Pakistan’s economy nosedives, inflation at 19.2 percent

July 8th, 2008 - 1:38 pm ICT by IANS  

Islamabad, July 8 (IANS) Pakistan’s economy has been in free-fall mode in the first 100 days of the new coalition government, with inflation at 19.2 percent, forex reserves plunging by $2.1 billion and the rupee depreciating by Rs.8.3 against the US dollar. Public debt during this period has swelled by Rs.373.5 billion or by Rs.3.70 billion per day, The News reported Tuesday, saying “these shocking disclosures based on hard facts were gathered after deep investigation”.

Pakistan’s external debt stood at $45 billion as on March 31, 2008, but the rupee depreciated by 11.7 percent during the March 31-July 7 period, translating into a massive increase in the public debt by Rs.373.5 billion.

Quoting a top official of the finance ministry, The News said every rupee the Pakistani currency depreciated increased the public debt by Rs.45 billion.

Market capitalisation had massively deteriorated by Rs.933 billion from Rs.4,623 billion on March 31, 2008 to Rs.3,690 billion now.

The stock exchange went down by 3,248 points or 21.5 percent, from 15,126 on March 31, to 11,878 on July 7 “just because of the non-availability of required political stability which guarantees economic activities in the country”, The News said.

Inflation has also “massively increased” up to 19.7 percent from 14.1 percent before the installation of the coalition government, it added.

“The fast deteriorating economic indicators show that the economy is not on the radar screen of the government. This is quite evident from the fact that there is no resolve in the corridors of power to provide stable, cohesive political environment to handle the current economic challenges the country is facing,” the newspaper said.

“Furthermore, there is total lack of desire from political leadership of coalition parties enjoying power in the country to face the challenges,” it added.

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