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Tuesday December 06, 2022

Daronomics: 2013-2017

In 2015, two years after Ishaq Dar took over, the rate of inflation had nosedived to 2.5 percent

September 29, 2022
Federal Finance Minister Ishaq Dar. -APP/File
Federal Finance Minister Ishaq Dar. -APP/File

Inflation

As per recent public opinion surveys “84 percent Pakistanis consider inflation the biggest problem”. As per Pakistan Bureau of Statistics (PBS) the Consumer Price Index (CPI) “increased by 27.3 percent on a year-on-year basis in August 2022.” Lo and behold, the rate of inflation in Pakistan is at a historical high.

In 2013, Ishaq Dar took over as Finance Minister. In 2012, a year before Ishaq Dar took over as Finance Minister, the rate of inflation stood at 9.7 percent. In 2015, two years after Ishaq Dar took over, the rate of inflation had nosedived to 2.5 percent

Per capita income

In 2013, Ishaq Dar took over as Finance Minister. In 2013, Pakistan’s GDP per capita stood at $1,208 (as per The World Bank). For the following four years, GDP per capita grew every single year and hit a high of $1,631 by 2017. For the record, between 2013 and 2017, GDP per capita grew by a wholesome 35 percent.

Foreign direct investment (FDI)

In 2013, the year that Ishaq Dar took over as Finance Minister, foreign direct investment (net inflows) stood at $1.33 billion. The following year foreign direct investment went up to $1.89 billion, dropped to $1.67 in 2015 and then shot up to $2.58 billion in 2016. In 2017, Pakistan received an additional $2.5 billion.

GDP growth

In 2012, a year before Ishaq Dar took over as Finance Minister, our GDP growth stood at 3.5 percent. In 2016, three years after Ishaq Dar took over, our GDP grew by a healthy 5.5 percent. Over the 2013 to 2017 period, our GDP grew at an average of 4.7 percent. For the record, in 2020, for the first time in half a century, our GDP actually contracted by 1.3 percent.

Lending rate of interest

In 2012, a year before Ishaq Dar took over as Finance Minister, the lending rate of interest was at 13.5 percent. In 2013, the year that Ishaq Dar took over as Finance Minister, the lending rate of interest had dropped to 12 percent. Lo and behold, in 2017, four years after Ishaq Dar took over, the lending rate of interest had dropped to a low of 8.2 percent. Low interest rates stimulate economic activity. Low interest rates stimulate industrial activity. Low interest rates mean job growth.

Current account balance

In 2013, the year Ishaq Dar took over as Finance Minister, our current account balance was at negative $4.4 billion. Good Lord, by 2017 our current account balance had worsened to a negative $16 billion. A negative current account deficit indicates that a country is importing a lot more than it is exporting. This is an indication of an unbalanced economy. This is an indication of an uncompetitive economy. This always means risk of currency depreciation. This is what forces us to the IMF.

This is 2022. What worked in 2016 may or may not work now. In 2016, SBP had reserves of $19 billion as opposed to $8.3 billion today. The Reserve Bank of India has already lost $100 billion-of its $650 billion reserves-defending the Indian rupee.

Comments

    Khurshid Anwar commented 2 months ago

    Let us assume that he was a very honest and competent person. The question is that why he didn't try to fight his case and fled to London. Is it the way for a great man to behave in a crisis?

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      naveed ahmad bajwa commented 2 months ago

      Let's see you getting caught after a mil takeover like NS was convicted of high jacking.....

      Umair commented 2 months ago

      Fudged facts and forged cases aren't meant to defend. If u closely study cases against him u will find out why he fled away

      Mueez Ur Rehman Syed commented 2 months ago

      This guy is the very reason we are in the mess that we are in. Stabilizing economy artificial and not doing anything to increase exports was criminal neglect

      Muhammad Adeem Akram commented 2 months ago

      He was intelligent enough to escape to uk at the right time otherwise he would have faced same fate as Nawaz Sharif. Corruption is rooted in our society we need to eradicate corruption but it is also wrong to label corrupt without verifiable proofs.

      Abbas commented 2 months ago

      That's because he was not issued a passport by government

      Hassan commented 2 months ago

      If Pakistan has decided to move on with current system then he is he is the best. We should not consider a new puppet to make new experiments with lethargic system.

      very nice reply by you. commented 2 months ago

      very nice reply by you.

      very nice reply by you. commented 2 months ago

      very nice reply by you.

    Aziz Ur Rahman commented 2 months ago

    Ishaq Dar seems to be a financial wizard Let us hope in these troubled times he will Pakistan on to the financial success leading to improved prosperity

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      Imran AKhtar commented 2 months ago

      Are you living in a cardboard box he is the very reason Pakistan is suffering he is no economist but an mere accountant whose father owns a cycle shop and he miserably failed to give justification of his assets while from 2013-2017 his own money increased by 250%

    Saeeda commented 2 months ago

    This last paragraph sums it all up. Extravagant spendings. Hope, economic wizard, had learned his lesson.

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    Wasim akram commented 2 months ago

    Please enlighten us about what Dar sb did with exports. They went from 25 billion dollars to 20 billion.

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    Shahzad Naeem commented 2 months ago

    Havonomics- his previous tenure policies placed Pak in present day day BOP crises.

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