How crisis-hit economies become investment darlings

NAWAZ SHARIF is the ex-prime minister of Pakistan again. His third stint in the job ended on July 28th after the Supreme Court disqualified him from office. Yet he could justifiably claim that he left Pakistan’s economy in a better state than he found it. When Pakistan last went to the polls, GDP had been growing at around 3%, a dismal rate for a poor country with a burgeoning population. Inflation was above 10%. The budget deficit had ballooned. A crisis loomed. Four years on, inflation is in the low single digits. The budget deficit has shrunk to a little above 4% of GDP. The GDP growth rate is closing in on 6%. Investors too have taken notice. Since 2012, Pakistan’s stockmarket capitalisation has doubled in dollar terms (see chart).

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Source: Business and Finance