What are The Economic Challenges Pakistan is Confronting for Burgeoning its Economic Development

Abstract

Economics is the coherent study of how scarce and scant resources are apportioned to accomplish the interminable yearning of consumers; we can say economics is the cognition to tackle unfettered aspirations with precise resources. One of the pre-requisite and vital components that drive and trigger the burgeoning of a state is the development and blossoming in the economic sector, which creates new job opportunities and facilitates an improved quality of life that includes increased access to opportunities created by economic growth for existing and future residents. Between 1960 till 1990 Pakistan is one of the top ten fast-growing countries with an annual average growth rate of 6 percent. The structure of the economy was also transformed during this period with the share of agriculture coming down from 50 percent to 20 percent. The subsequent 25 years have, however, brought about a significant decline in growth rates, and in more recent seven years, it has lagged other South Asian countries. This research paper aims to highlight the prevailing economic challenges the country is confronting, which include the banking system amalgamated with hefty interest, gyrating inflation, an escalation in the poverty rate, massive devaluation of the Pakistan rupee against the dollar and other major world currencies, increasing foreign loans, surging up of fuel oil prices, and curtailing up of the foreign currency reserves. The country’s primary problem and obstacle is the inability to raise domestic resources for financing development. The tax-to-GDP ratio remains low, and this means excessive reliance on foreign flows, which will also be discussed in the paper. As a result of the economic deterioration in Pakistan, the ratio of unemployment also boosts which is a burden on the backbone of the country’s economy, which will also be chewed over in this paper. Concluding the topic, it will be discussed how the Islamic Republic state of Pakistan will overcome its economic crisis by keeping both the current contemporary plan of action proposed by economists and Islamic strategies and approaches in the light of the Quran and Sunnah of The Prophet Muhammad P.B.U.H under consideration to amplify the economic growth of the country. The Qualitative Archival method will be used for the collection of data. Chicago Manual 2017 will be used for writing the paper.