Renowned economist Atif Mian has claimed that the $350 billion Pakistani economy is in a "tailspin, sliding from crisis to catastrophe" as the country dangles in the balance between a default and an IMF rescue.
"The system is unhinged," Mian said, adding that this is evident in the growing stagflationary dynamics, in which GDP is falling off quickly and prices are rising quickly.
These are "extremely troubling" signals, the economist cautioned in a comprehensive thread on Pakistan's economy posted on his Twitter account.
https://twitter.com/AtifRMian/status/1643393358428266496?s=20
According to him, "foolish policy choices" that have negatively harmed the economy's ability to produce goods and services are also contributing to inflation.
The State Bank of Pakistan (SBP) increased its benchmark interest rate to a record 21% a day earlier as inflation accelerated to a new record in March months as a result of tax and energy price increases as well as government-sanctioned currency depreciation to comply with IMF requirements and restart a $6.5 billion program.
Economist Atif Mian emphasized that the "greater danger now is that the entire system is spiraling out of control."
He stated on Twitter that "we are witnessing the kind of uncertainty that leads to the flight of both money and humans, placing downward pressure on supply."
https://twitter.com/AtifRMian/status/1643393358428266496?s=20
He referred to the ongoing political and constitutional difficulties in the nation and stated, "Judiciary, politicians, and generals—in the last couple of years, we have witnessed a degree of turmoil, infighting, and scrambling for selfish power grabs that have brought the country to this calamity."
Pakistan can then get funds from other international and bilateral donors while the coalition government tries to persuade the IMF to issue the next tranche.
The people struggle to make ends meet, meanwhile, with inflation at an all-time high and foreign currency reserves barely covering a month's worth of imports.
"The system is unhinged," Mian said, adding that this is evident in the growing stagflationary dynamics, in which GDP is falling off quickly and prices are rising quickly.
These are "extremely troubling" signals, the economist cautioned in a comprehensive thread on Pakistan's economy posted on his Twitter account.
https://twitter.com/AtifRMian/status/1643393358428266496?s=20
According to him, "foolish policy choices" that have negatively harmed the economy's ability to produce goods and services are also contributing to inflation.
The State Bank of Pakistan (SBP) increased its benchmark interest rate to a record 21% a day earlier as inflation accelerated to a new record in March months as a result of tax and energy price increases as well as government-sanctioned currency depreciation to comply with IMF requirements and restart a $6.5 billion program.
Economist Atif Mian emphasized that the "greater danger now is that the entire system is spiraling out of control."
He stated on Twitter that "we are witnessing the kind of uncertainty that leads to the flight of both money and humans, placing downward pressure on supply."
https://twitter.com/AtifRMian/status/1643393358428266496?s=20
He referred to the ongoing political and constitutional difficulties in the nation and stated, "Judiciary, politicians, and generals—in the last couple of years, we have witnessed a degree of turmoil, infighting, and scrambling for selfish power grabs that have brought the country to this calamity."
Pakistan can then get funds from other international and bilateral donors while the coalition government tries to persuade the IMF to issue the next tranche.
The people struggle to make ends meet, meanwhile, with inflation at an all-time high and foreign currency reserves barely covering a month's worth of imports.