Inflation to debt: The economic mess Imran Khan leaves Pakistan in

Pakistanis got poorer under Khan's watch, with the future holding little promise

In 2018, when he was anointed the new Wazir-e-Azam of Pakistan, Imran Khan’s bold economic vision was touted as one that could rescue, resuscitate and reform the country. As he was ousted from power, the dreams that Khan peddled to the electorate remain a mirage.

When the Pakistani Rupee became one of the worst performing currencies in the world and inflation rates soared to squeeze millions into poverty, Khan went on record to say that he didn’t join politics to “know the prices of potatoes and tomatoes.” Clearly Pakistan’s former prime minister seems to have fallen out of touch with realities of the citizens who now stare at a bleak economic future in a charged geo-political climate.

At the time Khan took over the Rupee traded for around Rs 120 to a dollar. Today it has plummeted to over Rs 180 for every greenback. As imports become prohibitively expensive, domestic inflation rates have soared to an all-time high. According to official statistics, Khan inherited an economy when inflation hovered around seven per cent. In March 2022, that had doubled to touch historic highs. Rural food inflation had touched almost 16 per cent while soaring urban food inflation is pushing many aspirational middle class Pakistanis into poverty.

As the Russia-Ukraine crisis pushes energy prices higher, the soaring inflation in Pakistan has been exacerbated by declining growth. While fears of stagflation abound across the globe, it has been playing out in Pakistan with ferocity over the last couple of years. Inheriting a bruised but well growing economy, under Khan’s watch gross domestic product (GDP) growth was zero on an average in 2019 and 2020. In 2020-21, it managed to get back some of the lost steam by registering a 5.4 per cent growth, but it was barely enough to buoy an economy which was facing severe headwinds both internally and externally. In fact, an average Pakistani got poorer under Khan’s watch, with the future holding little promise until the next Prime Minister undertakes radical structural reforms in the economy.

Khan had entered office vowing to solve the country’s burgeoning debt problem. One of the first things Khan did after assuming office was to raise money by auctioning off everything – even former PM Nawaz Sharif’s buffaloes for few lakhs of rupees. The Saudis and the Emiratis were approached for financial aid and Khan managed to secure billions on lenient terms from the bell weather benefactors.

The International Monetary Fund (IMF), too, opened the gates so that Khan could put the economy back on track. But as things stand, while exports failed to pick up, its current account deficit ballooned to historic highs. In February 2022, it had touched a record $27 billion. While Khan managed to reduce the government’s debt to GDP ratio marginally, increased reliance on foreign aid meant that Pakistan now owes $122 billion- a third of its GDP - to various multilateral organisations and nations like China, Saudi Arabia, members of the Paris Club among others.