It has been 12 years since the end of the musical chairs of military rule and bouts of interrupted democracy. Since then, each time a new political party has been elected it faced unprecedented challenges from the devastating floods during the PPP tenure in the era of the global financial crisis, to the civil/military frictions of PML-N period and now the global pandemic.

Arguably, PTI was voted in with a lot more hope as the hitherto untried party promising a tsunami of change. Sadly, Pakistan’s worst economic performance on record, as estimated by Standard & Poor’s, was in the fiscal year that just ended.

But taking a gander through historical indicators would serve to remind that Pakistan has weathered significant economic storms, natural calamities and political turmoil before.

The first year under PPP still holds the record of the worst-ever performance of large-scale manufacturing (LSM) in the country’s history. It was led then, as now, by external factors namely the global economic contraction with depressed demand for exports with the added challenge of a poorer law and order situation. Inflation was at its highest level since 1975-76.

The real GDP growth rate rose in PPP’s second year more because of the low base of 2008-09 than any transformational structural change. Weak consumer demand reined in inflation. Despite the floods that devastated one-fifth of the agricultural heartland and the wave of dengue fever in Punjab, agriculture posted a modest growth owing to a bumper rabi season. With the aid of the IMF that PPP resorted to in its first year and buffeted by the Coalition Support Funds, the country limped on with inflation falling to single digits in the last year of PPP’s tenure.

The PML-N worked towards keeping the exchange rate fixed and spending a lot on infrastructure projects which enabled it to boast the highest real GDP growth rate of a decade in 2017-18 at 5.8pc, pulled up in part by the growth in LSM. At below 5pc, inflation remained benign through most of PML-N’s tenure.

But there was a price to pay for the rosy scheme of things. Alarm bells were already sounding in 2017-18 because of the ballooning import bill and the consumption-led growth was coming to a screeching halt before careening down the GDP growth roller coaster.

By the time PTI was voted in 2018-19, the twin deficits had reached crisis levels and the foreign exchange reserves were in a precarious position. The rupee depreciated, the import bill was reined in, growth suffered, industry contracted as demand was curtailed and inflation rose.

In this entirely gloomy phase, the pandemic broke out to further erode the country’s macroeconomic fundamentals.

If coronavirus has taught us anything it’s the resilience of the nation that can survive a global pandemic with minimal resources. While the outlook is grim, the night is the darkest before dawn.

Published in Dawn, The Business and Finance Weekly, August 24th, 2020