Stabilization to Growth - IMF's bailout changing

PTI starts preparing for elections. Don't lose sight on structural reforms.

TI has been under tremendous political pressure snowballing from delayed entry into IMF, Hafeez's austerity, Baqar's tightening, followed by rampant inflation, no significant export growth, covid-19's impact, food crises & tariffs hike.

Such economic pressures perhaps led PM to reconsider Hafeez's economic austerity plan - which envisaged "long term" actions of debt deleveraging. However, political parties has voters to respond to & lawmakers to hand cherries for their constituents. Especially when there are rifts within the senior ranks of the party. Thus, the growth mode.

Fund vs Government Projection (Change):

Growth: 4% vs 4.2% (Rs 100b)

Fiscal Deficit: 5.5% vs 6% (Rs 260b)

Primary Balance: Rs+143b vs Rs -49b (Rs 192b)

Tax collection: Rs 8.8t vs Rs 8t (Rs 800b)

PSDP: Rs 627b vs Rs 800b (Rs 173b)

Public debt: +1 GDP higher

In other words, policy makers are prioritizing growth & delaying reforms. Complacency might kick in for tax-widening & export growth. Similarly, no tangible plan is there to reduce Circular Debt instead of increasing prices.

Economy is shifting gears. There is a lot that needs to be done and hasn’t been done. Education, tax culture, start-up, industrialization, export widening, power sector efficiencies, gas deficiency, new technology companies, Pakistan’s unicorns?, end to corruption, increasing GDP/capita and importantly, creating jobs for all. Govt is readying for electioneering. That's fine. Don't forget the long term picture.