An Analysis of Pakistan's Macroeconomic Situation and Prospects

Publication | December 2008

This paper analyzes Pakistan’s macroeconomic developments during the last few years. The increasing budget and current account deficits led to a situation of near bankruptcy.

During the latter part of 2007 and early 2008, it became obvious that Pakistan's macroeconomic situation was deteriorating rapidly, and that unless immediate measures were taken, the country may slip into a balance of payments crisis. This paper analyzes Pakistan's current macroeconomic economic situation, in particular the sizeable budget and current account deficits. It also discusses the effects of the surge in food and oil prices. The paper also evaluates the government's response to the deteriorating conditions and proposes a number of policy measures.


  • Pakistan's Macroeconomic Situation
  • Deteriorating Global and Macro Conditions in 2008
  • Government Response to the Deteriorating Macroeconomic Situation
  • Policy Recommendations
  • Conclusions
  • Appendix: The Relationship between Inflation, Growth, and Inequality
  • References

Additional Details

  • Economics
  • Pakistan
  • 1655-5252 (print)


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