MINOR PROJECT REPORT SUBMITTED TOWARD THE PARTIAL FULFILLMENT

TOWARDS

BACHELOR OF COMMERCE (HONS)

ON

IMPACT OF PAKISTAN’S ECONOMIC CRISIS ON ECONOMY

Batch: 2022-2025

Submitted By: PROJECT GUIDE

Name of student: MUSKAN CHAUDHARY Name: Ms. VANSHIKA

Enrollment No:0620688822 Designation: Assistant Professor

 CERTIFICATE

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This is to certify that the project work “IMPACT OF PAKISTAN’S ECONOMIC CRISIS ON
ECONOMY” made by MUSKAN CHAUDHARY, Course: B.com(hons), Enrollment no.
0620688822 is an authentic work carried out by his/her under the guidance and
supervision of Ms. VANSHIKA

The project report submitted has been found satisfactory for the partial fulfillment of
the degree of Bachelor of Commerce (hons).

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 ACKNOWLEDGEMENT

It is in particular that I am acknowledging my sincere feeling towards my mentors who

graciously gave me their time and expertise.

They have provided me with valuable guidance, sustained efforts, and a friendly
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Signature:

Name of Student: MUSKAN CHAUDHARY

Enrollment No: 0620688822

Course: B.com (hons)

Class/Sem/shift: B.com(hons) /Sem 2/ Shift 1

 DECLARATION

I hereby declare that the following documented Project report titled “IMPACT OF
PAKISTAN’S ECONOMIC CRISIS ON ECONOMY” is an original and authentic work done
by me for the partial fulfillment of the Bachelor of Commerce (hons) degree program.

I hereby certify that all the Endeavour put in the fulfillment of the task are genuine and
original to the best of my knowledge & I have not submitted it earlier elsewhere.

Signature:

Name of Student: MUSKAN CHAUDHARY

Course Class & Shift: B.Com (hons), Shift 1

Enrolment No: 0620688822

 Table of Content

S. NO Particulars Page No.

1. Chapter-1 1-6
➢ Introduction & Objective

2. Chapter-2 7-22
➢ Literature Review
➢ SWOT Analysis
➢ Proposed Research Design
3. Chapter-3 23-31
➢ Data Analysis with statistical tools
4. Findings 32-33
5. Limitations 34-35
6. Suggestions & Recommendations 36-37
7. Conclusion 38
8. Bibliography 39
9. Annexure 40-41
 CHAPTER 1

INTRODUCTION AND OBJECTIVE

The 2022-2023 Pakistan economic crisis is an ongoing economic

crisis and part of 2022-2023 political unrest in Pakistan. It has caused severe
economic challenges for months due to which food, gas and oil prices have
risen.

The Russian invasion of Ukraine has caused fuel prices to rise worldwide.
Excessive external borrowings by the country over the years raised the spectre
of default, causing the currency to fall and making imports more expensive in
relative terms. By June 2022, inflation was at an all-time high, along with
rising food prices.

2022-2023 Pakistan Economic Crisis

Poor governance and low productivity per capita in comparison with other low
to middle-income developing countries have contributed to a balance of
payment crisis, where the country is unable to earn enough foreign exchange to
fund the imports that it consumes.

According to Indian strategic affairs specialist Sushant Sareen, Pakistan has

doubled its debt roughly every five years over the last 25-year period. Starting
from a debt of Rs. 3.06 trillion at the beginning of General Musharraf regime in
1999, the debt stood at Rs. 62.5 trillion at the end of the Imran
Khan government in 2022. While the debt grew at around 14 percent per year
on average, the GDP was growing at only 3 percent per year on average. This
led to an unsustainable debt burden. In the fiscal year 2022–23, the debt
 servicing obligations of Rs. 5.2 trillion exceed the entire federal government
revenue.

Pakistan's economic crisis was at the centre of a political standoff between

Prime Minister Shahbaz Sharif and his predecessor Imran Khan in 2022, which
led to Khan's ouster in April 2022. Sharif accused Khan of economic
mismanagement and mishandling of the country's foreign policy, forcing him
to step down in a no-confidence vote. Amid ousting, he ignited Haqeeqi Azaadi
political movement which caused nationwide political unrest calling for early
elections and civilian supremacy which in result worked as a catalyst for
already worsening economic condition. During 2019 Imran Khan tried to make
a deal with IMF and agreed with the several terms and conditions which
resulted the increase in inflation but Imran Khan failed to gain IMF loan.

Information Minister Maryam Aurangzeb told a news conference on 19 May

2022, that last month, Pakistan was committed to "controlling rising inflation,
stabilizing foreign exchange reserves, strengthening the economy and reducing
the country's dependence on imports". Import of unnecessary and luxury items
was banned. Sharif had said at the time that the decision would "save the
country's precious foreign exchange" and that Pakistan would have to "pursue
austerity."

In late May 2022, the government lifted the cap on fuel prices - a condition for
advancing the long-stalled bailout deal with the International Monetary
Fund (IMF). IMF also insisted Islamabad to raise electricity prices, ramp up tax
collection and make sizeable budget cuts.

Federal Minister for Planning and Development Ahsan Iqbal told reporters on
14 May 2022, that Pakistanis could reduce their tea consumption to "one or
two cups" a day as imports were putting additional financial pressure on the
government. "The tea we import is imported on credit," Iqbal said, adding that
businesses should be shut down first to save electricity. According to
the Observatory of Economic Complexity, the South Asian nation of 220
million is the world's largest tea importer, having bought more than $ 640
million worth of tea in 2020.

Inflation in Pakistan rose to 21.3% in June, the highest since December 2008
when inflation stood at 23.3%.

Finance Minister Miftah Ismail said that a loan of $2.3 billion from a Chinese
consortium of banks had been credited to the Pakistani central bank's account
in late June.

2022 Pakistan floods in summer cause over $30 billion dollars in economic
losses in Pakistan.

At the end of March 2022, the State Bank of Pakistan’s reserves stood at
$11.425bn, but they gradually tanked to an almost four-year low of $6.715bn
on 2nd December. Pakistan’s foreign exchange reserves equal to just five
weeks of merchandise imports.

The consistent depreciation of the rupee is said to be deepening the economic

crisis. At the end of March, the rupee stood at 183.48 to $1. On 9th December
2022, it closed at 224.40.
 In January 2023, for the first time, the CEO of Pakistan's largest bank, Habib
Bank comments publicly on the prevailing economic situation. He said it could
be a "big blow to the economy" if the stakeholders didn’t make the right
decisions swiftly.

In late January, Pakistan lifted the artificial cap on its currency, causing the
rupee to plunge 20% against the dollar in a few days. The government raised
fuel prices by 16%. And the Pakistani central bank raised its interest rate by
100 basis points to battle the country’s highest inflation in decades, expected to
be as high as 26% in January. Pakistan’s economy is on the brink of collapse.

