Dr Qadri and C/A ‘imbalance’

Apropos ‘Qadri seeks to sow new doubts about system’, Business Recorder needs to be reminded that whatever Dr Tahirul Qadri said at the Lahore rally was nothing but truth. His analysis of country’s economy and the suggestions that he proffered need to be examined by the government with an open mind. Every area of economy seems to be under severe stress. Though Dr Qadri does not go really deep into the ramifications of a bad economy, his concerns are legitimate. For example, take country’s current account; it has been experiencing a severe deterioration. The current account balance has come under heavy pressure during FY14. According to the latest data released by the State Bank, the C/A deficit swelled to dollar 1.88 billion during the first five months of 2013-14 (July-Nov) as compared to the deficit of dollar 684 million in the corresponding period last year, depicting an increase of dollar 1.2 billion or 175 percent. The main component of ballooning deficit was the widening gap in the goods and services accounts.

As argued by Business Recorder in one of its recent editorials, the latest data on current account is definitely very disturbing for a number of reasons. It is easy to understand that the continuation of the present trend would lead to a further loss of foreign exchange reserves which are already at a dismally low level, depreciation of the exchange rate of the rupee and strengthening of inflationary expectations. The Ishaq Dar-led economic team is required to expend all its energies towards bringing about a marked improvement in country’s macroeconomic indicators without any further loss of time. Many thanks to Dr. Qadri and Business Recorder for making a wake-up call.

KARACHI NASIR TARIN

Source: http://epaper.brecorder.com/2014/01/01/18-page/531728-news.html