Pakistan Economy: News & Discussion

[pankaj nema]

any idea on how to find out how much forex Indian commercial banks have with them?

was trying to get this info, not sure where to find a consolidated number.

You will have to Calculate from this table

It would be the Difference between Purchases and Sales

Reserve Bank of India - Foreign Exchange Data

 

[ezsasa]

You will have to Calculate from this table

It would be the Difference between Purchases and Sales

Reserve Bank of India - Foreign Exchange Data

so around 10-15 billion $ net on a daily basis.

 

[indiatester]

SBP’s forex reserves fall to eight-year low

Experts reluctant to accept Dar’s ‘optimism’.

www.dawn.com

Published December 30, 2022 Updated about 3 hours ago




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LISTEN TO ARTICLE1x1.2x1.5x
KARACHI: With the expected IMF tranche still nowhere to be seen, State Bank of Pakistan’s foreign exchange reserves on Thursday further declined by $294 million to $5.8 billion — their eight years’ low — making it even more difficult for the country to repay its foreign debts.
The country has been facing a worrisome scenario as the reserves are not enough to service its huge foreign debt.
Though Finance Minister Ishaq Dar insists Pakistan will not default, the situation on the ground hardly supports his assertions.



The central bank’s foreign exchange reserves have been persistently falling since the beginning of FY23. Analysts and experts paint a gloomy picture for the state of economy as they believe that the country is close to default. They are not simply ready to buy the finance minister’s statement on default.
Since the change of government in Islamabad earlier this year, the SBP’s foreign exchange reserves have been falling and the few inflows over this period have proved to be too little to meet heavy payments. In April, when the Imran-led PTI government was replaced by the Shehbaz-led PDM government, the reserves stood at $10.5bn as compared to $5.8bn on Dec 23.

Experts reluctant to accept Dar’s ‘optimism’

The fear of default is also evident from the exchange rate instability which has eroded the value of local currency against all the major currencies, particularly the US dollar. A US dollar, which was sold at Rs180 in April, traded at Rs226 in the inter-bank market on Thursday. Yet, the greenback has almost vanished from the open market over the last couple of months. Worse, a grey market has emerged due to the shortage of American dollar which is offering a dollar for Rs260 to Rs270, against the inter-bank rate of Rs226.

This significant difference in the rates has already started affecting the remittances coming through official banking channels with inflows witnessing a falling trend.

Approximately, Pakistan is losing about $300m remittance per month. Bankers said the low exchange rate being managed by the State Bank artificially has diverted this $300m to the illegal grey market. Currency experts said if this trend continues then more remittances would go to the grey market and the country would lose about $4bn at the end of the current fiscal FY23.

The poor economic growth has already slashed the foreign direct investment in the country as it received just $430m during July-Nov FY23, compared to $885m in the same period last year — a decline of 51 per cent.

All stakeholders, except the foreign minister, were found to be extremely worried about the weakening health of foreign exchange reserves. They said the finance minister must announce that he had arranged payments to be made for the debt servicing. Neither China nor Saudi Arabia has so far announced that they are going to help save Pakistan from default.

The State Bank reported that the country’s overall reserves were $11.707bn, including $5.88bn of the commercial banks.

Published in Dawn, December 30th, 2022

In normal circumstances, pakis would have already been provided sufficient cover.
But due to wuhan virus aftermath and specially due to Ukraine needing so much support in the war, pakis needs have been pushed to lower priority.
Any sudden surge by Russia or any other costly eventuality would push the pakis towards default. In the absence of such event, I guess pakis would be saved somehow.
Pakis are very critical to keep India in check and they can be used as leverage in the islamic countries too.

 

[iNorthernerOn9]

Any sudden surge by Russia or any other costly eventuality would push the pakis towards default.

Surge would come in mid February... so Pakis won't get any respite

 

[Swesh]

Graphical representation of pakis father's bailout to them

 

[indiatester]

View attachment 187934
Graphical representation of pakis father's bailout to them

More than the impact of large repayments of previous loans, what hurts them more is the need to use their meager resources to buy essential stuff like food, meds, fuel etc
Since their income is nowhere near their expenses, they will keep going down regardless of how their abbus keep bailing them out.

 

[Varoon2]

"In 1970 Pakistan was ahead of India economically."

This is intriguing, and I'm not disputing it, but it sounds puzzling. What was the basis of their being ahead, manufacturing, services, technology..? Pakistan was never ahead of India in overall manufacturing, services or technology. So it must be per capita income, investment per capita, and agriculture.