In February 2023, a Moody economist predicted that inflation in Pakistan could

average 33% in the first half of the year 2023. China lends Pakistan further 700
million dollars to shore up FX reserves. Pakistan's Consumer price index (CPI)
further jumped to 31.5%, the highest annual rate in 50 years. Also Fitch
downgrades Pak's sovereign credit rating from CCC+ to CCC-. The New York-
based ratings agency warned that a default is a "real possibility".

In March, Moody's downgrades Pakistan's rating to Caa3; changes outlook to

stable from negative. Finance Minister Ishaq Dar said China approved a
rollover of a $1.3 billion loan for cash-strapped Pakistan, which will help shore
up its depleting foreign exchange reserves. The World Bank further recorded
the Consumer price index (CPI) for food items on a year on year basis at
45.1%, the second highest in South Asia after Sri Lanka. The Consumer price
index (CPI) raced to 35.4 per cent in March the highest annual rise in prices on
record, driven mainly by skyrocketing costs of food, electricity, beverage, and
transportthe highest annual rise in prices on record, driven mainly by
skyrocketing costs of food, electricity, beverage, and transport. The inflation
number was the highest annual rate since available data, i.e. July 1965,
according to the research firm Arif Habib Ltd, and is expected to rise in the
upcoming months.

In April 4, the World Bank projected about 4 million Pakistani people falling
below the lower middle-income ($3.6/day ) poverty line amid economic
growth plummeting to just 0.4% against a target of 5pc.
On 10 June 2022, the government unveiled a new 47 billion budget for 2022-
23 to persuade the IMF to resume the 6 billion bailout deal, which was agreed
upon by both sides in 2019. The current debt on Pakistan is around 247 billion
dollars (97% of the GDP).

In October 2022, the All Pakistan Textile Mills Association (APTMA)

announced that 1,600 garment mills were closed across the country due to
withdrawal of power subsidies and, as a result, five million people lost their
jobs. In December 2022, APTMA stated that mills across the country were
running at less than 50% capacity utilization and textile exports could fall
further from 2023.

A number of leading companies listed on the Pakistan Stock

Exchange announced closure of plants. Car assemblers such as Pak Suzuki
Motors, Toyota Indus, and Honda Atlas Cars, whose production relies
completely on parts imported from other countries, shut down assembly
plants after they failed to secure letters of credit due to foreign exchange curbs
imposed by the government. Other notable companies to shut factories due to
low demand and poor economic conditions include Millat Tractors, Ghandhara
Tyre & Rubber Company, Nishat Chunian, and Fauji Fertilizer Bin Qasim.

Shortage of foreign exchange reserves and depreciation in Pakistani

rupee created difficulties in importing crude oil, leading to a temporary closure
of Pakistan's largest petroleum refinery–Cnergyico, in February 2023.

Delays in securing letters of credit resulted in ships and containers of

pharmaceutical raw material, medicines and healthcare devices imported from
other countries to be stuck at seaports for prolonged periods. Several
pharmaceutical companies shut down due to "unaffordable cost of production".
As a consequence, a shortage of medicines and equipment was reported across
the country, forcing hospitals to postpone surgeries and treatment.

In April 2023, almost all of the country’s 30 mobile phone assembly units,
including three run by foreign brands, have shut down. This puts the future of
20,000 employees at stake.

Chinese officials blamed West behind Pakistan’s economic crisis, and state
media continues to talk about the strengths of the China-Pakistan Economic
 Corridor. “Only China has given a full plan. From this perspective, it is the
Western world that ‘abandoned’ Pakistan, and China is the one that extended a
helping hand. And if Pakistan wants complete self-help, it cannot completely
rely on China, it still has to fight for itself,” wrote Liu Qingbin, senior
researcher at the China Digital Economy Institute.

The US has expressed serious concerns about Pakistan’s debt to China. “We
have been very clear about our concerns not just here in Pakistan, but
elsewhere all around the world about Chinese debt, or debt owed to China,”
said US State Department Counselor Derek Chollet during his visit to
Islamabad on 15 February 2023.
 CHAPTER 2

LITERATURE REVIEW

Pakistan’s economic literature encompasses a broad range of topics, including

macroeconomics, microeconomics, trade, finance, development, and
governance. Below is a brief review of some of the key themes and issues
addressed in the country’s economic literature.

Macroeconomics: Pakistan’s macroeconomic literature focuses on issues such

as inflation, fiscal and monetary policy, and economic growth. Much of the
recent research has explored the impact of external factors, such as global
commodity prices and international capital flows, on the country’s
macroeconomic performance.

Microeconomics: Microeconomic studies in Pakistan have examined issues

such as market structure and competition, labour markets, and firm
productivity. Researchers have also investigated the effects of government
policies, such as tax incentives and subsidies, on firm behaviour and market
outcomes.

Trade: Pakistan’s trade literature has focused on issues such as trade

liberalization, trade agreements, and the impact of trade on economic growth
and development. Recent studies have also looked at the country’s
participation in global value chains and its potential for export diversification.

Finance: Pakistan’s finance literature has examined issues such as banking

sector development, access to finance, and financial inclusion. Researchers
have also looked at the impact of government policies, such as interest rate
controls and capital controls, on financial sector performance.

Development: Pakistan’s development literature has addressed a broad range of

issues, including poverty reduction, inequality, education, health, and gender.
Recent studies have focused on the role of social protection programs in
reducing poverty and improving welfare outcomes.

Governance: Pakistan’s governance literature has explored issues such as

corruption, political instability, and institutional quality. Researchers have also
 looked at the impact of governance on economic performance, including the
relationship between corruption and economic growth.

Growth and Investment: In 2022, the real GDP growth remained at 5.97
percent. However, underlying macroeconomic imbalances and associated
domestic and international risks have dampened celebrations. The economy of
Pakistan rebounded from the pandemic (0.94 percent contraction in 2020) and
continued to post a V-Shaped economic recovery which is higher than the 5.74
percent recorded last year.

Agriculture: During 2022, the agriculture sector recorded a remarkable growth

of 4.40 percent and surpassed the target of 3.5 percent and last year’s growth of
3.48 percent. This growth is mainly driven by high yields, attractive output
prices and supportive government policies, better availability of certified seeds,
pesticides, and agriculture credit.

Manufacturing and Mining: The performance of Large-Scale Manufacturing

(LSM) stood tremendous with 10.4 percent growth during July-March 2022 as
compared to growth of 4.2 percent same period last year. The prudent measures
and continuous support along with rising global demand, easy access to credit,
and partially subsidized energy supplies bode well in boosting the business
sentiments and achieving higher growth of LSM.

