KARACHI: The Institute of Cost and Management Accountants of Pakistan (ICMA) has emphasised the importance of supply-side policy measures to achieve long-term sustainable economic prosperity.
While the recent decline in inflation is a positive sign, ICMA warns that it may not be sustainable without targeted policies to address underlying factors causing cost-push inflation.
While the recent 150 basis point reduction in the policy rate is a positive step, ICMA recommends additional rate cuts are necessary to stimulate investment and consumer spending.
Moreover, the investment in primary sector, especially agriculture, can bring down import dependence and provide raw material to across all the sectors in the long run.
Concurrently, the government should focus on broadening the tax base, reforming loss-making public enterprises, and enhancing fiscal consolidation to stabilise public finances. Reducing energy costs by reforming electricity and gas pricing mechanisms will lower cost of doing business.
By implementing these measures, Pakistan can pave the way for a balanced economic recovery, improve business confidence, and enhance overall economic prosperity.
Copyright Business Recorder, 2024
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