 

[another_armchair]

"In 1970 Pakistan was ahead of India economically."

This is intriguing, and I'm not disputing it, but it sounds puzzling. What was the basis of their being ahead, manufacturing, services, technology..? Pakistan was never ahead of India in overall manufacturing, services or technology. So it must be per capita income, investment per capita, and agriculture.

From Worldbank data,

GDP (current US$) - Pakistan | Data

GDP (current US$) - Pakistan from The World Bank: Data

data.worldbank.org

World Bank Open Data

Free and open access to global development data

data.worldbank.org

GDP of Pakistan in 1970 - $10.03 billion

GDP of India in 1970 - $62.42 billion

In 1973, GDP of Pakistan after Bangladesh Liberation War dropped to $6.38 billion while India rose to $85.52 billion.

They may have arrived at that conclusion based on some West based economic indicators or think-tank study but must say.. some delusions of grandeur.

 

[ezsasa]

"In 1970 Pakistan was ahead of India economically."

This is intriguing, and I'm not disputing it, but it sounds puzzling. What was the basis of their being ahead, manufacturing, services, technology..? Pakistan was never ahead of India in overall manufacturing, services or technology. So it must be per capita income, investment per capita, and agriculture.

they mean GDP growth of 11% in 1970 .

Comparing India and Pakistan by Economy - StatisticsTimes.com

Comparing economic statistics between India and Pakistan. India vs Pakistan by GDP, GDP per capita and GDP growth rate.

statisticstimes.com

 

[Varoon2]

^Thanks. What is an example of Pakistan manufacturing something, or providing a specific service( like IT, call centres, legal outsourcing, animation, medical tourism) before India did? The one thing that comes to mind, is specific sports items, like soccer balls or cricket bats. Even here, can't say for sure that they produced it before India, but it does look like more of their goods are exported, than are Indian(?).

 

[Indx TechStyle]

"In 1970 Pakistan was ahead of India economically."

This is intriguing, and I'm not disputing it, but it sounds puzzling. What was the basis of their being ahead, manufacturing, services, technology..? Pakistan was never ahead of India in overall manufacturing, services or technology. So it must be per capita income, investment per capita, and agriculture.

From Worldbank data,

GDP (current US$) - Pakistan | Data

GDP (current US$) - Pakistan from The World Bank: Data

data.worldbank.org

World Bank Open Data

Free and open access to global development data

data.worldbank.org

GDP of Pakistan in 1970 - $10.03 billion

GDP of India in 1970 - $62.42 billion

In 1973, GDP of Pakistan after Bangladesh Liberation War dropped to $6.38 billion while India rose to $85.52 billion.

They may have arrived at that conclusion based on some West based economic indicators or think-tank study but must say.. some delusions of grandeur.

they mean GDP growth of 11% in 1970 .


View attachment 188151

View attachment 188149

Comparing India and Pakistan by Economy - StatisticsTimes.com

Comparing economic statistics between India and Pakistan. India vs Pakistan by GDP, GDP per capita and GDP growth rate.

statisticstimes.com

The criteria of "Pakistan was ahead of India economically in 1960s and 70s" is reliable and good as criteria of South Korea following the path of Pak economy. They comfortably ignore the fact they never attempted to industrialize like China & India or even Vietnam, leave alone Asian tigers and all their growth was a result of favorable environment and aid of that time.

Their operandi works like this, illusion is created in minds of Pakistani population through propaganda and that propaganda is passed on next generation as "history" which is the reason why perceptual history of Pakistani people is stark mismatch against rest of the world.
We defeated two superpowers, we were richer than India in 60s, Pakistan was Asian tiger, all are delusions of that era which have become "recorded history for Pakistanis" in which they actually believe now.

@ezsasa Would you guess, what history they are recording for next generation?

 

[ezsasa]

The criteria of "Pakistan was ahead of India economically in 1960s and 70s" is reliable and good as criteria of South Korea following the path of Pak economy. They comfortably ignore the fact they never attempted to industrialize like China & India or even Vietnam, leave alone Asian tigers and all their growth was a result of favorable environment and aid of that time.

Their operandi works like this, illusion is created in minds of Pakistani population through propaganda and that propaganda is passed on next generation as "history" which is the reason why perceptual history of Pakistani people is stark mismatch against rest of the world.
We defeated two superpowers, we were richer than India in 60s, Pakistan was Asian tiger, all are delusions of that era which have become "recorded history for Pakistanis" in which they actually believe now.

@ezsasa Would you guess, what history they are recording for next generation?

let me take a shot at it..

