ISLAMABAD : The Pakistan Economy Watch (PEW) on Monday said devaluationwill increase the burden on poor, increased foreign debt and liabilitieswhile boosting the profit of some of the influential sectors.
Erosion in the exchange rate to the tune of 9.4 percent in just threemonths will hit man on the street while and damage education, health, andsecurity environment, it said.
The devalued rupee is to take a toll on the economy while it is to improvethe profitability of many influential sectors including textile, oil andgas and IPPs, said Dr. Murtaza Mughal, President of PEW.
He said that increased price of locally manufactured and imported goodswill trigger smuggling and tax evasion helping the black economy to expand.
Repeated devaluation is in conflict with the claims of the government thateconomy has been revived through tireless efforts, he added.
Dr. Murtaza Mughal said that claim that eroded rupee will boost exportsneeds some verification as imports and more than double of the exportswhich can nullify the impact of the move.
The government should have studied the impact of inflation in advance andtried to contain it, he demanded.
He said that if the central bank hiked interest rates to contain inflationit will deal a severe blow to the shattered economy.
Devaluation can provide oxygen to the dying economy but it cannot reviveit, he said, adding that key to the economic revival lies in the meaningfulreforms which is not on the agenda of authorities. – Agencies