Economy Cannot Function at Current Dollar Rate; Inflation Reduction Due to Demand-Supply Gap: Pakistan Business Forum
GDP Growth Cannot Exceed 4%; Government Must Start Saving: Ahmad Jawad
Islamabad ( Web News)
Chief Organizer and Vice President of Pakistan Business Forum, Chaudhry Ahmad Jawad, has stated that the economy cannot function at the current dollar rate, no matter what measures are taken. He added that the reduction in inflation is due to the demand-supply gap. Speaking to journalists, he said that we need to understand why the country’s growth cannot exceed a 4% trend and why we have to restart from scratch. Over the past two years, the price of electricity has increased by an average of 20 rupees per unit, and after the inclusion of the Diamer-Bhasha system, the price will rise by an additional 5 rupees per unit. He mentioned that solving the issue with IPPs (Independent Power Producers) will not resolve the entire problem because the cost of new power plants will still have to be borne by Pakistanis on a per-unit basis.
Ahmad Jawad once again called for an economic emergency as the country faces severe economic challenges with a significant decline in the value of the rupee against the dollar. He suggested that Prime Minister Shehbaz Sharif immediately activate the National Economic Council (NEC) on the lines of the National Command and Operation Center (NCOC) and include all political parties, including PTI, in it. Furthermore, the Chief of Armed Forces should also be part of this process so that emergency decisions can be made regarding Pakistan’s economy.
He stated that the country’s dependence on foreign and domestic loans and bailouts has trapped Pakistan in a classic debt cycle, where additional loans are taken to pay off old debts. This has left the country dependent on IMF tranches from one installment to the next. Since August 2018, the depreciation of the rupee has been the most significant in Pakistan’s 76-year history, with the rupee falling by 156 rupees against the dollar. No other country has seen such a sharp decline. He said that the intensity of the crisis has not been taken seriously.
He further mentioned that they have made it clear to the government that the industry cannot function unless energy prices are reduced. He emphasized the need for liberalization, privatization, and globalization. He welcomed the government’s Udaan Pakistan program, but exports can only increase if the rupee strengthens and there is a significant reduction in electricity unit prices. At the current dollar rate, nothing can be achieved. He also urged the government to adopt a savings habit so that Pakistan can invest in the global economy through government-to-government partnerships.