Daily Times

Shares at the Pakistan Stock Exchange have lost much of their value amidst political instability in the country. Moreover, the uncertainty regarding the IMF program has also resulted in a decrease in value. The drop in share value is one of the crucial indicators that shows the collapse of an economy. Stock market crashes take economies into deep recessionary phases, and if Pakistan is nearing a crash, it will be better if everyone is prepared for it.

Political turmoil has always been a catalyst for economic downturns and crashes. Around the world, states with poor political systems suffer economically as well. In their book, Pakistan came into being 75 years ago, and it has still not found a concrete footing on the political front. The sham democracy and the military-bureaucratic oligarchy have left the country in the state it is today. Rent-seeking is on the rise, and people have lost all faith in the system. Most of this can be blamed on the political turmoil the country got been in since the fall of the PTI government this year.

When political turmoil ensues, businesses and investors become increasingly wary of investment opportunities, leading to a decrease in capital flows into the country. This can lead to an erosion of foreign currency reserves and a lack of access to foreign credit. Without access to financing, businesses are unable to invest in new projects or expand existing operations, which can cause an economic downturn. This can also lead to higher unemployment and a decrease in consumer spending as people choose to save money instead of spending it. The long-term effects of political turmoil on economic stability can be especially damaging when combined with other factors such as a weak currency, rising inflation, or declining export revenues, all of which Pakistan is currently facing. Countries that experience significant levels of political turmoil may find themselves unable to access foreign loans or investments for development projects, further destabilizing their economies and reducing their ability to recover from any shocks.

In order for Pakistan’s economy to remain stable during times of political upheaval, it is important for the government to take steps to ensure that key institutions remain intact and functioning properly. Governments should also take steps to ensure that investors have confidence in their economy by providing clear guidance on fiscal policies, promoting structural reforms, and investing in infrastructure projects. Additionally, it is important that the government work with the International Monetary Fund in order to provide assistance during this time of crisis. *