ISLAMABAD: Experts at a roundtable said the federal budget 2019-20 and the government`s stabilisation policy will have disastrous consequences for Pakistan`s middle income class which is expected to face a 40pc compression in disposable income as taxes, inflation.

The roundtable, `Austerity budget: assessing the impact on development and pro-poor growth` was held at Jinnah Institute.

Former member of the prime minister`s economic advisory council Sakib Sherani said therisingcurrent account deñcit and an overvaluedrupee hadresulted in a debt trap.

He said overvaluation of the rupee over the last five years meant that Pakistan ran a huge current account deficit, the largest in all emerging markets.

He said the rupee had been f alling because external ñnancing gap was over $23 billion in 2018.

`The only way out for Pakistan from the severe currency crisis at the moment is through pursuing stabilisation,` he added.

He said Pakistan`s exports were not only the lowest among all emerging markets at 8 per centbut also continued to shrink.

Dr Faisal Bari, academic and member of the Economic Advisory Council, said the government was underestimating the consequences of the budget 2019-20.

`Jobs are vanishing, inflation is hitting people very hard and utility prices are pushing people in debt,` he said adding: `There is absolutely no guarantee that three years of pursuing stabilisation policies will yield any benefits or lead to a growth path.

He said Pakistan needed over seven per cent sustainable growth but there was no vision for growth.

Another member of the council, DrIjaz Nabi, said economy`s structural problems createdinconsistentgrowth patterns, regular trends of regression after momentary stabilisation.

Dr Nabi recalled moments in Pakistan`s economic history where the rupee had crashed but the economy found other ways of bouncing back.

`But without addressing economic fundamentals such as gross systemic inefficiencies acrossinstitutions, there is little chance that governments will be able to break out of the stabilisation-bankruptcy-stabilisation rut that they find themselves in,` Dr Nabi said.

Former Board of Investment(BOI) chairman Haroon Sharif observedthatboththebudgetand broader economic policy send negative signals to investors and citizens alike, that Pakistan does not have a medium or long term strategy or vision.

Business interests dictate the drafting of budgets whose review process is poor and there is clear elite capture over budgetary approvals.

The speakers suggested that decision makers should consider the strategic opportunities available to Pakistan through CPEC and utilise the country`s human resource for growth.