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Exceptionally high’ economic risks exist in Pakistan, according to an IMF report

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Pakistan, like many countries, faces a range of economic challenges that impact its growth, stability, and development. A recent report from the International Monetary Fund (IMF) has drawn attention to the existence of “exceptionally high” economic risks in Pakistan. This blog aims to examine the key findings of the IMF report, explore the underlying factors contributing to these risks, and discuss the potential implications for Pakistan’s economy.

Pakistan: IMF Bailout Should Advance Economic Rights

Pakistan’s recent agreement with the International Monetary Fund (IMF) for a bailout package presents an opportunity to advance economic rights and improve the well-being of its citizens. As the country faces significant economic challenges, including a high fiscal deficit and external imbalances, the IMF’s financial assistance can provide much-needed stability and support for Pakistan’s economy. However, it is crucial that the bailout conditions are designed with a focus on protecting and promoting the economic rights of the most vulnerable populations. This includes ensuring access to essential services such as education, healthcare, and social protection programs, while also addressing income inequality and promoting inclusive economic growth. By prioritizing economic rights in the implementation of the IMF bailout, Pakistan can create a more equitable and sustainable economic system that benefits all its citizens.

The IMF Report: Identifying Exceptionally High Risks

The IMF report highlights several critical factors that contribute to the exceptionally high economic risks faced by Pakistan. These include fiscal imbalances, a fragile external position, elevated public debt, and structural issues. The report emphasizes the need for decisive policy actions to address these challenges and enhance economic resilience.

Fiscal Imbalances: Pakistan’s fiscal deficit, driven by a mismatch between government revenues and expenditures, poses a significant risk to the economy. The report underscores the importance of fiscal consolidation measures to bring spending in line with revenues and reduce reliance on borrowing.

Fragile External Position: Pakistan’s external accounts face vulnerabilities, including a high current account deficit, limited foreign exchange reserves, and external debt repayments. The IMF report stresses the need to improve the country’s export competitiveness, attract foreign direct investment, and enhance foreign exchange inflows.

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Elevated Public Debt: Pakistan’s public debt burden has been rising, raising concerns about debt sustainability and servicing capacity. The report highlights the importance of debt management strategies, fiscal discipline, and revenue mobilization to address this issue effectively.

Structural Challenges: The IMF report also identifies structural issues that hamper Pakistan’s economic growth potential, including weak governance, inefficiencies in the energy sector, and low productivity. Addressing these challenges requires comprehensive reforms to improve governance, enhance the business environment, and boost productivity across sectors.

Implications and the Way Forward

The IMF report’s findings indicate that addressing the exceptionally high economic risks in Pakistan requires concerted efforts from the government, policymakers, and relevant stakeholders. Failure to take prompt and effective measures could result in increased vulnerability, hinder economic growth, and impede progress towards social development goals.

To navigate these challenges, Pakistan must prioritize the following actions:

Fiscal Discipline and Reforms: Implementing sound fiscal policies, including revenue enhancement, expenditure rationalization, and effective public financial management, is crucial for long-term fiscal sustainability.

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Strengthening External Resilience: Encouraging exports diversification, attracting foreign investment, and improving the balance of payments position are essential for reducing external vulnerabilities and enhancing economic stability.

Debt Management: Instituting prudent debt management practices, including prioritizing concessional borrowing, monitoring debt levels, and ensuring debt repayment capacity, is critical to mitigate the risks associated with the country’s debt burden.

Structural Reforms: Undertaking comprehensive structural reforms to improve governance, enhance the business environment, promote competition, and increase productivity across sectors will support sustainable and inclusive economic growth.

The IMF report highlighting “exceptionally high” economic risks in Pakistan serves as a wake-up call for policymakers and stakeholders to take swift and decisive actions. Addressing fiscal imbalances, strengthening the external position, managing public debt, and implementing structural reforms are vital steps towards achieving sustainable economic growth, stability, and resilience.

By embracing prudent economic policies, fostering an enabling business environment, and prioritizing governance reforms, Pakistan can navigate these challenges and unlock its full economic potential. It is through concerted efforts and collaboration that the country can pave the way for a prosperous future, ensuring improved living standards and opportunities for its citizens.

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Donald Trump declares that “winning over” the South Bronx, a Democrat stronghold, was a “lovefest” with a sizable turnout.

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Donald Trump, the former US president, staged a boisterous rally in the South Bronx on Thursday. In an attempt to win over minority voters, he sought to target one of the most Democratic counties in the country; he claims that the outcome was a huge victory for the campaign.

Days before a Manhattan jury is scheduled to deliberate on felony charges in his criminal hush money trial, the rally in Crotona Park was his first significant campaign appearance in New York since 2016.

Trump spoke to a boisterous assembly of supporters, many of whom were Hispanic and Black. He presented himself as President Joe Biden’s inferior when it came to representing minority groups, particularly when it came to immigration-related matters. Even though the park can only hold 3,500 people, thousands more congregated outside.

“Build the wall” cries from the audience followed Trump’s statement that “the biggest negative impact of the influx of migrants in New York is against our Black population and our Hispanic population who are losing their jobs, losing their housing, and losing everything they can lose.”

Trump stated as he concluded his speech that he was unsure of the welcome he would receive in the Bronx when he got up on Thursday.

“I said, ‘I wonder, will it be hostile or will it be friendly?’” he replied. “It was quite cordial. It was an extravagant romantic event.

