PML-N gets pat on the back for ‘economic turnaround’

• Bloomberg, Forbes, Economist, Moodys, Standard and Poors laud Sharif govt for performing well under pressure

In a recent report, Bloomberg has lauded the Nawaz Sharif’s government for successfully turning the Pakistan’s economy around by controlling fiscal deficit, increasing energy supplies and improving law and order situation.

According to the report, the Pakistan Muslim League-Nawaz (PML-N) government took charge of the country in a highly unfavorable situation, composing of energy and economic crises, and managed to put it on the path of progress. The report added that the civilian government faced challenges on the political and security fronts yet was able to improve income and decrease budget deficit.

The government managed to bring the country’s economy on an upward trajectory despite the hurdles created during sit-ins. Some of the initiatives certainly retarded due to dharnas but overall, the economic revival continued.

The report said that increase in foreign remittances and expansion in consumer spending led to the economic turnaround. Corporate income has increased while stock exchange has also touched new heights. However, the report suggests strong tax reforms for sustainable growth in future. These reforms have already been put in place and regular meetings with the stakeholders have been held.

One of Bloomberg reporters said that Pakistan has the potential to be a global turnaround story. He spent some time in the country listening to a wide range of perspectives and he was convinced that US policymakers and business leaders need to look at Pakistan beyond the security lens.

Moreover, according to Forbes, Pakistan today glosses over the progress on security front, increased political stability and incremental progress on the economic front. At the same time, macroeconomic and structural reforms over the last couple of years have narrowed the budget deficit and raised GDP growth to a stable 4.5 percent despite large energy deficits, and have built foreign reserves up to over $ 17 billion.

Low oil prices and the $ 14 billion in annual remittances the country receives from its 6 million-strong diaspora have also helped. There has been substantial progress in reducing poverty, which has fallen significantly.

Furthermore, in May, Standard and Poors upgraded Pakistan’s credit rating from stable to positive. Moodys, another credible rating agency, also upgraded Pakistan’s credit rating. “The positive outlook reflects our expectations of Pakistan’s improved economic growth prospects, fiscal and external performance, and the supportive relationship of external donors over the next 12 months,” the rating agencies said.

The Wall Street Journal mentions that Pakistan’s economy has improved– thanks to the prudent monetary and fiscal policies, strong capital inflows, robust remittances from abroad and low oil prices, as stated by the IMF. “The authorities have made progress with consolidating macroeconomic stability, strengthening public finances and rebuilding foreign exchange buffers,” IMF Middle East and Central Asia Department Director Masood Ahmed said in a statement following his visit to Islamabad. As a result, economic growth is strengthening and inflation is slowing, he added.

According to the Economist, the IMF reckons that the economy will grow by 4.7 per cent next year, the fastest rate in eight years. Consumer prices rose by 2.5 per cent in the year to March, the smallest increase for more than a decade. Some indicators are pointing to an upturn in spending.