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.
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.
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