"CPEC was an economic miracle for pakistan, 100 billion $ project helped pakistan build our own metro, new motorways, electricity plants. Gwadar became fastest growing city in pakistan during this period".

 

[ezsasa]

DigitalOcean Holdings Inc acquires cloudways for 350 million $
so if the FDI has come in, where did the money go?

usual FDI numbers for pakiland are 100-120 million $ average per month these days.
====
Gong ceremony marks largest acquisition in IT sector

Gong ceremony marks largest acquisition in IT sector

Stock trading began with Lord Aamer Sarfraz of Kensington striking the gong to mark the acquisition of Cloudways by DigitalOcean Holdings Inc.

www.dawn.com

 

[FalconSlayers]

DigitalOcean Holdings Inc acquires cloudways for 350 million $
so if the FDI has come in, where did the money go?

usual FDI numbers for pakiland are 100-120 million $ average per month these days.
====
Gong ceremony marks largest acquisition in IT sector

Gong ceremony marks largest acquisition in IT sector

Stock trading began with Lord Aamer Sarfraz of Kensington striking the gong to mark the acquisition of Cloudways by DigitalOcean Holdings Inc.

www.dawn.com

so if the FDI has come in, where did the money go?

To a tax haven...

 

[ezsasa]

The glorious theories

India v Pakistan: War of the Economies



The dilemma

Islamic Finance Guru REACTS to Dr Zakir Naik on Day Trading Halal or Haram Fatwa

 

[Anandhu Krishna]

'No other option' but to implement IMF deal: Pak PM Shehbaz Sharif

I want Imru back.

 

[Anandhu Krishna]

Indonesia has got geographical limitations. How can you make land available on a bunch of islands for industries and connect them all? By building deep sea ports in every island to do cost competitive shipping?
Indonesia already suffered currency crisis once. It can happen again.
But yes, I see ASEAN overall as a solid competitor. I don’t think we will see any military confrontation with Indonesia. They are not thinking that way. If anything they will partner with us as A&N islands are right next door. Myanmar is the wild card and I hope they open up and let India connect with SE Asia cost effectively. India needs to get stricter with Myanmar to open up transport corridors and ports. Buy out the Sittwe port and land needed to connect to Mizoram. Make these sovereign Indian territories. Myanmar is wasting all this land and port access by doing nothing , no development or trade.
You can drive from Guwahati to Singapore.

Just cos it looks small on a map doesn't mean that it's a small country. Their population density is very uneven and they have enough land to build any industry. They can also build up their service industry.
It doesn't matter if they don't have hostile thinking today. All current projections put them in the top 6 GDP by 2050 and they will build up their military. Which will include a strong Navy. Mere existence of it is a problem.
Myanmar is not going to sell the port. Even if they do, we will still be dependent on them for connectivity to NE. Better option would be to have a land corridor 30-50 km wide from NE to bengal sea. Either we should buy it (most likely not going to happen) or just take it.

 

[Indx TechStyle]

It doesn't matter if they don't have hostile thinking today. All current projections put them in the top 6 GDP by 2050 and they will build up their military.

Which will include a strong Navy. Mere existence of it is a problem.

Indian diplomatic and trade relations with India, current strength and current growth rate (under construction ships) of India and Indonesia define that matter. Given that insights give us they neither come close to India in military nor are intending or have any reason to turn hostile to India in distant future, India's focus should rather be on containing powers which are equivalent to or bigger than India. All other things will fall in line themselves.

Indian navy is far from being challenged by any local power in IOR for next 3-4 decades. It will only be only external forces like US & China.

 

[Anandhu Krishna]

Indian diplomatic and trade relations with India, current strength and current growth rate (under construction ships) of India and Indonesia define that matter. Given that insights give us they neither come close to India in military nor are intending or have any reason to turn hostile to India in distant future, India's focus should rather be on containing powers which are equivalent to or bigger than India. All other things will fall in line themselves.

There are no permanent enemies or friends. Indonesia is a country with potential, economically and militarily and if they succeed economically they will have a strong Navy. Just because they are relatively friendly today doesn't mean that it won't change.

Indian navy is far from being challenged by any local power in IOR for next 3-4 decades. It will only be only external forces like US & China.

Current projections says that Indonesia could become a 10 trillion economy by 2050. If they do, they can build a navy that can challenge IN. Might not be able to defeat IN but certainly have the potential to challenge.

I don't know where this assumption that Indonesia won't become hostile came from. They were once and they could be again. Coupled with economic growth, it's can be a problem.

