Pakistan avoids sovereign default

In 2024, Pakistan narrowly avoided a sovereign default and managed to stabilize the economy on the back of yet another International Monetary Fund (IMF) bailout package. But the New Year is roaring with challenges of retaining duty-free access to European markets and handling any policy shift by the United States.

Pakistan’s marginalized salaried class was pushed to the edge after, in a highly unjustifiable decision, the government and the IMF increased its tax burden to an unbearable level of 39%, forcing many people to think about their plans for the future. As a result, in July through November, the salaried class’s tax payments phenomenally jumped by 57% to Rs198 billion.

The economic decision-making remained fragmented between the dwellers of the Q Block the seat of the Finance Ministry, Prime Minister’s Office and the Deputy Prime Minister Office.  The government appointed Muhammad Aurangzeb as the country’s new Finance Minister who secured Pakistani nationality after taking oath of office. But the banker turned politician lost significant control to Deputy Prime Minister Mohammad Ishaq Dar who gradually sneaked into the economic decision-making.

Ishaq Dar is now taking decisions from gas imports to development budget approvals and taxation matters. (www.tribune.com.pk) 

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