Balancing foreign loans with sustained growth

October 25, 2021

Balancing foreign loans with sustained growth

October 25, 2021
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In order to achieve debt sustainability, improve living standards and absorb the growing labour force, Pakistan’s economy must grow at a rate greater than 8 percent for a minimum period of 30 years. Given these high expectations and the conundrum of circular debt, Pakistan’s perpetual BoP, fiscal, and debt issues must be catered to with export enhancement rather than more IMF loans. IMF loans are accompanied by countless conditionalities that are not conducive to economic growth.

To finance a current account deficit, policies include:

  1. Reducing domestic consumption and expenditure on imports;
  2. Supply-side policies that can enhance competitiveness of exports and domestic industry.
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