Businesses look forward to stability

KARACHI: Post-election scenario is more important for the economy as the ‘stalemate’ prevailing for the last 15 days will see a vital change with the formation of the new government, said market sources.

Since the general elections were announced the stakeholders of the economy have been keenly watching the developments particularly the economic performance and the caretaker government’s relations with the IMF.

The traders, industrialists and corporate sector were not sure about the expected results of the general elections but were more interested to see the continuity of the economic policies.

It was observed that most of the financial sector experts were keen to continuation of the trade policy which helped to bring down the current account deficit to $831 million in the first half of the current fiscal year against $3.6bn in the same period last year.

However, Caretaker Finance Minister Shamshad Akhtar and former governor of the State Bank of Pakistan Dr Reza Baqir recently said the country requires another IMF bailout to stabilise the economy.

The interim setup succeeded in building confidence to initiate negotiations with the IMF and follow the guidelines to improve the economy. What is critical for the economic managers and other experts is the formation of a new government with enough support to deal with the IMF.

Many believe that the harsh IMF conditions for securing the $3bn Stand-By Arrangement were the prime reason for the bad performance of the economy while others see the IMF as a lifeline.

The Ministry of Finance in its recent report noted that the growth this year would be better since the agriculture output has improved. However, Large-Scale Manufacturing has returned to a growth trajectory ending the contractionary phase.

Researchers, however, said the government is getting support the agriculture while the industrial and manufacturing sectors are not performing to accelerate the economic growth.

The caretaker government has planned to reduce electricity tarrif to nine cents per unit for the export-oriented industry but for that it needs IMF’s go-ahead. Exporters urge he government to convince the IMF otherwise the country’s exports may fall in the next few months.