Why Pakistan's economy is sinking
Pakistan's new budget will not fix the country's economic woes. Here is why. 6park.com
by Taha Siddiqui 
28 Jun 2019 6park.com
 6park.com



Pakistan spends between 18 and 23 percent of its state budget on the military [File: AP/Anjum Naveed]
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The Pakistani government unveiled its first annual budget for the fiscal year 2019-2020 on June 11 and was only able to pass it on June 28. The considerable delay was due to strong resistance from the opposition in parliament which threatened with protests over perceived economic mismanagement by the government.
The economic situation in Pakistan today is indeed worrying. This year's Pakistan Economic Survey, a government-issued report that precedes the annual budget presentation, has painted a dismal picture of the domestic economy.
Almost all financial indicators have seen a downward trend. The growth rate fell by almost 50 percent from 6.2 percent to 3.3 percent. It is expected to go down even further to 2.4 percent next year, which will be the country's lowest in the past 10 years. The Pakistani rupee has lost a fifth of its value against the dollar since the beginning of this fiscal year. Inflation is expected to hover around 13 percent over the next 12 months, reaching a 10-year-high as well.
Then there is the issue of the ever-increasing debt, which eats up some 30 percent of the budget every year. Pakistan continues to take out loans to be able to cover repayments of past borrowing. It recently signed yet another deal with the International Monetary Fund (IMF) for a bailout package worth $6bn. 6park.com