Fiscal Development: The fiscal policy at the global level is functioning in a

highly volatile environment and Pakistan is no exception. The conflict between
Russia and Ukraine has potentially serious economic consequences for
Pakistan’s economy as it has exacerbated difficult policy choices for the
country. Thus, controlling inflation, strengthening the economic recovery,
supporting the vulnerable, and rebuilding fiscal buffers, all became
significantly important.

Money and Credit: SBP had started to tighten its monetary policy stance from
September 2021 after keeping the policy rate unchanged at 7 percent in all the
MPC meetings held in 2021. The monetary policy in Pakistan shifted direction
in 2022 in accordance with the changing economic outlook owing to a recovery
in domestic demand, higher commodity prices, and persistent inflationary
pressures. Consequently, the policy rate had increased by a cumulative 275 bps
 to 9.75 percent during consecutive three monetary policy decisions, within a
span of three months.

Capital Markets & Corporate Sector: The world stock indices started on a
positive note during the current fiscal year. However, due to the geopolitical
tensions especially the Russia-Ukraine war plummeted the global indices in the
month of February and March 2022.

Inflation: The CPI inflation for the period July-May 2022 recorded at 11.3
percent as against 8.8 percent during the same period last year. The other
inflationary indicators like Sensitive Price Indicator (SPI) recorded at 16.7
percent as against 13.5 percent last year. Wholesale Price Index (WPI)
recorded at 23.6 percent in July-May 2022 compared to 8.4 percent same
period last year.

Public Debt: Total public debt was recorded at Rs 44,366 billion at end-March
2022. Domestic debt was recorded at Rs 28,076 billion, while external public
debt was recorded at Rs 16,290 billion or US$ 88.8 billion at end-March 2022.

Education: Pakistan is committed to transform its education system into a high-

quality global market demand-driven system in accordance with Goal 4 of
Sustainable Development Goals (SDGs) which pertains to the quality of
education.

Health and Nutrition: Considering, good health is essential for human progress
and wellbeing, the Government remained committed to improve the health
status of the population through the provision of Universal Health Coverage
(UHC) to all segment of the society. To this end, the Sehat Sahulat Card was
launched for reducing health inequality in the country and ameliorate the well-
being of all, is a step towards achieving UHC. In 2022, the Government also
expanded health infrastructure by increasing the number of hospitals, Rural
Health Units (RHUs), Basic Health Units (BHUs), doctors, dentists, and
dispensaries to meet the growing health services demand. However, COVID-
19 had disrupted the major strides in the health sector as the resources were
shifted to contain the spread of the fourth and fifth waves of the pandemic. It
was a threat to the health system, lives, and livelihood which was successfully
 contained by the Government through timely procurement and a massive
vaccination drive.

Population, Labour Force, and Employment: Pakistan is the 5th most

populous country in the world. According to the National Institute of
Population Studies (NIPS), the estimated population of Pakistan is 224.78
million in 2021 of which 82.83 million reside in urban areas whereas 141.96
million live in rural areas and the population density is 282 per Km.

Pakistan has a large labour force that stands among the top 10 largest labour
forces in the world. According to the latest Labour Force Survey 2021, the
labour force increased from 65.5 million in 2018 to 71.76 million in 2021 and
the number of employed persons increased from 61.71 million to 67.25 million
during the same period. The unemployment rate decreased from 6.9 percent in
2019 to 6.3 percent in 2021. Overall employment to population ratio is 42.1
percent and this ratio is higher in male (64.1 percent) as compared to female
(19.4 percent) in 2021.

According to LFS 2021, the share of employment in the agriculture sector

decreased from 39.2 percent in 2019 to 37.4 percent in 2021. The share of
employment in the construction sector has increased from 8.0 percent in 2019
to 9.5 percent in 2021. This increase shows that job opportunities are being
created in the country. The wholesale and retail trade sector has shown 14.4
percent employment in 2021.

Transport and communications: Presently, Pakistan has 48 national highways,

motorways, and strategic roads with a total length of 14,480 Km. In the first
quarter of 2022, PIA has added two airbuses A320 fleets.Pakistan Railways
comprised a total of 466 Locomotives for a 7,791 Km route length. During
2022, PEMRA issued 265 Licenses for FM Radio and 4,152 Cable TV
Licenses. In addition to this, there are 9,522 post offices across Pakistan.

Energy: The latest available data indicates that the import bill of oil increased
to US$ 17.03 billion during July-April 2022 compared to US$8.69 billion
during the same period last year, showing increase of 95 percent. Crude oil
imports rose by 75.34 percent in value and 1.4 percent in quantity. Similarly,
liquefied natural gas witnessed an increase of 82.90 percent in value while
 liquefied petroleum gas imports also jumped by 39.86 percent during July-
April 2022. During July-February 2022, 75.64 percent of gas is domestically
produced while 24.36 percent of gas is being imported. Coal is also used for
electricity generation in Pakistan. Currently, the overall electricity generation
from coal has reached 5280 MW. Thar coal is contributing 1,320 MW, while
imported coal’s contribution to electricity generation is 3,960 MW which is
around 75 percent of the total electricity generation from coal in the country.

Social Protection: The COVID-19 pandemic has significantly increased

poverty and inequality globally, causing a substantial reversal in progress
toward global SDGs. According to the latest estimates provided by the United
Nations Department of Economic and Social Affairs in the report “The World
Economic Situation and Prospects 2022”, progress in reducing extreme poverty
has been set back by several years in most countries. An unprecedented 85
million more people entered extreme poverty in 2020 globally.

Climate Change: In Pakistan, environmental degradation and climate change

are adversely affecting the economy, livelihood of the poor, and sustainable
development. On the one hand, a growing population, unplanned urban
expansion, and decidedly dependence on natural resources puts immense
pressure on the environment that triggering climate change.

Overall, Pakistan’s economic literature reflects a diverse set of research

interests and priorities, with a strong focus on the country’s macroeconomic
performance and the challenges facing its development process.
 SWOT ANALYSIS

SWOT analysis is a strategic planning tool that helps identify the Strengths,
Weakness, Opportunities, Threats of a particular entity. Here is a SWOT
analysis of Pakistan’s economy:

Pakistan’s economy has several strengths that contribute to its potential for
growth and development:

1. Strategic Location: Pakistan’s location at the crossroads of South Asia,

Central Asia, and the Middle East makes it an important trade and
transit hub for the region. Its proximity to major markets such as China,
India, and the Middle East provides access to large markets and
potential trade partners.

2. Young and Growing Population: With a large and young population,

Pakistan has a potential labour force that can support economic growth
in the long run. This demographic advantage can fuel the country’s
economic growth and help address its development challenges.

