**Key Economic Indicators**  

- Inflation: Over 20% as of mid-2008  

- Fiscal deficit: 7.4% of GDP  

- Foreign reserves: Under $7 billion — barely covering two months of imports  

- GDP growth: Slowed to 4.1% from 6.6% the previous year

**Structural Weaknesses**  

The economy remains dependent on a few sectors, notably textiles and remittances. Tax-to-GDP ratio is under 10%, one of the lowest in the region. Public sector enterprises like PIA and WAPDA continue to bleed finances.

**Global Pressures**  

The global financial crisis is beginning to impact exports and foreign direct investment (FDI). Oil prices have reached record highs, increasing import bills. Moody’s downgraded Pakistan’s credit rating in May 2008.

**Conclusion**  

Urgent reforms are needed to stabilize the macroeconomic environment. Without International Monetary Fund (IMF) support or significant bilateral aid, the risk of sovereign default cannot be ruled out.

**References**  

- Pakistan Economic Survey 2007–08  

- State Bank of Pakistan Monetary Policy Review (June 2008)  

- IMF Pakistan Country Report (2008)