ABSTRACT
Toward the end of 1988, Pakistan's deteriorating resource situation caused a financial crisis, remnants of which still exist today. In 1988 the government's budget deficit reached 8.5 percent of Gross Domestic Product (GDP), inflation accelerated, the current-account deficit doubled to 4.3 percent of Gross National Product (GNP), the external debt-service ratio reached 28 percent of export earnings, and foreign exchange reserves fell in half to $438 million, equal to less than three weeks of imports (World Bank, 1991, p. ii).
