ABSTRACT
Pakistan’s record on macroeconomic management has been mixed. In the face of a variety of internal and external shocks, the country has managed to avoid excessive macroeconomic instability in the form of hyperinflation or severe exchange rate volatility. The principal factors leading to periodic episodes of macroeconomic stress are chronic and uncorrected structural weaknesses in Pakistan’s economy. Pakistan has had a consistent rising trend of remittance flows for many years, but macroeconomic developments suggest that this is unlikely to persist. The principal factors leading to periodic episodes of macroeconomic stress are chronic and uncorrected structural weaknesses in Pakistan’s economy. Pakistan has demonstrated an almost unique proclivity to allow fiscal and balance of payments pressures to build up into a near crisis situation every few years, which then must be dealt with through orthodox economic stabilization tools, often with the help of the International Monetary Fund.