 

[The Juggernaut]

Support for Pakistan has ebbed away – yet its deadly floodwaters have not



Climate disasters continue to ravage our country – more international aid is urgently needed to save millions from misery

‘Pakistan is suffering not just from flooding, but from recurring climate extremes.’ People queue for food in Sehwan. Photograph: Akhtar Soomro/Reuters
Fri 6 Jan 2023 10.00 GMT


The apocalyptic rains and floods that hit Pakistan last summer claimed 1,700 lives, left a swathe of territory the size of Switzerland under water and affected 33 million people – more people than live in most European countries.


International attention has receded, but the waters have not. Large parts of Sindh and Balochistan provinces remain inundated. The number of food-insecure people in Pakistan has doubled to 14 million; another 9 million have been pushed into extreme poverty. These flooded areas now look like a huge series of permanent lakes, transforming forever the terrain and the lives of people living there. No amount of pumps can remove this water in less than a year; and by July 2023, the worry is that these areas may flood again.
Pakistan is suffering not just from flooding but from recurring climate extremes – earlier in spring 2022, the country was in the grip of a scorching, drought-aggravating heatwave that caused forest fires in the west. The fact that some of the same areas that received record temperatures were subsequently submerged underlines the sharp swings in weather patterns that are becoming a norm.
Pakistanis have responded to this latest calamity with exemplary resilience. Already facing severe economic headwinds, the government scrambled to generate funds enabling direct cash transfers of more than $250m (£200m) to more than 2 million households. In all, we managed to mobilise about $1.5bn in emergency relief out of our own meagre resources.
We are grateful to the international community and friends of Pakistan for their generosity in helping us to avoid the worst. While the World Health Organization had designated the situation as a high-level health emergency, the feared water-borne diseases and localised epidemics did not break out due to the efficient working of our vast network of medical camps. Similarly, we were able to restore the damaged communication networks between cities and villages very quickly.
Yet more than 2 million homes, 14,000km of roads and 23,000 schools and clinics have been destroyed. A post-disaster needs assessment (PDNA), carried out in collaboration with the World Bank and the EU, estimated that the damage caused by floods exceeded $30bn – a 10th of Pakistan’s entire GDP.

Children with their family taking refuge along a road damaged by rain and floods in Sehwan, Pakistan. Photograph: Akhtar Soomro/Reuters
These numbers only scratch the surface of the challenge at hand. They demand a response that would stretch and overwhelm the resources of any country. The UN secretary general, António Guterres, witnessed the “unimaginable” destruction first-hand during a visit to Sindh province in September. Terming it “climate carnage”, the secretary general found himself at a loss for words – “a flooded area that is three times the total area of my own country, Portugal”. This devastation has been greater than that caused by the 2010 floods in Pakistan, which the UN then described as the worst natural disaster it had ever responded to. Pakistan simply cannot do this alone.
This is why the secretary general and I are co-hosting the International Conference on Climate Resilient Pakistan in Geneva on 9 January. We will be joined by world leaders, representatives of international development and humanitarian organisations, and friends of Pakistan to signal support and solidarity with a country that is grappling with a natural disaster not of its making.

A newborn held aloft in Pakistan sums up the sheer injustice of the climate crisis | Fatima Bhutto
Read more
We will also present a comprehensive roadmap for post-flood reconstruction and rehabilitation, developed with the assistance of the World Bank, the UN, the Asian Development Bank and the EU. The resilient recovery, rehabilitation and reconstruction framework (or 4RF) essentially envisages a two-pronged response. The first part relates to meeting the immediate challenges of recovery and reconstruction, requiring minimum funding of $16.3bn over a period of three years. Pakistan would meet half the funding from its own resources. But we will count on the continued assistance of our bilateral and multilateral partners to bridge the gap.
The second part of the 4RF outlines Pakistan’s long-term vision for building climate resilience. This would require an investment of $13.5bn over a 10-year period. Building better communications infrastructure and a more robust irrigation system, and designing efficient early warning systems to mitigate the effects of future natural disasters is not a luxury for Pakistan but an absolute imperative.
Of course, I am conscious that the Geneva conference marks only the beginning of a long and arduous journey. But a substantive outcome will reassure millions of imperilled people – who have already lost everything – that they have not been forgotten; that the international community will help them to rebuild their lives.
It will also remind us that we are all – increasingly – at the mercy of forces of nature that do not respect borders and can only be tamed by joining hands. It is, therefore, my sincere hope that our gathering in Geneva comes to symbolise our common humanity and generosity of spirit – a source of ho
pe for all people and countries who may face natural adversity in the future.