KARACHI:
Analysts and market pundits have described 2024 as the most volatile year locally and globally because of elections, energy crises, tough conditionalities of the International Monetary Fund (IMF) programme, and the lack of clear directions from the upcoming government to address prevailing challenges.
They said all local mainstream political parties contesting the general elections in the country in February should provide their economic stability plans to avert further losses and delays. They also warned that numerous global issues are impacting world economies.
Talking to The Express Tribune, they said the upcoming government should prioritise resolving the energy crisis by providing sufficient and affordable electricity and gas to industries. The import bill should be reduced by imposing bans on luxury products. They highlighted controlling inflation to ensure affordable living costs for the masses and containing the cost of production for businesses at a local level. They pleaded for formulating economic plans aimed at reviving growth in large-scale manufacturing, small and medium-sized segments, the service sector, and exports.
“2024 is the most volatile year in both local and global scenarios. This is not business as usual this time [2024], although some stability and macro-economic situation augur well. Local challenges include energy crises, high taxes, higher interest rates, ballooning loans that have dented new investor confidence. Global issues consist of conflicts between Russia and Ukraine, Hamas and Israel, and tension between Taiwan and China, US and China. They [global problems] could bring about a recession. Above all, general elections are being held in more than 40 countries worldwide,” said analyst and Alpha Beta Core CEO Khurram Schehzad.
“New political parties call for a fully-fledged and sound plan with a highly competent team to handle local challenges forthwith, but unfortunately, they have no solid plans or directions. Whether there is a majority or coalition government, it will have to work on a comprehensive plan that can restructure and convert the new IMF programme to economic stability. The IMF does not seem to give a big programme so easily in the future,” he said.
Read Pakistan needs ‘careful’ economic management to get macroeconomic stability: WB
2023 could be divided into two parts, as a tough time was witnessed until June when there was no IMF programme, and the country was near default. Then the IMF programme came, the caretaker setup took over, and the first review of the IMF went better, he said, adding that the second review of the IMF on track would be good. He said when it comes to the second half of 2023, it has brought macro-wise stability relatively.
Syed Raza Hussain, an industrialist and President of the Federal B Area Trade and Association (FBATI), foresees a new year full of challenges for businesses and industries in Pakistan due to political uncertainty on global and local fronts.
“Although 2024 is considered the year for general elections, fears are looming for a possible political crisis in the country. In this situation, the Special Investment Facilitation Council (SIFC) must play its role in building confidence in the investment climate to maintain the economic stability of the country in the next few years.
The incumbent government should come up with drastic measures to give confidence to local industrialists-cum-entrepreneurs and foreign investors through industry-friendly and investment-friendly policies. In this regard, the interest rate should be gradually reduced by 50% to 11% to boost economic activity and industrialisation within the country,” he said.
He said on the global front, the tense situation between Palestine and Israel can continue to destabilise the geopolitical and geo-economic situation, particularly through an upsurge in crude oil prices.
2024 is also called election year as approximately 60 countries including Pakistan, India, Iran, Bangladesh, Sri Lanka, USA, UK, Russia, Ukraine, many European countries will hold general elections.
Published in The Express Tribune, January 5th, 2024.
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