2011 started with the Pakistani government more comfortable with the state of the economy than in quite a while. The country was doing a better job than most others in the world of containing the spread of the coronavirus. That enabled its exporters to open up earlier than the competition and capture commercial markets lost to them. And the freight blockade, also induced by the pandemic and the lockdown, also drove up prices of our products and earned us that much more foreign exchange. The current account was also finally in the green after the longest time and all seemed well for the year ahead. But things began to change around half-way through the calendar year; around the start of the new fiscal year. The budget, presented by the administration’s fourth finance minister, was unexpectedly expansionary and laced with tax-breaks and subsidies; implying strong confidence about growth momentum on the part of the country’s economic managers. But it soon turned out that the economy was still a lot more vulnerable than the finance ministry was willing to accept and IMF was not impressed enough by the concessions in the budget to dilute its strict structural adjustment’ requirements. That took the wind out of the budget and just as the subsidies are being withdrawn and additional taxes slapped pretty much across the board, consumers and especially investors that banked on those concessions and made business and financial decisions are getting their fingers very badly burnt. The rupee had already peaked in May, on the back of our interest rate being higher than much of the world and thus able to attract a lot of hot money initially, and has lost close to 20pc of its value since then. All subsequent efforts to increase exports have jacked up imports even more and pushed the trade deficit to historic highs. That’s put enough pressure on the current account to already miss the revised annual target, before half the fiscal is over. And very strict IMF prior conditions mean that flagship government initiatives, like the Ehsaas program, will also struggle to meet tall claims because of a very severe financial crunch. All in all, the year started on an optimistic note at least as far as the economy was concerned; but that initiative was lost half way and now we’re struggling even to revive the IMF bailout program. *