Importance of South Bronx’s big turnout for Trump
In New York City, the Bronx has historically been the most Democratic borough. In 2012, Barack Obama received the greatest percentage of votes in the borough—91.2%—of any state. In 2020, Biden secured 83.5% of the borough. Merely 16% of the vote went to Trump.

There were also protests, with union members holding posters that said, “The Bronx says no to Trump,” and the Bronx Democratic Party hosting a counter-event. State Representative Amanda Septimo, a Democrat, denounced Trump’s visit and charged that he was taking advantage of the community’s problems without providing answers.

According to U.S. Census data, the area Trump visited is predominately non-white, with 31% of population being Black and 65% of residents being Hispanic. Roughly 35 percent of people are impoverished.

Trump’s New York campaign for the presidency
While he is confined to New York awaiting his trial, Trump has scheduled a number of local events, including this rally. He’s been to a firehouse, a construction site, and a bodega in Harlem in the last six weeks, but this was his first public gathering in the Bronx.

Rep. Byron Donalds, a Republican from Florida and possible running mate, stated at the rally, “The strategy is to show the voters of the Bronx and New York that this isn’t your typical presidential election.” “To represent everyone and put our nation back on track, Donald Trump is here.”

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During his speech, Trump attacked Biden’s handling of the problems facing New York City, such as the filthy subway system, the abundance of needles lying around, and the difficulties presented by immigrants. Trump claimed, “Joe Biden is not getting the job done for the Bronx.” “Our subways look worse than a Third World country, are filthy and dangerous, and the ceiling tiles are falling down.”

Reactions from Bronx residents to Trump’s meeting are varied as thousands assemble.
There were demonstrations against Trump, despite the fact that many residents agreed with his message. Longtime Bronx residents Margarita Rosario and Muhammad Ali, an immigrant from Bangladesh, expressed their dissatisfaction with the current government and their confidence in Trump’s capacity to change their financial circumstances.

With placards reading, “The Bronx says no to Trump,” some demonstrators accused the president of taking advantage of the problems facing the neighbourhood without providing answers.

The Trump team thinks he can weaken the support that Biden has among Hispanic and Black voters, especially among younger males who are dissatisfied with their economic opportunities. In addition, he made the argument—vehemently disputed by Biden’s allies—that his legal struggles make him accessible to Black voters fed up with the criminal justice system.

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Emmanuel Macron of France on AI: “Work will undergo a revolution, both good and bad”

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In an effort to combat inequality, Emmanuel Macron called for a worldwide wealth tax while applauding France’s digital sector and stating that it has the ability to spur economic growth and social mobility. Emmanuel Macron called technology a “key factor of transformation of our economy” in a CNBC interview. “It provides growth, it provides innovation…it created a lot of opportunities for qualified and unqualified people,” he stated in reference to France’s “Choose France” event.

“Artificial intelligence will be a revolution for work, for good and bad,” declared Emmanuel Macron, acknowledging the effects of AI on the workforce and raising worries about it. Okay, there’s no doubt about it now that productivity will rise.However, it will force us to change a lot of our qualifications.

The president of France expressed his goal for his nation to lead the world in artificial intelligence (AI) and recognised the necessity of “accelerating, innovating, and investing.” He also emphasised the significance of international cooperation in AI regulation, saying that “regulating at the appropriate scale, meaning the global one.”

He stated that we must make sure AI advances mankind rather than acting as a “substitute of humanity.”

“The more AI companies choose to locate in Europe, the more the European governments will find themselves in a similar situation as the governments of the United States and China,” he continued. Our problem with AI is to invest, innovate, and accelerate while still regulating at the right scale.”

After US Treasury Secretary Janet Yellen referred to the idea of a wealth tax as “a pity,” he addressed income disparity and stated that “having a wealth tax is a global debate” and that it would be a successful solution.

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Is Joe Biden or Donald Trump? US stock market expert forecasts unexpected outcome of presidential poll based on movement of indices

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Who will win the US election that is set for November 5, 2024? Given the intense rivalry between Joe Biden and Donald Trump, the stock market has historically shown itself to be a trustworthy predictor.

President Joe Biden’s odds of winning re-election vary widely, ranging from less than 38% to as high as 76%, according to recent surveys of well-known prediction markets.

Trump has a 45% chance of winning the poll, compared to Biden’s 44% chance, according to an Economist survey.

The poll prediction’s methodology

In order to obtain understanding of substitute indicators, Mark Hulbert carried out a study that included a range of financial, sentiment, and economic metrics. The real GDP, the Conference Board’s consumer confidence index, the University of Michigan’s consumer sentiment survey, and the U.S. stock market were all included in this analysis, with an emphasis on how each had changed year over year before Election Day.

The stock market was the only one of these indicators to show a statistically significant correlation with the likelihood of victory of the incumbent party at the 95% confidence level.

Analysis results indicate that Joe Biden will win.

His research demonstrates a strong correlation between the stock market’s year-to-date performance and the likelihood that the current party will win the presidency. He demonstrates how this correlation is supported by historical data going back to the Dow Jones Industrial Average’s founding in 1896.

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President Biden’s odds of winning reelection are 58.8% based on this historical correlation and the Dow’s current year-to-date price-only gain of 5.6%. If there are any more gains or losses in the stock market before Election Day, these odds will change appropriately.

Hulbert contends that it’s difficult to make the case that electronic prediction markets have better track records than the stock market, even in the absence of their ambiguity. It is more difficult to identify statistically significant patterns with small sample sizes. As an illustration, the Iowa Electronic Markets (IEM), one of the earliest prediction tools, has only been used in nine presidential elections since its founding in 1988.

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