3. Natural Resources: Pakistan is rich in natural resources, including

minerals, oil and gas, which can support economic growth and
development. The country has significant reserves of coal, copper and
gold among other minerals, that can be utilized for industrial
development.

4. Growing Middle Class: The growth of the middle class in Pakistan

provides a potential market for domestic and foreign investment. The
increasing consumer demand for goods and services can create
opportunities for businesses to expand their operations and improve the
country's economic growth.

5. Strong Agriculture Sector: Agriculture is a significant contributor to

Pakistan's economy, accounting for approximately 20% of GDP and
providing employment to around 40% of the country's labor force. The
sector has the potential for growth and expansion through increased
productivity, improved irrigation systems, and better marketing
infrastructure.
 Overall, these strengths can be leveraged to enhance Pakistan's
economic growth and development. However, addressing challenges
related to infrastructure, governance, macroeconomic stability, and
security will be essential for the country to fully realize its potential.

Pakistan's economy faces several weaknesses that hinder its potential

for growth and development. Some of the major weaknesses include:

1. Weak Infrastructure: Pakistan's infrastructure, including roads, ports,

and energy systems, is underdeveloped and inadequate to meet the
needs of a growing economy. This limits the country's ability to attract
investment and expand its industrial base.

2. Poor Governance: Corruption, political instability, and weak

institutions have hampered economic growth and development in
Pakistan. These issues have resulted in a lack of investor confidence,
weak public services, and limited accountability.

3. Low Tax Base: The country has a low tax base, which limits the
government's ability to fund infrastructure and social services. This
results in a lack of public investment and services, further limiting
economic growth and development.

4. Energy Crisis: Pakistan has been facing an energy crisis for years, with
frequent power outages and load shedding. This negatively impacts
businesses and industry, reducing their productivity and
competitiveness.

5. Low Human Development Index: Pakistan has a low human

development index (HDI) due to limited access to quality education,
healthcare, and other basic services. This hinders the country's potential
for long-term economic growth and development.

Overall, these weaknesses limit Pakistan's economic potential and

require significant reforms to address them. Improving infrastructure,
addressing governance issues, expanding the tax base, and resolving the
energy crisis are essential for sustained economic growth and
development. Additionally, investing in human capital through
 education and healthcare can improve the country's HDI and unlock
further economic potential.

Pakistan's economy has several opportunities that can be leveraged to

enhance its growth and development. Some of the major opportunities
include:

1. China-Pakistan Economic Corridor (CPEC): The CPEC project has the

potential to bring significant investment to Pakistan and improve its
infrastructure and energy systems. This project can help address some
of the country's infrastructure weaknesses and create new business
opportunities.

2. Growing Digital Economy: Pakistan's growing digital economy

provides opportunities for entrepreneurship, innovation, and job
creation. This sector has seen significant growth in recent years, with
the emergence of e-commerce, digital payment systems, and tech start-
ups.

3. Economic Diversification: The government's efforts to diversify the

economy and promote non-traditional sectors, such as IT, can reduce
reliance on traditional industries and increase competitiveness. This can
lead to the development of new industries and the creation of new jobs.

4. Export Potential: Pakistan has export potential in several sectors,

including textiles, leather, agriculture, and sports goods. Focusing on
these sectors and developing new export markets can lead to increased
economic growth and development.

5. Human Capital: Pakistan has a large and young population that can
provide a potential workforce for the future. Investing in education and
skills development can enhance the country's human capital and lead to
increased productivity and competitiveness.

Overall, these opportunities provide a platform for Pakistan to enhance

its economic growth and development. However, they also require
significant investments in infrastructure, innovation, and human capital
to fully realize their potential. Addressing governance issues and
 improving the business environment can also help attract investment
and promote economic growth.

Pakistan's economy faces several threats that can hinder its growth and
development. Some of the major threats include:

1. Political Instability: Pakistan's political instability and security concerns

can create uncertainty for investors and businesses. This can negatively
impact economic growth and development by reducing investor
confidence and limiting the country's ability to attract investment.

2. Terrorism: Terrorism and extremism pose a significant threat to

Pakistan's economy, particularly in terms of tourism and foreign
investment. Terrorist attacks can disrupt economic activity and damage
infrastructure, leading to significant economic losses.

3. Balance of Payment Crisis: Pakistan faces a chronic balance of payment

crisis, where its imports exceed exports, leading to a widening trade
deficit. This can result in a depletion of foreign exchange reserves and
potential debt default, which can lead to economic instability.

4. Climate Change: Pakistan is highly vulnerable to the impacts of climate

change, including droughts, floods, and extreme weather events. These
events can disrupt economic activity, particularly in the agriculture
sector, and damage infrastructure, leading to significant economic
losses.

5. Global Economic Uncertainty: Pakistan's economy is vulnerable to

global economic uncertainty, such as changes in oil prices, global
economic slowdowns, and trade tensions between major economies.
These factors can negatively impact Pakistan's exports and remittances,
leading to a decline in economic growth.

Overall, these threats require careful attention from policymakers and

stakeholders to address. Improving political stability and security,
addressing the balance of payment crisis, and building resilience to
climate change are essential to enhancing Pakistan's economic growth
and development.
 PROPOSED RESEARCH DESIGNS

Designing a research study on Pakistan’s economy would require

defining the research questions, determining the scope of study,
identifying data sources, and selecting the appropriate research
methods. Here is a proposed research design for studying Pakistan’s
economy:

1. Research Questions: The first step in designing a research study is

to clearly define the research questions. Some possible research
questions related to Pakistan's economy include:

a. What are the major drivers of economic growth in Pakistan?

b. How can Pakistan improve its balance of payments and reduce

the trade deficit?

c. What is the role of small and medium-sized enterprises (SMEs)

in Pakistan's economy, and how can they be supported to
contribute more to economic growth?

d. What is the impact of the China-Pakistan Economic Corridor

(CPEC) on Pakistan's economy, and how can its potential
benefits be maximized?

e. How can Pakistan address the issue of low tax collection and
increase its revenue base to finance development projects and
social welfare programs?

f. What are the challenges faced by the agriculture sector in

Pakistan, and how can they be addressed to improve agricultural
productivity and support rural development?

g. How can Pakistan attract more foreign investment and improve

its business environment to promote economic growth and
development?

h. What is the impact of climate change on Pakistan's economy,

and how can the country build resilience to its effects?
 i. How can Pakistan address the issue of youth unemployment,
and what role can education and skills training play in
promoting economic growth and development?

j. What are the potential benefits and challenges of digital

transformation for Pakistan's economy, and how can the country
capitalize on the opportunities presented by new technologies?

