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Economic Challenges of Pakistan CSS

Some of the major economic challenges that Pakistan is facing today are given below.

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Low Rate Of Saving – We as a nation consume more and save less. Whereas people in developed countries saves 27 percent of their monthly income, people in Pakistan hardly saves only 14 percent.

Low Per Capita Income – Per capita income means average income earned by every person of a country in a given period of time, say a year. According to World Bank report, per capita income of Pakistan in 2020 was 1188.86 rupees.

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Impediments in Doing Business – The cost of doing business in Pakistan is very high. Though PTI government in the country has made much progress in this regard but still businessmen face many hurdles. As per World Bank’s latest rankings on ease of doing business for the year 2020, Pakistan has improved its position by 28 points from 136 to 108, which is unprecedented.

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Trade Deficit – We import more than export. According to data released by the Pakistan Bureau of Statistics (PBS) on Monday (April 4, 2022), the trade deficit in July-March 2021-22 increased to $35.4 billion. It was $14.6 billion, or over 70%, more than the same period of previous year.

Fiscal Deficit – Government spends more than it earned as a revenue over an year.  Pakistan’s trade deficit has widened by 82.2 per cent during the first eight months (July-February) of the current fiscal year 2021-22, ARY News reported on March 2, 2022.

Energy Shortfall – Our industry is at a disadvantage that they get the orders from foreign countries but they cannot execute the orders because there are electricity outages.

Share in World Trade – Our share in the world trade is very low. Pakistan is stuck with only a few commodities – textiles, leather, rice, sports, goods and the surgical goods. We have not entered the markets for more dynamic products. All our exports are to a few markets – the USA, EU and the Middle East.

Governance Crises – Uncertainty and unpredictability due to lack of continuity and political instability and problems of law and order.

• Other factors may include;
• High unemployment rate
• Increasing income inequality in society
• Poverty
• Low productivity due to poor human capital development  

Recommendations For Economic Challenges Of Pakistan

• Increase rate of saving
• Overcome trade and fiscal deficit
• Increase prospects of doing business in the country
• Build human capital