast to the 5 per cent annual growth experienced during the 2002-07 period. The investment rate dropped to 13.4 per cent — its lowest level in the last four decades. Fiscal imbalances arising out of subsidies to loss-making public enterprises, low tax-mobilisation efforts, inefficiency and waste in public expenditure resulted in excessive borrowing from the banking system. And when the government decided to terminate its ongoing arrangements with the IMF, the flow of external resources for budgetary support was interrupted. The shortfalls in financing were made up by additional borrowing from the domestic banking system.

Publication Source

East Asia Forum

Publication Date

1-22-2012

Pages

1-3

Download

Share

COinS