The recent collapse of the Pakistan Stock Exchange (PSX) has signalled the market’s rising anxiety about deteriorating economic fundamentals as a result of the incumbent government’s inaction on several economic issues. The most recent drop is the result of a combination of reasons, including worsening fiscal conditions, growing external sector challenges and political instability. The failure of the new coalition administration to come up with a viable strategy to rebuild the economy is the most important factor. For example, there is still apprehension about making a firm decision on ending unsustainable energy subsidies.
Imran Khan’s call for a long march has also limited the new government’s ability to take big economic steps in order to prevent blowback. The bottom line is that the people of Pakistan are paying the price of this political turmoil.
Muhammad Qasim Qaiser
Gujranwala
