In this context, it is extremely disturbing that the Abbasi administration has already surpassed the one billion dollar budgeted reliance on procuring loans from the commercial banking sector abroad, which is at very high rates of interest with a very small amortization period, while programme/budget support loans from multilaterals and bilaterals have already sharply declined after the completion of the International Monetary Fund (IMF) programme last year. The reason: lack of donor comfort level with the government implementing agreed reforms without rigid IMF monitoring. Poor governance continues to be the hallmark in nearly all sectors while increased tax collections are sourced to the imposition of higher taxes rather than on widening the tax net while the energy sector continues to suffer from rising circular debt and transmission losses.
Be that as it may, there have been some indications of an improvement in some sectors and data suggests that in November exports rose by 12.3 percent in comparison to the comparable period of the year before, and industrial growth increased by 8.77 percent in October in comparison to the comparable period of the year before. Improved performance of these two indicators is certainly to be appreciated however it is relevant to note that imports as per the State Bank of Pakistan website rose from 17.730 billion dollars (July-November) 2017 to 21.881 billion dollars in the comparable period of 2018 accounting for a worsening current account deficit. With respect to industrial growth, it is relevant to note that not only was the base low in previous years and hence the rise not a reflection of pre-PML-N levels but that the components of this growth have shifted from textiles and other value added products to sugar whose surplus could only be exported by allocating a subsidy.
Equally, disturbing is the fact that foreign direct investment July-November 2018 declined to 1000.2 million dollars from the 1774.9 million dollars in the comparable period of the year before, as per the SBP website, in spite of the start of the implementation of the China Pakistan Economic Corridor (CPEC) projects. If around a billion dollars is Pakistan's absorption capacity for these projects then the 46 billion dollar plus CPEC would take a long time to be completed.
The government is also claiming a growth rate that matches the projected growth rate in the budget - a figure that has been challenged repeatedly by Business Recorder as well as independent economists due to the sustained failure of the Pakistan Bureau of Statistics to rationalize data that is released by not only other government agencies/departments but also by credible industry sources.
Ground realities show that there are serious issues with the economy and while not acknowledging it publicly is understandable, as any statement of concern may well further erode public confidence with a negative impact on key variables, yet there is an urgent need to change policies dramatically from the Dar years. That unfortunately does not appear to be the case.