Political environment hit economic growth during 2014

Lahore: The Pakistan Economy Watch (PEW) on Wednesday said politics and sit-ins hit government plans to overcome energy crisis and ensure good GDP growth in 2014. This year saw unprecedented hike is value of dollar against rupees and record oil prices that retreated, it said.

Similarly, the inflation touched new heights to fall later due to sliding oil prices, said Dr. Murtaza Mughal, President PEW.

The SBP started softening monetary policy due to extra space gained through retreating oil prices while remittances, manufacturing and GDP growth improved.

Exports stood at 25 billion dollars to June 2014 while imports were recorded at 45 billion dollars triggering trade deficit, he noted.

Dr. Murtaza Mughal said that strength of rupee demoralised exporters and reduced demand of Pakistani products in the international market which can be tackled through other means. During 2014, the government could not ensure proper privatization according to its manifesto and promise with the IMF.

Pakistan started decisive war against terror in 2014 which will drain resources in the short term but benefit country in the long run, he observed. Dr. Mughal said that the group ruling FPCCI was ousted by a newly formed alliance of the businessmen dominated by the textile sector which will have a positive impact on the economy and the largest export earning sector of the country.