Pakistan’s finance minister Dr. Abdul Hafiz Sheikh
presented federal budget 2012-13 on June 01, 2012. The total outlay of
budget 2012-13 is Rs. 3,203 billion which is 15.8% higher than the size
of previous budget 2011-12. Comparison of two budgets reveals that the
total government expenditures have increased by 15.20% from Rs.
2,835,373 million to Rs. 3,266,307 million out of which development
expenditures have increased by 25.83% from Rs. 354,872 million to Rs.
446,539 million. According to Economic theory,
if government expenditures increase, generally economy flourishes
but Pakistan is an exception to
the rule. In every budget, government expenditures increase but our
economy is not showing any positive response. This budget has also been
presented in a situation when the condition of our economy is not at a
satisfactory level. Despite increase
in government expenditures, Pakistan economy has been facing
unemployment, acute energy crisis, inflation, poverty and trade deficit
for many years.
Requirement:
Think as an economist and discuss the reasons why is Pakistan economy not showing any positive change despite the increase in government expenditures?
Idea Solution:
Please keep in mind the following points when you are solving this GDB.
1. Political instability in our country
2. Energy crises
3. Law and order situation
4. Inflationary pressure
5. World bank and IMF loans
6. International influence in our economic polices
Requirement:
Think as an economist and discuss the reasons why is Pakistan economy not showing any positive change despite the increase in government expenditures?
Idea Solution:
Please keep in mind the following points when you are solving this GDB.
1. Political instability in our country
2. Energy crises
3. Law and order situation
4. Inflationary pressure
5. World bank and IMF loans
6. International influence in our economic polices
