SOCIAL IMPACT OF GLOBAL RECESSION ON PAKISTAN

This study examines the impact of global recession on the economy of Pakistan. For a fragile economy like Pakistan, coping with even a single economic crisis is difficult, let alone the two, that followed in quick succession — the unprecedented surge in commodity prices and then the global recession. The social impact of these crises on Pakistan can come through: a possible fall in remittances from UAE and the United States, reduced output growth, fiscal tightening, falling exports and a depreciation of the exchange rate. Given the state of economy at the onset of the recession, the Keynesian prescription of strong fiscal stimulus could not be administered for stimulating recovery. Coupled with the adverse changes in the variables referred above, this will serve to increase the poverty head count ratio in the country. If the suspicion of fall in remittances from UAE or US comes true; there is more bad news to be had for the poverty head count ratio.