Our balance of payment in red.
Byline: Yusra Swaleh
Pakistani economy has always been facing a negative balance of payment in a shape of import, export, foreign exchange reserves, Foreign Direct Investment. Portfolio Investment and Remittances etc. since when Pakistan came in to being on the map of the world, since then Pakistan has to face heavily import. These heavily imports are badly affecting on the economy growth. What's more the payments of the all imports have to be made through all remittances this happened not for the first time. These happenings are the cause of decreasing the foreign cost on the goods and services. Thirdly, these are the cause of reducing foreign investment. This is impacting on the economic growth.
Pakistan balance of payments has remained under pressure during the decade of 1990s. The current account deficit, which was $ 2171 million or 4.8 percent of GDP in 1990-91 rose to $ 4575 million or 7.2 pc of GDP in 1995-96, under-represented in the history of Pakistan, mainly because of large prevailing in the services and trade accounts. However, it was reduced to $ 1921 million (3.1% of the GDP) IN 1997-98 due to substantial improvements in trade deficit but deteriorated by 23.9% to 2381 million in the next year (1998-99), mainly on account of economic sanctions. The deficit under services (net) narrowed by 21.3% in 1998-99 and private sectors transfers fell short of $936 million over the previous year's level of $ 3210 million. The trade deficit (based on exchange records) grew annually at an average rate of 2.9% while long term capitals (net) on a yearly average basis, amounted to $ 2234 million during 19909-91 to 1998-99
Musharraf Government took several measures after the current fiscal year (2000) to strengthen the balance of payment of Pakistan has improved a lot from 200-2007 During these years Pakistan govt. focused on strengthen the supply side from which the export had increased and balance of payment was improved. In 2005 Pakistan has achieved the highest GDP target.
Unfortunately, after the Musharraf government from 2007 to 2012 under the umbrella of democratic government Pakistan's balance of payment suffered badly due to corruption. Poor law and order side was affected and Pakistan's govt. could not achieve the export target and the above situation also affected the foreign direct and indirect investment very badly.