Question

how does pakistan’s economic crisis affect corporations?

Answer 1

Pakistan's economic crisis is going to impact the corporations severely.

• The demand for the consumer goods will go down. This will impact the corporation engaged into consumer good sector badly.
• Government's spending on infrastructure will go down. The construction activities will slow down. Infrastructure such as housing, roads, bridges, toll, ports etc will see muted spending because of which corporate involved in these sectors will be adversely hit.
• Consumers income levels will go down which will result into lower savings. This means banks will see a decline in the deposits mobilized. Banking business will also suffer. Corporations in banking and non banking finance companies will be adversely impacted.
• Overall revenues and earnings of the corporate will suffer. If such a crisis remain unsolved, the problem will deep root itself and give rise to a contagion effect on the entire economy.
• If revenues and earnings are lowered, corporate will pay less taxes. Government income will reduce and it will not be able to repay the foreign currency debt. The overall debt levels are alarming This will give rise to further negative outlook.