Economic Challenges Facing Pakistan...ppt

Economic Challenges Facing Pakistan

1. Presented by: Mahrokh Fazal Presented To : Mam Mehwish Boota COURSE : Pakistan Economy Title: Economic Challenges Facing Pakistan

2. Introduction Pakistan’s economy faces numerous challenges that hinder its growth and development. This presentation highlights six key economic issues affecting Pakistan.

3. Fiscal Deficit Pakistan’s fiscal deficit stands at around 8-9% of GDP.
High government spending and low tax revenues contribute to this deficit. LImpact : High inflation: Excessive government spending leads to inflation, reducing the purchasing power of citizens. Debt burden: The government borrows heavily to finance its spending, leading to a significant debt burden. Reduced government spending on essential services: The fiscal deficit limits the government’s ability to invest in essential services like healthcare, education, and infrastructure.

4. Trade Deficit Pakistan’s trade deficit is approximately $30 billion.
Imports exceed exports, leading to a significant trade gap. Impact : Depletion of foreign exchange reserves: The trade deficit leads to a depletion of foreign exchange reserves, making it difficult for Pakistan to import essential goods and services. Reduced economic growth: The trade deficit reduces economic growth, as the country is not earning enough foreign exchange to invest in productive sectors. Increased debt: The trade deficit leads to increased borrowing, adding to Pakistan’s debt burden.

5. Energy Crises Pakistan faces a severe energy shortage, with a deficit of around 5,000 MW. Impact : Frequent power outages: The energy shortage leads to frequent power outages, affecting industries, businesses, and households. Reduced industrial productivity: The energy shortage reduces industrial productivity, leading to reduced economic growth and exports. Increased costs: The energy shortage leads to increased costs for industries and households, reducing competitiveness and increasing poverty.

6. Inflation Pakistan’s inflation rate is around 12-15%.
High food and energy prices contribute to inflation. Impact: Reduced purchasing power: Inflation reduces the purchasing power of citizens, affecting their standard of living. Increased poverty: Inflation increases poverty, as the poor are disproportionately affected by price increases. Decreased economic growth: Inflation reduces economic growth, as high prices reduce demand and investment.

7. Low Tax Revenue Pakistan’s tax-to-GDP ratio is approximately 11%.
Low tax revenues limit the government’s ability to invest in essential services. Impact: Reduced government spending: Low tax revenues reduce government spending on essential services like healthcare, education, and infrastructure. Increased fiscal deficit: Low tax revenues lead to increased borrowing, adding to Pakistan’s debt burden. Decreased economic growth: Low tax revenues reduce economic growth, as the government is not able to invest in productive sectors.

8. Corruption Corruption is a significant obstacle to economic growth in Pakistan. Impact: Reduced foreign investment: Corruption discourages foreign investment, reducing economic growth and development. Increased poverty: Corruption increases poverty, as the poor are disproportionately affected by corruption. Decreased economic efficiency: Corruption reduces economic efficiency, as resources are wasted on corrupt activities rather than productive sectors.

9. Conclusion Addressing these economic issues is crucial for Pakistan’s growth and development.
Policy reforms, increased investment in essential services, and anti-corruption measures can help overcome these challenges and put Pakistan on a path to sustainable economic growth.