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Global Financial Crisis, MDGs and Choices for Pakistan’s Inclusive Development

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  • Ahmed, Saira
  • Ahmed, Vaqar
  • Abbas, Ahsan
  • O' Donoghue, Cathal

Abstract

In this paper, we use a CGE – microsimulation model to show the impact of the global economic crisis on Pakistan economy. Our results estimate that between 2007 and 2009, poverty increased by almost 40 percent. However this is also attributable to the fuel and food crises that preceded the financial crisis. More recently Pakistan witnessed a sharp reduction in external resource inflow on account of the global recession, among other reasons. This led to a sharp depreciation in the value of domestic currency, a decline in investment, falling wages for skilled workers, and a general rise in consumer prices. At the micro level, we estimate that this resulted in a 4 percent increase in poverty with food consumption declining by 1.2 percent. The cut in federal development pro-poor expenditure further threatens the progress made towards achievement of MDGs.

Suggested Citation

  • Ahmed, Saira & Ahmed, Vaqar & Abbas, Ahsan & O' Donoghue, Cathal, 2010. "Global Financial Crisis, MDGs and Choices for Pakistan’s Inclusive Development," Conference papers 331971, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331971
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