After a number of hiccups to his popularity since his coming into power, it can be seen that he is once again becoming popular among domestic Pakistanis since the last few weeks especially. While most of this increase in his approval ratings can be attributed to his populist rhetoric of a corrupt (looterey) opposition being party to a conspiracy (amreeki saazish) against his government, some of his proponents argue that it is because of the economic “recovery” that Pakistan has seen under his three and a half years in power.
Their first major argument is the increase in exports of Pakistan. And this argument is largely true: Pakistan has already had exports of over $31B so far in this fiscal year, and is expected to have exported around $38B by the end of it. These are unprecedented numbers for Pakistan. But there’s another side to this rosy picture of rising exports, and that is of the rising imports bill. Not only has Pakistan had historic exports this year, but imports are at an all time high as well. Pakistan’s trade deficit is expected to cross an unprecedented level of $50B this FY. This means that the entire benefit that increased exports were supposed to provide have been neutralized by the massive increase in trade deficit and it has not really benefited Pakistan much at all.
Another praise that Imran Khan’s economic team gets for is its performance in relation to the current account. Current account deficit, at this moment in time, is largely under control as Pakistan saw a net current account deficit of only $1B for the month of March (2022). But the only reason a large current account deficit is not recommended is because it puts a country’s foreign exchange reserves under pressure. Pakistan’s state bank reserves however, are under pressure even without it having a large current account deficit at the moment. As of April (2022), its reserve stand at only $11B (barely enough to sponsor 2 months of imports) and that too because the UAE and China both rolled over loan repayments of $2.5B each. So even a small current account deficit under the Khan administration has not benefited Pakistan by much.
Also, these dwindling foreign reserves mean that the rupee is under immense pressure as could be seen by the fact that the rupee reached a historic low of 190/USD by the end of the first week of April (2022). This slide in the value of Pakistan’s currency would only exacerbate the already very big problem of inflation in the country (inflation during almost the entire tenure of the Khan government has been in double digits). The fast depreciating rupee also meant that the per-capita income of Pakistanis also came down during these same years.
Yes, the Imran Khan government did do a few good things during its tenure (the Health Card being the biggest example), its overall performance in terms and governance and economic recovery has been below par. We can only hope that whoever comes into power after this latest political crisis is dealt with will do a better job of managing the economics of this poor country.