These 19 developments shaped Pakistan's economic future in 2018

Take a look at the major ups and downs on the economic front in the outgoing year.
Overall, 2018 saw Pakistan's economy buckle under increasing pressure, with decreasing foreign exchange reserves, increasing trade deficit, circular debt as well as foreign loans taking a toll on macroeconomic health.
As a result, the economy suffered while resources were diverted to handling power crises, import bills, and other issues. The country's foreign exchange reserves also remained under pressure.
During the first half of the year, a tax amnesty scheme was launched for foreign asset holders. During the outgoing year, stricter regulations were imposed by the State Bank of Pakistan and the Securities and Exchange Commission of Pakistan on asset inflows and outflows.

The central bank also raised its policy (target) rate by 150 basis points (bps) to 10 per cent near the end of the year.

Here's a look at the few of the major developments on the economic front throughout the year.

1. America suspends entire security aid to Pakistan

In the first week of January, the Trump administration suspended its entire security assistance to Pakistan until Islamabad "proved its commitment to fight all terrorist groups operating in the region".

According to the State Department, the cut-off is not permanent and only affects military assistance.

Under the new approach, funds would be allocated to a particular purpose identified with the allocation and would be released only after that target was achieved. The targets identified with the allocation could be strategic as well as issue specific.

2. EU renews GSP+ scheme for two years                                                                                               

      EU Parliament renews GSP plus scheme for Pakistan for another two years.— AFP/File

The Generalised System of Preferences Plus (GSP+) scheme passed smoothly through the European Parliament’s Committee on International Trade (CIT) in February, enabling Pakistani exporters to enjoy preferential duties on exports for the next two years

   3. Tax amnesty scheme                                                                                                                                       

  The scheme enabled people with undeclared income earned before June 30, 2017 to bring it in the tax net by paying only a 5pc penalty.— Photo courtesy of imlaak.com
In April, the then prime minister, Shahid Khaqan Abbasi, announced a tax amnesty scheme through which people with undeclared income earned before June 30, 2017 on assets held within the country were allowed to declare them by simply paying a five per cent penalty.

People holding undocumented assets outside the country were also invited to declare them through the new amnesty scheme. Foreign exchange could also be brought back to the country by paying a 2pc penalty. Foreign liquid assets like cash, securities and bonds held abroad and in local dollar accounts could be declared with a 5pc penalty.