Although the government in Pakistan has made economic growth one of its main targets for the next four years, global economic trends point to shrinking economies the world over. This of course, might make the Pakistan Tehreek-i-Insaf’s (PTI) responsibility to bring a turnaround that much harder and would require a more skilful handling of the economy than is currently on display.

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The rapidly escalating trade war between the US and China is a major cause for stagnating growth in the world and an overall rise in inflation and decreasing productivity. The Trump Administration has looked to increase sanctions on Iran and tariffs for China, which has responded in kind. Although President’s Trump recent offer of a meeting with President Xi might lead to a break in the deadlock on trade talks and the tit-for-tat tariff hike policy, a failure to come to an agreement for two of the biggest economies of the world is quite naturally going to have an adverse effect on the global market as a whole.

But beyond the trade war, the rest of the world is not faring any better on its own, as evidenced by slowing growth in European countries such as Germany and Sweden. Falling auto sales have meant that Germany might see its ten-year economic boom come to an abrupt end.

Given that Pakistan’s own industries seem to be failing consistently in their attempts to increase exports, the government needs to keep in mind that it can take advantage of mediocre global growth by opening up the domestic labour market for foreign multinationals. Not only would this increase employment within Pakistan, but it might also help in providing impetus for growth for domestic firms. The government has not been fortunate in the hand it has been given, however given the current state of Pakistan’s growth trajectory, it is important that the global context is kept in mind when looking to improve our own fortunes. Unless Pakistan adopts a more fluid approach to economic policy, we are also destined to face the impending economic shrinkage that will affect the entire world very soon.