Prime Minister Imran Khan showed he was an optimist at the 14th International Summit of Chambers, when he said the economy was showing signs of a turnaround, because the inflation figure for December was lower than that for November. He continued with his mantra, which consists of two parts: there isn’t any inflation, which is just an opposition scare, and any inflation has been caused by the rise in global commodity prices. Mr Khan’s cherrypicking of the statistical evidence is to say the least, problematic. A leader needs to be realistic when making economic decisions. If he is out of touch with the on-ground situation, then his decisions are going to be bad.
Surely Mr Khan has someone among his economic team who could tell him that a single swallow does not a summer make, and a dip in the monthly inflation figure does not represent an improvement in the economic situation, not unless it is taken with other economic benchmarks, such as the current account deficit. The World Bank prediction of Pakistan’s GDP growth this year is 3.4 percent, which is at best anaemic, even keeping the covid-19 pandemic in mind, and downright disastrous. It is certainly not the rate of an economy on the path to recovery.
Mr Khan himself identified boosting exports and tax collection as important indicators. Boosting exports is not the matter of removing a few hurdles as Mr Khan seems to think it is. As for tax collection, the government’s record has been patchy, and whatever measures it has taken have usually backfired or have been rendered ineffective. Mr Khan continues to try and win the support of the business community, even though the demand is that it be allowed to get away with tax theft. It is true that some of that reluctance to pay taxes is because of a feeling that the government does not provide the services it should, but the government has made only cosmetic directions in this area. Mr Khan can be selective about the data he picks to show his economic performance as adequate, but whether the voter agrees or not, is another matter.