2. Scope of Study: Once the research questions have been defined, the
scope of the study needs to be determined. This includes identifying
the specific sectors or regions that will be included in the study, as
well as the time period that will be covered. However, some
possible areas that could be included in the scope of a study on
Pakistan's economy are:

A. Macroeconomic indicators: A study on Pakistan's economy

could include an analysis of key macroeconomic indicators such
as GDP growth, inflation, trade balance, and fiscal deficit.

B. Industry and sector analysis: The study could also focus on

specific industries and sectors such as agriculture,
manufacturing, services, and energy. This could involve
analyzing the challenges and opportunities faced by these
sectors and identifying potential areas for growth and
development.

C. Regional analysis: The study could also focus on specific

regions of Pakistan such as Punjab, Sindh, Balochistan, and
Khyber Pakhtunkhwa. This could involve analyzing the
economic conditions and opportunities in each region and
identifying potential areas for investment and development.

D. International trade and investment: A study on Pakistan's

economy could also analyze the country's trade and investment
relations with other countries. This could involve identifying
potential trade partners and investment opportunities, as well as
analyzing the impact of international trade agreements and
policies on Pakistan's economy.
 E. Socio-economic indicators: The study could also include an
analysis of socio-economic indicators such as poverty rates,
employment levels, education, and health. This could involve
identifying the challenges and opportunities related to social and
human development in Pakistan.

F. Government policies and reforms: The study could also focus

on government policies and reforms related to the economy,
such as tax policies, investment policies, and trade policies. This
could involve analyzing the impact of these policies on the
economy and identifying potential areas for improvement.

Overall, the scope of a study on Pakistan's economy should be

based on the research questions and objectives, and should
consider the various factors that contribute to economic growth
and development in the country.

3. Data Sources: The next step is to identify data sources that can be
used to answer the research questions. This could include secondary
data sources such as government reports, academic journals, and
international organizations like the World Bank or IMF. Primary
data sources, such as surveys or interviews with stakeholders, may
also be used. There are several data sources that can be used to
study Pakistan's economy. Here are some of the main ones:

A. Pakistan Bureau of Statistics (PBS): The PBS is the primary

agency responsible for collecting and compiling data on
economic and social indicators in Pakistan. It provides data on a
wide range of topics including national accounts, trade, prices,
employment, and education.

B. State Bank of Pakistan (SBP): The SBP is the central bank of

Pakistan and collects data on banking and financial sector
indicators such as money supply, credit, and interest rates. It
also publishes data on foreign exchange reserves, balance of
payments, and external debt.
 C. Ministry of Finance: The Ministry of Finance publishes data on
government finances, including budgetary accounts, fiscal
deficit, and public debt.

D. Securities and Exchange Commission of Pakistan (SECP): The

SECP is the regulator of the corporate sector in Pakistan and
collects data on corporate profits, dividends, and other financial
indicators.

E. World Bank: The World Bank provides a wide range of data on

Pakistan's economy, including national accounts, poverty rates,
health and education indicators, and infrastructure indicators.

F. International Monetary Fund (IMF): The IMF provides data on

Pakistan's macroeconomic indicators, balance of payments, and
external debt.

G. United Nations Development Programme (UNDP): The UNDP

provides data on human development indicators such as
education, health, and poverty in Pakistan.

H. Research institutions and think tanks: Several research

institutions and think tanks in Pakistan also conduct studies and
publish data on various aspects of the economy, including the
Pakistan Institute of Development Economics (PIDE), Institute
of Business Administration (IBA), and the Lahore School of
Economics (LSE).

These are some of the main data sources for studying Pakistan's
economy. The availability and quality of data may vary
depending on the specific indicator and time period of interest.
It is important to carefully evaluate the data sources and ensure
that they are reliable and relevant for the research questions
being addressed.

4. Research Methods: Depending on the research questions and data

sources, a range of research methods could be used. These could
include:
a. Descriptive analysis: This involves the analysis of existing data
to describe the economic situation in Pakistan. This can be done
through the calculation of basic statistics such as means,
medians, and standard deviations, as well as through the use of
graphs and charts to visually represent the data.

b. Econometric analysis: This involves the use of statistical

methods to estimate relationships between different economic
variables. This can involve the use of regression analysis, time
series analysis, or panel data analysis to identify causal
relationships between variables.

c. Case studies: This involves the in-depth analysis of a specific

industry, sector, or region in Pakistan. Case studies can be used
to identify challenges and opportunities in a specific area, as
well as to understand the impact of policies and interventions on
the economy.

d. Surveys: Surveys can be used to collect data from individuals or

households on specific economic behaviors, attitudes, and
preferences. Surveys can be useful for understanding consumer
behavior, employment patterns, and other aspects of the
economy that are difficult to capture through other data sources.

e. Focus groups: Focus groups involve bringing together a small

group of individuals to discuss specific economic issues or
topics. This can be useful for understanding the perspectives and
experiences of different groups in the economy, such as small
business owners or farmers.

f. Field experiments: Field experiments involve the random

assignment of interventions or policies to different groups in the
economy to test their impact. This can be useful for evaluating
the effectiveness of specific policies or interventions, and for
identifying potential areas for improvement.

These are some of the main research methods used in the study
of Pakistan's economy. The choice of method will depend on the
 research questions and objectives, as well as the availability of
data and resources.

5. Analysis and Reporting: Once the data has been collected, it needs
to be analyzed and reported. This could involve using data
visualization tools, statistical analysis software, or other methods to
analyze and interpret the data. The findings of the study can then be
presented in a research report, academic paper, or policy brief. Here
are some steps involved in the analysis and reporting of Pakistan's
economy:

A. Data collection and cleaning: The first step in the analysis of

Pakistan's economy is to collect and clean data from various
sources. This may involve checking for inconsistencies, missing
data, and outliers.

B. Data analysis: Once the data is cleaned, it is analyzed using

various statistical and econometric methods to identify patterns,
trends, and relationships between different variables. This may
involve the use of software such as Excel, Stata, or R.

C. Interpretation of findings: The findings from the data analysis

are then interpreted to draw conclusions and recommendations.
This may involve discussing the strengths and weaknesses of
the economy, identifying challenges and opportunities, and
suggesting policy interventions.

D. Reporting: The findings and recommendations are then

communicated to various stakeholders through reports,
presentations, or other forms of communication. This may
involve using charts, tables, and other visual aids to help convey
the key messages.

