Periods of stagflation in Pakistan
[6] Bhutto's government faced with many difficult problems experienced by Pakistan's economy including the low productivity combined with a high rate of monetary in circulation.
[5] According to the studies of Mohiuddin, the mechanical and machine building industries had employed surplus workers by PPP for various political reasons, which led the sharp decrease in productivity and increase in dead weight losses.
[5] The controversial and poorly studied financial policies and political resentment led the dismissal of Zulfikar Ali Bhutto in 1977 and was subsequent executed in 1979.
According to the Pakistan Peoples Party, Nawaz Sharif's government arbitrarily fixing the reference prices of the (privatized) state units and ignoring those suggested by the evaluations; though, Sartaj Aziz strongly dismissed the claims.
[12] In an article, "The curse of stagflation", Aziz posthumously blamed the second government of Pakistan Peoples Party, and pointed out the failure of the planned economic system of Benazir Bhutto.
[10] However, Sharif's reform suffered a major set back in 1999 when the country began militarily involved with India in two occasions, which led the dismissal of his government in 1999.
[15] The implementation and enforcement of economic liberalisation and privatization programmes led the boom the economy, which subsequently ended the stagflation era, and for the first time since 1984, the GDP growth had reached to 9.0%— one of the highest in the world.
[16] Temporarily, the charge of restoration of the national economy was given to Hina Rabbani Khar who made partial success on presenting the federal budget.
During the financial crisis of 2007–2008, growth in Pakistan halted the abruptly and stalled for a longer period than any other states in the South Asia, causing the economy first becoming stagnant.
[18] The Shaukat Aziz era, which had begun with high growth, inherited the government to Yousaf Raza Gillani, began to stagnant and stagflated in 2008.
[22] The fifth budget is an attempt to counter the stagflation by enhancing the salaries of the government and party officials and members; but the rising inflation has already eroded the incomes more than they are likely to get.
"[23] The Pakistan Today reasoned that more than ~48% unskilled and blue collar workers were absorbed in the private-sector industries after the government-management ownership which was engaged in agriculture; thus resulted in a decline of productivity and labour discipline.
[23] Though, the specialists and economists remains unclear what key factor causes the stagflation, the many multiple factors can be attributed; on the other hand, the key media political specialists and economics writers, including the independent and neutral organization, such as Transparency International, posthumously blamed Yousaf Raza Gillani for doing too little to improve the economic situation.
[24] Throughout his democratic rule, no major reforms were initiated and the corruption, tax evasion, and the bad governance are likely to be modest factors to cause the stagflation.
"[25] Ahmad further endorsed and maintained that, "a major cause of continuing stagflation in Pakistan was lack of Gilani's policy coordination between fiscal and monetary authorities.
"[25] One factor may involved in the stagflation is attributed to the mathematical calculation performed by PIDE, that points out that the "nation's currency in circulation as a percentage of total deposits is 31%, which is very high as compared to neighboring India".
[19] One economist maintained that stagflation took place when the tight monetary policy did not encourage the strong private sector to play a key part in growth.
