Impact of Pak-IMF Bailout Arrangement on Economic Growth

Abstract

Abstract Views: 102

Government of Pakistan has been facing various macro-economic challenges due to internal and external factors. Pak economy suffers from monetary, fiscal and BOP crisis after every few years building up a near crisis scenario which needs to be managed through traditional stabilization policies most common among them is approaching to IMF. Pakistan’s policy of dependence on internal and external loans is not new and the cost of these crisis management plans has a strong reason behind slowing down socio-economic development. The recent economic crisis has approached after facing a significantly harsh macroeconomic imbalance during 2000-2016 while Pakistan was under an IMF Program. To bridge up the gaps in import- export, making up declining foreign reserves, satisfying FATF and support the BOP imbalance, Government was left with no alternative except to have a bailout package with IMF embracing all the attached harsh conditions. During the recent past Pakistan failed to enhance its portfolio, put a gauge on unnecessary and luxury exports at higher rates, a weak tax system where tax evasions increases fiscal deficit, lavish exemption and reductions in tax rates rising inflations, expanding unemployment and a weaker industrial base make Pakistan stand on the verge of serious dip. All this has a trickle down impact to the poor masses due to weaker economic policies and deepening corruption in Pakistan. These are the ideal ecological factors which held the IMF plant grow greener and healthier. The present bailout program has a list of policies to correct domestic and external factors and strengthen the economy of Pakistan as it has been doing in many other countered. This paper is an attempt to cover the impacts of previous program and of the recent one on the economy of Pakistan.