E. Feedback and refinement: Finally, the analysis and reporting

process should be subject to feedback and refinement from
stakeholders. This may involve seeking feedback on the clarity
and relevance of the findings and recommendations, as well as
incorporating new data or insights as they become available.
Overall, the analysis and reporting of Pakistan's economy should be
done in a clear, objective, and transparent manner, with the aim of
informing decision-making and promoting economic growth and
development.
 CHAPTER 3

DATA ANALYSIS WITH STATISTICAL TOOLS

There are several statistical tools that can be used for data analysis on
Pakistan's economy. Here are some of the most commonly used statistical
tools:

1. Descriptive statistics: This involves the calculation of basic statistics

such as mean, median, mode, variance, and standard deviation to
summarize the data and provide insights into the characteristics of the
data. Descriptive statistics is a statistical technique used to summarize
and describe the important features of a dataset. Here are some
examples of descriptive statistics that can be used to analyze Pakistan's
economy:

A. Measures of central tendency: These statistics are used to describe the

center of a distribution and include mean, median, and mode. For
example, the mean GDP growth rate can provide an indication of the
average growth rate of the economy over a given period.

B. Measures of dispersion: These statistics are used to describe the spread

or variability of a distribution and include variance, standard deviation,
and range. For example, the standard deviation of inflation rates can
provide an indication of how much the inflation rate has varied over
time.

C. Frequency distribution: This involves categorizing data into intervals or

bins and counting the number of observations in each interval. For
example, the frequency distribution of income levels can provide
insights into the distribution of income across the population.

D. Skewness and kurtosis: Skewness measures the degree to which a

distribution is asymmetric, while kurtosis measures the degree to which
a distribution is peaked or flat. For example, the skewness of the
distribution of tax rates can indicate whether the distribution is skewed
towards high or low tax rates.
E. Correlation: This measures the strength and direction of the relationship
between two variables. For example, the correlation between exports
and GDP can indicate whether there is a positive or negative
relationship between these two variables.

These are just a few examples of descriptive statistics that can be used
to analyze Pakistan's economy. By using descriptive statistics,
researchers can gain a better understanding of the key features and
trends in the economy, which can be useful for policy-making and
planning purposes.

2. Inferential statistics: This involves the use of statistical tests to draw

inferences about the population from a sample. For example, a
hypothesis test can be used to test whether a particular economic policy
had a statistically significant impact on economic growth. Inferential
statistics is a statistical technique used to make inferences about a
population based on a sample. Here are some examples of inferential
statistics that can be used to analyze Pakistan's economy:

A. Hypothesis testing: This involves testing a hypothesis about a

population parameter using a sample. For example, researchers may
test whether the mean income of a population has increased over
time.

B. Confidence intervals: This involves estimating a range of values

that is likely to contain the population parameter with a certain level
of confidence. For example, researchers may estimate the 95%
confidence interval for the mean GDP growth rate.

C. Regression analysis: This involves estimating the relationship

between two or more variables and making predictions about the
population based on the relationship. For example, researchers may
use regression analysis to estimate the impact of a specific
economic policy on GDP growth.
 D. Time-series analysis: This involves analyzing data over time to
identify trends and patterns. For example, researchers may use time-
series analysis to forecast future economic trends.

E. Panel data analysis: This involves analyzing data from multiple

entities over time to estimate the impact of different factors on each
entity. For example, researchers may use panel data analysis to
estimate the impact of different economic policies on different
regions or sectors of the economy.

These are just a few examples of inferential statistics that can be

used to analyze Pakistan's economy. By using inferential statistics,
researchers can make inferences about the population based on a
sample and draw conclusions about the effects of different
economic policies and factors on the economy.

3. Regression analysis: This involves the use of linear or nonlinear

regression models to estimate the relationship between two or more
variables. For example, a regression analysis can be used to estimate
the relationship between economic growth and factors such as
investment, government spending, and exports. Regression analysis is a
statistical technique used to estimate the relationship between a
dependent variable and one or more independent variables. In the
context of Pakistan's economy, researchers may use regression analysis
to estimate the impact of different economic factors on the dependent
variable, such as GDP, inflation, or unemployment. Here are the steps
involved in conducting a regression analysis of Pakistan's economy:

A. Define the dependent variable: The dependent variable is the

variable that researchers want to estimate the relationship with
the independent variables. In the case of Pakistan's economy,
the dependent variable may be GDP growth rate, inflation rate,
or unemployment rate.

B. Define the independent variables: The independent variables are

the variables that may affect the dependent variable. In the case
 of Pakistan's economy, the independent variables may include
factors such as interest rates, exchange rates, government
spending, or exports.

C. Collect data: Researchers will need to collect data on the

dependent variable and independent variables for the time
period of interest.

D. Run the regression analysis: Researchers can run a regression

analysis using statistical software, such as Stata, R, or SPSS.
The output of the regression analysis will include the estimated
coefficients for each independent variable and the overall
goodness-of-fit of the regression model.

E. Interpret the results: Researchers can interpret the results of the

regression analysis to determine the significance and magnitude
of the relationship between the dependent variable and
independent variables. For example, if the coefficient for the
interest rate variable is negative and statistically significant, it
may indicate that an increase in interest rates is associated with
a decrease in GDP growth rate.

F. Test the assumptions: Researchers should also test the

assumptions of the regression model, such as normality of
residuals and homoscedasticity, to ensure the validity of the
results.

By conducting a regression analysis of Pakistan's economy,

researchers can estimate the impact of different economic
factors on the dependent variable and provide insights for
policy-making and planning purposes.

4. Time-series analysis: This involves the analysis of data over time to

identify trends and patterns. Time-series analysis can be useful for
forecasting future economic trends and for identifying the impact of
specific events or policies on the economy. Time series analysis is a
statistical technique used to analyze data over time to identify trends
and patterns. In the context of Pakistan's economy, time series analysis
can be used to analyze economic indicators such as GDP, inflation, and
unemployment over a period of time. Here are the steps involved in
conducting a time series analysis of Pakistan's economy:

A. Collect data: The first step is to collect time series data on the
economic indicators of interest. This data can be obtained from
various sources such as the World Bank, the International
Monetary Fund, or the State Bank of Pakistan.

B. Visualize the data: The next step is to plot the data to visualize
any trends, patterns, or seasonality. This can be done using line
charts or bar charts.

C. Remove seasonality and trends: The time series data may

contain seasonality and trends that can obscure the underlying
patterns. To remove seasonality, researchers can use techniques
such as seasonal differencing or seasonal decomposition. To
remove trends, researchers can use techniques such as
differencing or detrending.

D. Model the data: Once the data has been cleaned, researchers can
model the time series using statistical techniques such as
autoregressive integrated moving average (ARIMA) or seasonal
ARIMA (SARIMA) models. These models can be used to
forecast future values of the economic indicators.

E. Evaluate the model: Researchers should evaluate the

performance of the time series model by comparing the
forecasted values with the actual values. This can be done using
statistical measures such as mean squared error or root mean
squared error.

F. Interpret the results: Finally, researchers can interpret the results

of the time series analysis to identify any trends or patterns in
the economic indicators. For example, researchers may identify
a long-term trend in GDP growth or seasonality in inflation.

