ECONOMICS

Presented By
Saad Amir
M Junaid
Hammad Hassan
Sarmad Hussain
Faisal Usman
Syed Hamza
Economics

Economics is the science which studies human behavior as a

relationship between given ends and scarce means which have
alternate uses.
In the following presentation we are going to discuss how Terrorism,
Energy Crisis, Inflation, Corruption, Interest rates and Government
intervention has social effects on economics and the economy of
Pakistan.
Terrorism

How can terrorism be defined?

Causes and effects:
 According to the Pak-US business council report(2009), our economy has suffered a loss of $70

billion.
 Due to political uncertainty in Afghanistan, large quantities of our food items are smuggled to

Afghanistan, which ultimately leads to acute food grain scarcity within our country,
 According to the finance ministry, Pakistan suffered a loss of Rs. 2080 billion in the war against

terror which badly affected the country's economic development.

 Higher expenditure on defence and police

 Losses of human life

 High inflation

 Damages to property

 Slowdown in overall economy


Energy Crisis

What is energy crisis?

Causes and effects:
 Fluctuation in oil prices in international market: Wapda and KESC purchase expensive oil and transfer cost

to customer.
 Faulty distribution system: We waste 15 to 20 percent energy through poor distribution system.

 Aging of equipment: Unable to generate required electricity due to old machinery.

 According to EAW 2013, the proportion of energy generation for Pakistan is 36% from hydro and nuclear

source.
 About 35% generation from furnace oil-fired sources, 29% energy generation from gas-fired sources and

0.1% accounted from coal-fired plants.

 For short-run Pakistan is implementing various strategies such as payment of circular debt, coal based

600MW electricity plant at Port Qasim with the help of China, 10,000 acre solar park in Punjab with
Chinese support and importing electricity from Iran.
 For long-run government promptly needs to take some serious steps like dams on priority basis to

completely end energy crisis.

Inflation

What is Inflation?
Causes and effects:
Causes of Inflation has 2 types
A. Increase in demand
1. Increase in money supply
2. Non-productive expenditures
3. Corruption and black money
A. Decrease in supply
1. Slow agricultural development
2. Slow Industrial growth
3. Increase in wages and salaries
Interest Rates

How can we define Interest rates?

The effects of Interest rates:
 Increased cost of borrowing
 Higher mortgage interest payments
 Increased return on saving
 Hot money flows
Impacts of interest rates
Whenever interest rates were increased, value of money was increased and more money was borrowed by the
banks and whenever interest rates were decreased, the value of money was decreased
In august 2018, the annual inflation rate in the country came in at 5.84 percent, the highest since September 2014.
Interest rate of Pakistan averaged 11.17 percent from 1992 until 2018, reaching an all-time high of 19.50 percent
in October 1996 and a record low of 5.75 percent in May of 2016. The fluctuation of these interest rates has a
deep impact on the production, growth rate and stability of an economy.
Government Intervention

What is government intervention?

Effects of government intervention:
 Value judgement

 Changing prices to change incentives and behavior

 Social science

 Combinations of policies

 The power of markets

 The law of unintended consequences

Impacts of Government intervention

When lives of citizens and innocent people are in danger then government intervenes, and with the
help of armed forces of Pakistan as they are the defenders of the citizens. These measures are taken
to control the situation and stabilize the conditions of the country.