The economy of Pakistan has gone through several ups and downs in the history and the current situation still does not give a pleasant picture. Pakistan is one of the developing countries and one can depict from it that the country will be facing issues like poverty, inflation, unemployment and low literacy rates. Currently, the devaluation of Pakistani rupee and the issue of debt are among the sizzling topics related to the economy.
The economy is experiencing a devaluation of the rupee since December 2017. The value per US dollar was 105 and an abrupt rise was noted, reaching 119.8, in June 2018. Further, Currency devaluation has suspected that the country might need support from the IMF to maintain its consumption which means Pakistan’s external debt is expected to rise in future making situations, maybe, worse. The uncompetitive exports in the international market increased the real exchange rate that was appreciated by 28% without any improvement in the trade deficit and we ended up subsidizing our imports. The failing fiscal and monetary policy implementations in Pakistan are leading to bleak future. Moreover, our foreign exchange reserves are also crumbling. Pakistan’s current-account deficit has become so extensive and foreign debt repayments are also growing. Issues like electricity and gas shortage, unemployment and poverty are also part of the list.
The current government is also admitting that they are facing these alarming economic challenges while blaming previous governments for such situations.