2024 witnessed Islamabad’s robust efforts to boost the economy out of the quagmire it found itself in. Prime Minister ‘Shehbaz Speed’ helped steamroll the economy by attempting to ensure that all indicators were moving in a positive direction.
The state, under Shehbaz Sharif, witnessed great success in turning the economy around as inflation rates plummeted to single digits, the Pakistan Stock Exchange (PSX) witnessed historic highs, and the trade deficit shrank to a more manageable level.
According to reports, inflation rates fell to their lowest level in approximately seven years. This marks a huge victory for the State Bank of Pakistan (SBP), which raised interest rates to an extortionate 22 percent to reduce inflationary pressures in the economy.
Inflation now sits comfortably in the single digits, with economic experts predicting that the inflation rate will remain fairly stable in the upcoming period. This is because inflation rates seem to be under control despite the SBP slashing interest rates by about 1000 basis points in the past few months.
As per reports, essential goods became more affordable under Shehbaz Sharif’s tenure as wheat and flour prices witnessed a noticeable decline. Earlier this month, data revealed that CPI inflation tanked to just 2.41 percent, representing the largest drop in approximately nine years.
However, the inflation situation is not as optimistic as it may seem at first glance. For instance, the price of other essential goods, such as potatoes and pulse grams, rose sharply by over 40 percent each in urban areas. The rise in the prices of the aforementioned goods was even more pronounced in rural areas lurking near 50 percent instead.
As such, inflation statistics must be taken with a grain of salt as the prices of some goods and services can witness increases too.
The business community has benefitted immensely from state policies to boost commercial activities. KSE-100, the benchmark index of PSX, saw an investment spike which led the index to cross the 109,000-point mark.
Reports reveal that investors poured large sums into the PSX, resulting in an additional eight billion rupees in market capitalisation. While Islamabad wanted to boost investor confidence, some of its policies ended up inadvertently causing a slump in the PSX. Shehbaz Sharif, along with Finance Minister Muhammad Aurangzeb, attempted to crack down on tax evaders while also eradicating the use of black money for commercial transactions.
This policy, undoubtedly designed with the best of intentions, caused a sharp decline in the PSX as it would have effectively barred certain individuals from partaking in trading activities.
Additionally, Commerce Minister Jam Kamal Khan’s tireless efforts to boost exports managed to boost export revenues to $30.64 billion. While Islamabad was unable to eradicate the trade-deficit entirely, the gap reduced by an impressive 12.3 percent.
