KARACHI: We are quickly rushing towards “a broken economy” with a severe financial crisis and mass unemployment. A broken economy is where inflation and interest rates continually move upward, said Ateeq Ur Rehman, economic and financial analyst.
Due to the high cost of borrowing, it is difficult for an ordinary man to add funds to his business or entity for expansion or to create a margin to fight inflation. Microfinancing through banks is unbearable, he said.
Millions of households are struggling to make ends meet and are being crushed due to the Covid pandemic, high energy prices, currency devaluation, rising gas and POL products, etc. It is an endless continuous apathy.
He said locally, to manage the business we borrow persistently. Our external debt is historically high now, reaching nearly $ 122.5 billion, almost an increase of $ 26 billion over the past 3 years. This directly affects the momentum of economic stability and, therefore, brings a dominant effect on an ordinary man, Ateeq said.
In addition, the trade gap is widening day by day with a big difference between imports and exports. We received nearly $ 70 billion for importing commodities such as POL products, coal, industrial raw materials, agricultural products, etc. Considering that exports are less than 25 billion dollars; if not, we can diversify and focus on exports of IT, textiles, medicine, poultry, dairy, seafood, rice, fruit, leather goods, salt, marble, products surgeries, motorcycles, furniture, etc.
He added that hikes in electricity, gas and oil tariffs without addressing the far-reaching consequences will not work. The government must carefully consider the proposals before making its final decision, as this will have a fairly profound impact on the vast majority of the population and not on a limited number of them.
Copyright Business Recorder, 2021