Pakistan’s economy seems to be ‘experiencing a near-death experience’, a daily said on Thursday, urging sensible planning instead of senseless borrowing.
The government says the economy is turning around and President Asif Ali Zardari would have one believe that ‘milk and honey is flowing through the streets’, an editorial in the News International said.
It, however, added that the State Bank of Pakistan in its latest quarterly report says the “Pakistani economy seems to be experiencing a near-death experience”.
“The central bank has warned that risks to macro-economic stability have increased, incessant government borrowing from the central bank is fuelling inflation and in the absence of serious measures in terms of governance, the economy is on the path of a downward spiral, said the daily.
A cursory reading of the report clearly indicates irresponsible government borrowing as being the major source of alarm.
The editorial went on to say that the biggest challenge of all will be financing the current account deficit as both debt and non-debt inflows have declined.
“Add to this that energy shortage will plague production activities, especially in the industrial sector, and the scheduled repayment of IMF loans amounting to $1.1 billion during the second half of FY12 and the Pakistani economy is in royal trouble,” it added.
The daily stressed that the government has only one option: to exercise its limited fiscal options with prudence and extreme caution.
“Senseless borrowing must give way to sensible planning. The burden of fuelling the economy now lies squarely on harnessing and developing domestic resources. Unfortunately, all we’ve seen is a trend of borrowing more, spending more, adding to inflation and adding to despair and there is little indication that things will change.”