Pakistan’s electricity supply companies caused a staggering loss of Rs660 billion to the national exchequer in the fiscal year ending June 30, 2024, according to a recent Dawn report. To put this in perspective, this figure is 11 times larger than the federal government’s Rs59.7 billion budget for higher education. The inefficiencies in the power sector have drained national resources, limiting the government’s ability to invest in key areas that benefit its 241 million citizens. While reforms are in progress, eliminating these losses is unlikely in the near term.
The inefficiencies lead to a cascade of economic challenges. The growing circular debt, frequent energy price hikes, and declining industrial production have become major obstacles. This situation not only hampers output but also increases costs, exacerbating the effects of ongoing power outages. Small and medium enterprises, shopkeepers, and IT professionals, who rely heavily on consistent electricity and internet access, are among the worst affected. Without rapid reforms, IT professionals will continue to emigrate, further impacting foreign exchange earnings.
Pakistan’s internet service disruptions, coupled with low speeds—ranking 198th globally—are pushing many IT professionals to relocate to countries like Dubai in search of better infrastructure. The country’s trade deficit remains a concern, but exports of goods and services have shown growth. The upcoming political landscape, including the actions of US President-elect Donald Trump, will play a key role in shaping Pakistan’s economic trajectory, especially given the vulnerability of remittance inflows from the Gulf region. Political stability is essential for continued recovery and attracting foreign investment.
NEWS DESK
PRESS UPDATE