Instability in Pakistan disrupted economic growth, says Finance Minister Akhtar

Islamabad, Nov 24: Pakistan’s caretaker Finance Minister Shamshad Akhtar has said that political instability over the period of time has greatly disrupted the cash-strapped country’s economic growth, which has to be backed by structural reforms. Addressing the Sustainable Development Conference (SDC) here on Thursday, the minister said macroeconomic stability has become more difficult in the last decade because of delays in structural reforms, protracted actions and exogenous shocks. The vulnerability of the economy has increased due to global economic shocks such as the increase in international commodity prices and tighter liquidity conditions, with Pakistan effectively priced out of the international credit markets, the Business Recorder newspaper quoted Akhtar as saying.
“Vulnerability has increased due to the unsustainable debt position… Large fiscal and trade deficits over two decades have weakened the debt position, with the cost of servicing debt rising to 74 per cent of the FBR revenue in FY23,” the minister said.
She added that vulnerability has also increased due to climate shocks. The global warming model predicts that Pakistan’s weather patterns will become even more volatile and extreme in the decades ahead, with an average increase in temperatures by 1.3 per cent to 4.9 per cent by 2090.
“Our fiscal policy is unsustainable not only due to the revenue gaps and unproductive expenditures but it is also unsustainable due to the scale of the climate funding gap,” she said.
The minister said that after months of hard work, Pakistan has successfully reached a staff-level agreement with the International Monetary Fund (IMF) on the first review of the USD 3 billion bailout. (PTI)