Concrete steps demanded to protect masses, economy: PEW
Pakistan’s debt rating downgrade necessitates urgent steps
The Pakistan Economy Watch (PEW) on Saturday asked the government to take concrete steps to protect the vulnerable masses from inflation and shield the limping economy facing extreme pressure.
Abrupt devaluations have filled the masses and the business community with bewilderment while the investment and expansion plans have been put on hold, it said.
Pakistan’s long-term debt rating has been downgraded by a global rating agency due to repayment obligations, low foreign exchange reserves, and fragile fiscal situation which should be considered a tip of the iceberg, said Dr. Murtaza Mughal, President of PEW.
He said that the government claims that the exchange rate has now reached near to equilibrium and is reflective of the market conditions while independent experts continue to question the assertion.
The exchange rates generally move on demand and supply in the market and the key reason behind the recent devaluation was the last fiscal year’s $19 billion current account deficit which is natural but the central bank should protect the rupee-dollar parity, he added.
Dr. Murtaza Mughal said that the forex reserves are not enough, therefore, the government should finalize talks with IMF without any delay otherwise rupee will come under more pressure.
He noted that remittances were able to support a trade gap of $36 billion by almost 18 billion dollars which were insufficient therefore a major foreign exchange support has become imperative.
He said that imports have dropped while exports have risen by 4 percent but it has failed to ensure stabilization and growth resulting in the freefall of rupee.
The government should take steps to contain rising prices, stop the flight of capital and discourage the flow of undervalued imports which are damaging the fragile economy, he demanded.
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