Beyond Keyboard Warriors: What Economic Indicators Tell of PML-N and PTI Regimes
Political arguments often leave their essence, and fallacies take hold.
Drafting this piece occurred before the Supreme Court's verdict.
The ongoing political turmoil in Pakistan is unfolding new surprises almost every day. The alleged intervention of foreign powers in domestic politics has stirred the Parliament, judiciary, and the military. The Imran Khan-led-Pakistan Tehreek-i-Insaf (PTI) has called for early elections after the dissolution of the lower house, aka the National Assembly, followed by the joint opposition's failure to pass the No-Confidence Motion against the PTI-led government. It remains a matter of uncertainty whether elections will face preponement or not. However, this uncertainty did not abstain supporters (or accurately, keyboard warriors) of the traditional rivals (PTI and PML-N) from engaging in social media arguments, generally ridden with misinformation.
This misinformation also finds its way to misquoting the economic performance of both political parties in their regime. Numbers do not lie but misquoting them or completely neglecting them does the damage. With that said, governmental sites are cluttered, and their publications contain ambiguity. Hence, it becomes essential to communicate economic figures concretely and clearly. Ironically, “ambiguous” governmental sources are cited to establish concreteness in this piece.
Please note that the author will not assess each economic indicator nor issue a verdict in anyone's favor. The reader can best decide for themselves. The beauty of data is that it can speak for itself. We will precisely cover four indicators, namely:
Current account deficit (CAD)
Current Account Deficit (CAD)
The current account deficit (CAD) closely relates to the balance of payments. In the previous blog on The Lankan Economic Crisis Explained, we learned that the balance of payments comprises two kinds of accounts: capital account and current account.
A current account deficit implies that the import value exceeds the export value. Greenback (US Dollars) appreciation inflates the current account deficit. In short, the less the CAD, the better the economy.
The CAD, in 2018, stood at $17.994 billion. As Salman Siddiqui in the Express Tribune writes:
"The current account deficit, which remains the single largest challenge for economic managers, shot to a record high of $17.994 billion (5.7% of GDP) at the end of [the] fiscal year ended June 30, 2018, mainly due to exorbitant imports and less-than-projected inflows."
Contrary to that, in 2021, the deficit recorded a sharp 89.3 percent fall to $1.916 billion. Shahid Iqbal in Dawn writes:
"However, the rising deficit has put the country once again in trouble as it was in 2018 when the CAD was around $20bn. The PTI government succeeded to bring it down to $1.916bn in FY21, but the surging imports and higher external payments again pushed it up since the start of the current fiscal year."
Moreover, Siddiqui (Express Tribune) and Iqbal (Dawn) reported that the CAD recorded a monthly low of $545 million in Feb-2022. However, the CAD for 8MFY22 stood at $12.009 billion, as penned by Iqbal in the Dawn article.
Foreign exchange (Forex) reserves are not a conclusive economic indicator. A drastic increase in the reserves can hint toward a worsening economy, piling up loans. However, a sharp slash in reserves is evident of a feeble economy.
The dollar value of forex reserves in 2018 stood at 10.03 billion. An Express Tribune headline says:
"With the end of PML-N's term, SBP's reserves stand at just $10.03b."
As of March 25, 2022, a 20.1 percent increase in forex reserves to $12.047 billion occurred, as reported by Andaleeb Rizvi in The News International.
During the PML-N regime, from 2013 to 2018, tax revenues stood at Rs. 17.4 trillion. An annual breakdown of tax collection in the five years is as follows:
(Un)surprisingly, in the PTI regime of approximately four years, the tax revenues stood the same, i.e., Rs. 17.4 trillion.
Ministry of Finance - GoP
As far as foreign remittances are concerned, in 7MFY2018, $11.383 billion were remitted as per the Pakistan Remittance Initiative (PRI).
Halfway through 2022, the remittances for 7MFY22, with a 58.1 percent rise, stood at $18 billion, as Profit reports, "remittances at [a] record high for [the] current fiscal year."