'No boom-bust': a dangerous economic cycle

KARACHI:

Pakistan's economy has long followed a familiar rhythm of boom and bust. Each cycle begins with an International Monetary Fund (IMF) stabilisation phase that focuses on fiscal tightening, inflation control, and temporary improvement in external balances. When stability returns, political leadership typically shifts toward growth, relying on domestic demand, cheap credit, and rising imports.

This expansion inevitably inflates the current account deficit (CAD), depletes reserves, and ends in another downturn. For decades, the pattern has repeated with almost mechanical predictability.

Today, however, Pakistan faces an even more unsettling variant of this cycle — one defined by rising external pressures without any real boom. The country is once again recording current account det