According to the Pakistan Institute of Development Economics, more than 31% of Pakistan’s youth are currently unemployed, with 51% being females and 16% being males, and many of them holding professional degrees.
According to Federico Giuliani, writing in Insideover, the poor state of Pakistan’s economy, which suffered in the aftermath of the COVID-19 pandemic, was exacerbated by inefficient economic administration by the PTI government under Prime Minister Imran Khan.
Officially, the current account deficit has reached 5.3 percent of GDP. The fiscal deficit is expected to rise to 8.2 percent of GDP.
The Pakistani rupee has also taken a beating, falling 13% against the US dollar since July 2021. To put it mildly, the economy is nearly bankrupt.
Regardless of the composition of the unemployed, the figures are serious enough to warrant the government’s attention. Some may be sceptical of the PIDE data.
Even if we accept the government’s estimate of 4.65% unemployment in 2020, daily experience supports the PIDE report.
Inflation is running at 12.3%, and job opportunities are shrinking for obvious reasons: a lack of sufficient investment, a worsening energy crisis, rising imports despite the rupee’s declining value against the dollar, an inadequate education system, and a demographic explosion.
According to the PIDE report, urban areas have a higher rate of unemployment than rural areas. Even in cities, the majority of jobs are in the retail and wholesale trade sectors, rather than in industries.
Graduate unemployment is higher in villages than in cities. Surprisingly, the construction industry employs 8% of the workforce in both urban and rural areas.
This is an anomaly caused by the lack of a proper methodology for identifying areas as urban, as a result of the persistence of regimentation in this regard.
The rate of saving is another factor in a country’s economic progress. Pakistan has traditionally had a low savings rate due to its consumption-oriented society.
Even now, savers are unsure whether their funds will be used to expand job opportunities or to finance consumer goods.
When the rising unemployment rate is weighed against the ballooning import bill, the answer is unconvincing. People prefer to see their savings invested in the creation of jobs.
The government should focus on making investors feel completely secure in their investments. This includes providing tax breaks to help taxpayers, particularly large ones.
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