By conducting a time series analysis of Pakistan's economy,

researchers can gain insights into the historical trends and
 patterns of economic indicators and forecast future values. This
can be useful for policymakers, investors, and businesses in
making informed decisions.

5. Panel data analysis: This involves the analysis of data from multiple
entities over time. For example, panel data analysis can be used to
estimate the impact of different economic policies on different regions
or sectors of the economy. Panel data analysis is a statistical technique
used to analyze data that includes information on both cross-sectional
units and time periods. In the context of Pakistan's economy, panel data
analysis can be used to analyze the relationship between economic
indicators and other factors, such as government policies, demographic
characteristics, and social factors, over time. Here are the steps
involved in conducting a panel data analysis of Pakistan's economy:

a. Collect data: The first step is to collect panel data on the

economic indicators and other relevant factors for a
sample of cross-sectional units over time. The sample
could be households, firms, industries, or regions,
depending on the research question.

b. Define the model: Researchers should define a

theoretical model that specifies the relationship between
the economic indicators and other factors. This model
can be used to estimate the coefficients of the
independent variables and test hypotheses about the
relationship between the variables.

c. Choose the estimation method: There are several

methods for estimating panel data models, such as fixed
effects, random effects, and pooled regression models.
Researchers should choose the method that is most
appropriate for the research question and the
characteristics of the data.

d. Estimate the model: Researchers can estimate the panel

data model using statistical software such as Stata, R, or
 Eviews. The output of the model will include the
estimated coefficients of the independent variables and
the overall goodness-of-fit of the model.

e. Interpret the results: Researchers can interpret the results

of the panel data analysis to identify the factors that are
associated with changes in the economic indicators. For
example, researchers may find that government policies,
demographic characteristics, or social factors have a
significant impact on GDP growth, inflation, or
unemployment.

f. Test the assumptions: Researchers should test the

assumptions of the panel data model, such as the absence
of serial correlation, the presence of heteroscedasticity,
and the normality of the errors.

By conducting a panel data analysis of Pakistan's

economy, researchers can gain insights into the factors
that are associated with changes in economic indicators
over time and provide policymakers with evidence-based
recommendations for economic policies and programs.

6. Cluster analysis: This involves the identification of groups or clusters of

entities that share similar characteristics. Cluster analysis can be useful
for identifying regional or sectoral differences in the economy. Cluster
analysis is a statistical technique used to group observations or
variables into clusters based on their similarity or dissimilarity. In the
context of Pakistan's economy, cluster analysis can be used to identify
groups of regions or industries that share similar characteristics or
patterns of economic performance. Here are the steps involved in
conducting a cluster analysis of Pakistan's economy:

A. Collect data: The first step is to collect data on the variables of

interest, such as GDP, exports, inflation, unemployment, or
 other relevant economic indicators, for a sample of regions or
industries in Pakistan.

B. Choose the variables: Researchers should select the variables

that are most relevant for the research question and that capture
the key dimensions of economic performance.

C. Normalize the data: Researchers should normalize the data by

standardizing the variables to have a mean of zero and a
standard deviation of one. This step is important to ensure that
all variables are on the same scale and to avoid biases in the
clustering process.

D. Choose the clustering algorithm: There are several clustering

algorithms that can be used in cluster analysis, such as k-means,
hierarchical clustering, or DBSCAN. Researchers should choose
the algorithm that is most appropriate for the research question
and the characteristics of the data.

E. Determine the number of clusters: Researchers should

determine the optimal number of clusters by using statistical
measures such as the elbow method, the silhouette method, or
the gap statistic. This step is important to ensure that the clusters
are meaningful and not arbitrary.

F. Assign observations to clusters: Researchers can assign each

observation to a cluster based on their similarity or dissimilarity
with other observations. This step can be done using the
clustering algorithm chosen in step 4.

G. Interpret the results: Researchers can interpret the results of the

cluster analysis to identify the characteristics or patterns of
economic performance that distinguish each cluster. For
example, researchers may find that some regions or industries in
Pakistan are characterized by high GDP growth and low
inflation, while others are characterized by high unemployment
and low exports.
 By conducting a cluster analysis of Pakistan's economy,
researchers can gain insights into the heterogeneity of economic
performance across regions or industries and provide
policymakers with evidence-based recommendations for
targeted interventions or policies.

These are some of the most commonly used statistical tools for data
analysis on Pakistan's economy. The choice of tool will depend on the
research question and the nature of the data. It is important to use
appropriate statistical tools to ensure that the analysis is accurate and
reliable.
 FINDINGS

Pakistan has faced several economic crises over the years, each with its unique
causes and consequences. Some of the common findings from Pakistan's
economic crises include:

1. High inflation: Pakistan's economic crises have often been

characterized by high inflation, which erodes the purchasing power of
consumers, reduces economic growth, and leads to social unrest.

2. Balance of payments crisis: Pakistan has frequently faced a balance of

payments crisis, where its imports exceed its exports, leading to a
depletion of foreign exchange reserves and a sharp devaluation of the
Pakistani rupee.

3. Low foreign direct investment: Pakistan's economic crises have also

been characterized by a low level of foreign direct investment (FDI),
which limits the country's ability to finance its development projects,
create employment opportunities, and enhance productivity.

4. Energy crisis: Pakistan has been facing an energy crisis due to a

shortage of electricity and natural gas, which has adversely affected the
industrial sector and led to reduced economic growth.

5. Political instability: Pakistan's economic crises have often been

associated with political instability, which creates uncertainty and
discourages investment, both domestic and foreign.

6. High debt burden: Pakistan's debt burden has been increasing over the
years, and its servicing has become a significant drain on the country's
resources, limiting its ability to invest in development projects.

7. Weak institutional framework: Pakistan's economic crises have exposed

the weaknesses of its institutional framework, including the tax system,
regulatory bodies, and governance structures, which have limited the
country's ability to respond effectively to economic shocks.

These findings highlight the need for Pakistan to address structural

weaknesses in its economy and implement policies that promote
macroeconomic stability, enhance competitiveness, and improve the
business environment.
 LIMITATIONS

Pakistan's economy faces several limitations that pose significant challenges to

its development and growth. Here are some of the key limitations:

1. Dependence on agriculture: Pakistan's economy remains highly

dependent on agriculture, which employs nearly 40% of the labor force
and accounts for a significant share of the country's exports. However,
the sector is vulnerable to weather shocks, and its productivity is low
compared to other developing countries.

2. Low level of industrialization: Pakistan's industrial sector remains

underdeveloped and lacks the scale and sophistication needed to
compete in global markets. This limits the country's ability to create
employment opportunities, enhance productivity, and diversify its
exports.

3. Energy crisis: Pakistan's energy crisis has been a significant limitation

to its economic growth, as the shortage of electricity and natural gas has
adversely affected the industrial sector and led to reduced economic
activity.

