In early July, the PML-N led government released the budget for 2024-25. While the government and its supporters hailed the budget, experts and analysts are skeptic and concerned.
According to Yusuf Nazar, former head of Citigroup’s emerging markets, the budget represents “the highest-ever increase in the overall burden of taxes and levies on the people both in absolute and percentage terms. This will severely hurt the economy across all sectors and the GDP growth could fall to less than 2.0 per cent with average incomes falling for 90 per cent of the people both in nominal and real terms.”
Nazar notes that “Pakistan has lost a decade to bitter and polarizing political conflicts and poor governance. The economy has suffered and the working classes have been hit hard. Anybody who can seems to be leaving the country.”
Nazar also challenges the “claims of economic growth by the PML-N and PTI” as he notes “growth has been volatile and uneven across social classes as these parties presided over record current account deficits, stagnant tax revenues and as a consequence, a steady rise in government borrowings, for which people are paying a heavy price through falling real incomes and higher cost of living.”
Nazar points out that unlike their Sri Lankan counterparts, “Pakistan’s governing elites did not learn any lessons from the 2022-23 economic crisis, which took the country to the brink of bankruptcy. Despite the rhetoric, their refusal to take concrete steps to reform a rent-seeking economy is shocking because they have the most to lose.”
In conclusion, Nazar warns “religious fanaticism and populist fascism combined with politically expedient state policies have played havoc with the social fabric of society. Widespread intolerance and bigotry in the backdrop of the rise of ahistorical, culturally barren, and poorly educated generations are turning large segments of society into lynch mobs who threaten to take the country backwards as it continues its seemingly inexorable march toward self-annihilation while its top leadership seems to be lost and obsessed with debilitating power games.”
