The economy is the backbone of any country. The year 2019 proved to be a difficult one for the Pakistani economy as well as the value of the Pakistani rupee. The rupee continued to decrease in the first six months of the year and was seen at the lowest level in history when people bought a dollar for over Rs 164.
Later in July, the rupee depreciated courtesy of the IMF loan agreement, along with the provision of loan installments. Saudi Arabia’s payment of fuel improved the Forex market slightly.
In 2019, Asad Omar resigned from the Finance Ministry after which Abdul Hafeez Shaikh was made Advisor to the Treasury. Similarly, Imran Khan appointed Raza Baqir as Governor State Bank. After that, Moody’s in their economic report described Pakistan’s economic situation as a better.
In this year Pakistan tightened the trading of forex companies, which ended the use of courier service in connection to the dollar.
In addition to implementing the CNIC stipulation, the government also took steps to prevent counter-dealing and collect data on buying or selling dollars.
In the month of November, food items became expensive at 16.6 percent in urban regions while in rural areas inflation rose to as high as 19.3 percent. Industrial growth dropped to 1.4 percent during 2019. This was the lowest in the last four years.
In the year 2019, the automobile industry was badly affected due to new taxation system reforms and the declining of the rupee. This year the performance of the textile and food industry was also low.
During the year 2019, Pakistan’s foreign exchange reserves saw improvement in December last year; those reserves also witnessed a huge decline. By September 2019, the federal government borrowed Rs 9,300 billion to cover the budget deficit. The 28 percent increase in the loan was due to a decrease in the value of the rupee this year.
Pakistan’s stock market was not stable in the early months of 2019, although the market has seen a gradual improvement as the it surpassed 40,000. In the same year, the Pakistan stock market has also made progress in expanding its contacts with China and bought a trading and surveillance system from Shenzhen Exchange, China.
On the other hand, our exports increased, costly imports decreased and the current account was stabilized. Pakistan could not be excluded from the grey list in the FATF index, however, it did escape being blacklisted. Further steps are needed to improve Pakistan’s ranking in the FATF index.
In 2019, matters pertaining to the China-Pakistan Economic Corridor remained sluggish. However, the Gwadar airport under CPEC also became operational.
During this time, several manipulated news circulated regarding CPEC. US State Department’s top official of South Asian affairs, Alice Wells also made a critiquing CPEC.
It is to be seen what changes 2020 will bring in Pakistan’s economy.
