From Crisis to Reforms in Argentina: Learning for Pakistan

Nadeem Ul Haque and Nasir Iqbal
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Nadeem Ul Haque: Pakistan Institute of Development Economics
Nasir Iqbal: Pakistan Institute of Development Economics

No 2024:128, PIDE Knowledge Brief from Pakistan Institute of Development Economics

Abstract: The review paper Argentinas economic reforms under President Javier Milei, highlighting key measures like a 54% devaluation of the peso, the abolition of price controls, and subsidy reductions that addressed fiscal imbalances and restored market efficiency. These reforms, which also included labor law modernization and deregulation of key sectors, provide valuable lessons for Pakistan. Facing similar challenges such as high inflation, low labor productivity (1.5%), and substantial fiscal deficits, Pakistan must adopt strategic policies to improve governance and economic performance. By investing in education, enhancing labor market flexibility, and expanding international trade—mirroring Argentinas $84 billion export strategy - Pakistan can bolster its foreign exchange earnings and trade balance. Additionally, Pakistans adherence to IMF programs, as demonstrated by Argentinas $4.7 billion disbursement, is crucial for fiscal stability. Learning from Argentinas fiscal consolidation and monetary policy adjustments can help Pakistan address its inflation, paving the way for sustainable economic stability and growth.

Pages: 15 pages
Date: 2024
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