Atif Mian Warns Pakistan’s Economy is Getting ‘Unhinged’

Pakistan’s economy is a mess and the entire system is getting unhinged while the coalition government struggles to get a bailout from the International Monetary Fund (IMF).

Pakistani-American economist and former member of Pakistan’s Economic Advisory Council (EAC), Atif Mian warned on Twitter that Pakistan’s economy is in a tailspin, going from crisis to catastrophe and the system is becoming unhinged. “We can see this in the increasing stagflationary forces: growth is rapidly falling, and prices are rapidly rising,” he said.

Explaining his perspective on Twitter, Mian stated that inflation is not only being fueled by large deficits and money printing but foolish policy choices that have seriously impacted the productive capacity of the economy.

Citing pertinent examples from the past, the economist said, “The bigger worry now is that the entire system is getting unhinged,” adding that “we are witnessing the kind of uncertainty that results in flight of both capital and humans — pushing further downward pressure on supply”.

In his closing remarks, he said, “Judiciary, politicians, and generals – the last couple of years have witnessed a level of chaos, infighting, and jostling for selfish power grabs that have brought the country to this catastrophe.”

Pakistan is still trying to persuade the IMF to release the next tranche, after which it will be able to secure funding from other multilateral and bilateral donors.

However, with inflation at an all-time high and foreign currency reserves barely sufficient to cover a month’s worth of imports, it’s a tough road ahead.