Macroeconomic Policy

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INTRODUCTION: Macroeconomic stability means that’s all the macroeconomic variables such as (unemployment, inflation, economic growth GDP, investment, saving etc) are in that condition that they makes economy healthy and stable. KEY PRIORITY ISSUES: Unemployment Policies for macroeconomic stability Keep IMF program on track. Role of government as a development agent. Industrial restructuring. Control of inflation Policies for macroeconomic stability: If the situation of the economy will be bad and disequilibrium in economy then two policies are adopted to make the economy stable. Fiscal policy: This policy is adopted by government when economy disequilibrium in economy due to any macroeconomic variable. The tools of fiscal policy are taxes, government expenditures. To acquire the desire level of output they increase/decrease in aggregate demand or aggregate supply through this policy In Pakistan, level of tax evasion is very high amongst the population and there is no law against tax evasion or punishments against those people who did not pay tax. The total population of 170 million people, you even imagine that only 1.7 million pay taxes. Thismeans only 1% of the total population pay taxes.As a result of this tax collection, Pakistan is still a third world country which heavily relies on foreign aid. As a result of this too much Corruption and illiteracy in Pakistan. Fiscal measures to prevent this issue to focus on strict documentation and broadening the tax base for direct taxes. When talk about the government expenditures, it can be reduced by restructuring of Public Sector Enterprises by Subsidy rationalization and targeting subsidies to the poor only through Benazir Income Support program result in better i... ... middle of paper ... ...l be improved then interest rate will be decreased slowly. When interest rate will be decrease then business man gain this opportunity and grow up their business so, industry will be flourished and best utilization of resources. Foreign debts are managed by the following methods: Official bilateral debts are to be retrofired. Concessional and non-concessional loans are to be substituted. Advanced payment of expensive loans Debt ratio decreased from 100 to 60 % of GDP. Short terms liabilities will be liquidating. Our trade policy is one of the “least restrictive in south Asia “trade policies according to World Bank. In this policy gives incentives to exporters that they make place in international market. Our exchange rate policy will follow as they maintain stability and at the same time a huge foreign investment will help him to make the economy stable.

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