New Year, more traumatic
PEW paints gloomy picture of 2012
Economic reforms to remain a far cry
No plans to put economy back on track
Islamabad: [Jan 01]
The Pakistan Economy Watch (PEW) on Sunday said the New Year will bring more pains to the dejected masses.
There are slim chances of economic recovery in 2012 as government will continue to divert all energies to the on-going political struggle, it said.
The rulers are just interested in securing themselves and gaining political mileage; they lack will to take concrete policy actions, said Dr. Murtaza Mughal, President of the PEW.
He said that short-sighted decisions and mismanagement proves that economic revival is something that is yet to attract leadership or opposition.
Dr. Murtaza Mughal said that PEW expects 3-4 per cent fall in GDP, lower agricultural growth by 7-8 per cent, inflation beyond manageable limits, futile attempts by SBP to contain rising prices and printing of currency, enhanced current account deficit, and dwindling foreign inflows.
International lenders may not change their attitude which will keep local currency and reserves under pressure while dollar may climb, he added.
He said that Government will continue to keep tax-to-GDP ratio in single digit to please landed nobility and avoid reforms in public sector enterprises to please party workers which will inflict a loss of around Rs 400 billion.
It will be difficult to meet revenue target of Rs1,952 billion as government will continue to compromise due to the elections which can widen the fiscal deficit to 7 per cent, he said adding that domestic debt will touch Rs 1.5 trillion mark by the end of this fiscal.
The textile, automobile, cement, pharma and fertilizer sectors will feel the heat while food insecurity and reduced allocations in the PSDP will be additional factors haunting masses, he said.
The prices of fuel, electricity, vegetables and all edibles will go up while sugar prices may remain averagely stable.
Dr. Murtaza Mughal said that energy crisis; Rs 400 billion circular debt and deteriorating environment will continue to contribute to reduced business activities, compounded uncertainty and missed growth targets in the 2012.
Masses should not expect any improvement in 2012 as it will remain a tough year for majority who will face more jolts.
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Dr. Murtaza Mughal
Cell: 0321-5157671
President Pakistan Economy Watch
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