Columnist

According to recent data publicized by the government, the energy sector’s circular debt will increase by Rs436 billion by June 2021. This implies that the total stock of circular debt at the end of the ongoing fiscal year will amount to an unprecedented Rs2.6 trillion.

It would be unfair to say that COVID-19 is the only factor putting the now and tomorrow of startups in Pakistan in danger. Most issues preventing sustainability of these firms have been around since long.

As the timeline of the pandemic extends and with developing countries likely to receive medical solutions with a delay relative to advanced countries, more job losses cannot be ruled out. 

The second wave of COVID-19 is beginning to show grave consequences for the lives and economy of Pakistan. Contrary to the first half of this year, the country is now consistently witnessing a higher number of daily deaths.

Pakistan’s forex reserves are now comfortably placed at around $20 billion and are being projected to remain on the upward trajectory during the medium term. This has contributed to good business sentiment and stability in the currency value.  

There are various channels through which economic losses materialize in a politically uncertain environment. The instability of the political system in a country is associated with lower productive capacities, reduced investment and trade flows.

Tweet: As Pakistan experiences second COVID-19 wave, the pandemic will continue testing limits of rule-based fiscal policy. A more robust debt management and oversight system must be in place, writes Dr Vaqar Ahmed