The country is heading towards stagflation with economic growth projected at 2.4 percent and inflation at 13 percent, which would result in unemployment and a rise in poverty levels. This was the consensus of independent economists while talking to Business Recorder.
Dr Ashfaque Hasan Khan, former Economic Advisor and at present Dean NUST University, told BR that whenever the country goes on an IMF programme growth slows down. "As per the projection, economic growth will slow down while inflation would rise and one can say that the country is moving towards stagflation," Khan said.
He further said that stagflation, a combination of hyperinflation and economic stagnation, leads to lower production and increase in unemployment, particularly among the youth which directly leads to higher poverty in the country.
Advisor to Punjab Chief Minister on Finance Dr Salman Shah told Business Recorder that when economic growth slows down, income declines making it increasingly difficult to meet the inflationary burden.
He said that the government is supporting an economic reform agenda and the public would have to face additional burden in the form of high electricity tariff and taxes. The government is facing Rs 1.5 trillion circular debt and to meet this challenge a reform agenda is under process which would result in some additional prices, he added.
Dr Shah further said that although there would be difficulties in the short term during the reform agenda implementation period, yet in the long run it results in economic growth, investment and job opportunities.
The Advisor pointed out that there has been a decline in the current account deficit, remittances have increased, exports have increased in quantity terms, imports have declined, while tax amnesty scheme was a success which means the country is moving towards stabilization. However, Dr Shah admitted that investment has yet to witness an improvement.