4. High levels of poverty and inequality: Pakistan has high levels of

poverty and inequality, which limit the ability of its citizens to access
education, healthcare, and other essential services. This, in turn, limits
the country's human capital development and hinders its economic
growth potential.

5. Political instability: Pakistan's political instability has been a significant

limitation to its economic development, as it creates uncertainty and
discourages investment, both domestic and foreign.

6. Limited access to finance: Pakistan's financial sector remains

underdeveloped, with limited access to finance for small and medium-
sized enterprises. This limits the ability of entrepreneurs to invest in
new ventures and expand their businesses, hindering economic growth.

7. Weak institutions: Pakistan's institutions, including the tax system,

regulatory bodies, and governance structures, are weak and often lack
the capacity to enforce laws and regulations effectively. This creates an
unfavorable business environment and discourages investment.

Addressing these limitations will require a sustained effort on the part

of policymakers, the private sector, and civil society to implement
policies and reforms that promote macroeconomic stability, enhance
productivity and competitiveness, reduce poverty and inequality, and
strengthen institutions.
 SUGGESTIONS AND RECOMMENDATIONS

Pakistan's economy faces several challenges, but there are several suggestions
and recommendations that can help address these challenges and promote
sustainable economic growth. Here are some key suggestions and
recommendations:

1. Address macroeconomic imbalances: The government needs to address

macroeconomic imbalances such as high inflation, a large fiscal deficit,
and a low level of foreign exchange reserves. This can be achieved by
reducing government spending, increasing tax revenues, and promoting
exports.

2. Enhance the business environment: The government should improve

the business environment by reducing bureaucratic red tape,
simplifying regulations, and promoting ease of doing business. This can
encourage investment, boost productivity, and create employment
opportunities.

3. Diversify the economy: Pakistan's economy needs to diversify beyond

agriculture and textiles to more advanced sectors, such as information
technology, biotechnology, and renewable energy. This can help
increase productivity, promote innovation, and create high-quality
employment opportunities.

4. Invest in human capital: The government should invest in human

capital by improving access to education and healthcare, especially in
rural areas. This can help reduce poverty and inequality, increase
productivity, and create a more skilled workforce.

5. Promote financial inclusion: The government should promote financial

inclusion by increasing access to formal financial services, such as
savings accounts, credit, and insurance. This can help reduce poverty
and inequality and promote entrepreneurship and economic growth.

6. Address the energy crisis: The government needs to address the energy
crisis by promoting energy efficiency, investing in renewable energy
sources, and improving the efficiency of the energy sector. This can
 help reduce the cost of energy, increase productivity, and create
employment opportunities.

7. Strengthen institutions: The government needs to strengthen institutions

by promoting transparency, accountability, and good governance. This
can help create an environment that is conducive to investment, reduce
corruption, and promote sustainable economic growth.

These suggestions and recommendations require a sustained effort from

the government, the private sector, and civil society to implement
effectively. However, if implemented correctly, they can help address
the challenges facing Pakistan's economy and promote sustainable
economic growth and development.
 CONCLUSION

In conclusion, Pakistan has faced several economic crises over the years,
including high inflation, low foreign exchange reserves, and a large fiscal
deficit. The COVID-19 pandemic has further exacerbated these challenges,
leading to an increase in unemployment and poverty.

Despite these challenges, there are also opportunities for Pakistan's economy,
such as its young and growing population, its strategic location, and its natural
resources. To take advantage of these opportunities and address the challenges
facing the economy, the government needs to implement a range of policies,
such as promoting macroeconomic stability, improving the business
environment, diversifying the economy, investing in human capital, promoting
financial inclusion, addressing the energy crisis, and strengthening institutions.

However, implementing these policies will require sustained effort, political

will, and the support of all stakeholders, including the government, private
sector, and civil society. If these policies are implemented effectively, they can
help promote sustainable economic growth and development in Pakistan,
reduce poverty and inequality, and improve the standard of living for all
Pakistanis.
 BIBLIOGRAPHY

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cts_of_Financial_Crisis_on_Pakistan_Economy_An_Empirical_
Approach accessed on 22/04/2023.

3. https://en.wikipedia.org/wiki/2022%E2%80%932023_Pakistani
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an's%20economic%20freedom%20score%20is,the%20world%2
0and%20regional%20averages accessed on 25/04/2023.

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Risks/Pakistan accessed on 27/04/2023.

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7. https://assets.kpmg.com/content/dam/kpmg/pk/pdf/2022/06/Paki
stan-Economic-Brief-2022.pdf accessed on 03/05/2023
 ANNEXURE

Annexure: Impact of Pakistan's Economic Crisis on Economy

The economic crisis in Pakistan has had a significant impact on the country's
economy, leading to a range of challenges such as high inflation, low foreign
exchange reserves, and a large fiscal deficit. Here are some of the key impacts
of the economic crisis on Pakistan's economy:

1. High Inflation: The high inflation rate has had a significant impact on
the purchasing power of the people, especially those living below the
poverty line. The increase in prices of essential commodities has made
it difficult for the common people to meet their basic needs.

2. Low Foreign Exchange Reserves: Low foreign exchange reserves have

made it difficult for the government to finance its imports and debt
repayments. This has led to a decline in the value of the Pakistani
rupee, which has made imports more expensive and exports less
competitive.

3. Large Fiscal Deficit: The large fiscal deficit has led to a higher debt
burden, which has resulted in a decrease in public investment. The
reduction in public investment has led to a decline in the development
of infrastructure, education, and health facilities.

4. Unemployment: The economic crisis has resulted in a higher rate of

unemployment, especially among the youth. The lack of job
opportunities has led to social unrest and an increase in crime rates.

5. Poverty: The economic crisis has resulted in an increase in the poverty

rate in the country. The high inflation rate and the lack of job
opportunities have led to an increase in the number of people living
below the poverty line.

6. Decline in Investment: The economic crisis has led to a decline in

domestic and foreign investment in the country. The lack of investment
has resulted in a decline in productivity, which has had a negative
impact on economic growth.
7. Decline in Business Confidence: The economic crisis has resulted in a
decline in business confidence, which has led to a decrease in the
number of new businesses being established. The decline in new
businesses has resulted in a decline in employment opportunities.

8. Education and Healthcare: The economic crisis has had a significant

impact on education and healthcare facilities in the country. The
reduction in public investment has led to a decline in the development
of these sectors, which has had a negative impact on the quality of
education and healthcare.

Overall, the economic crisis has had a significant impact on Pakistan's

economy, leading to a range of challenges such as high inflation, low
foreign exchange reserves, and a large fiscal deficit. Addressing these
challenges will require a sustained effort from the government, the
private sector, and civil society to implement effective policies that can
promote sustainable economic growth and development.