Pakistan Economy: News & Discussion

[THESIS THORON]

 

[Lonewolf]

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Agent imran managed to put economy back on track , it went 350 billion after rebasing ,he brought it back under 300 billion today , well done agent

 

[THESIS THORON]

Agent imran managed to put economy back on track , it went 350 billion after rebasing ,he brought it back under 300 billion today , well done agent

seriously it came down to 300bil ??

 

[Lonewolf]

seriously it came down to 300bil ??

Check for yourself

 

[indiatester]

Indians are more optimistic about Pakis than Pakis themselves

It's done & dusted... would take 2 more weeks to be visible

Well, because we have too many "we are the big brother" types in our power structures and
Enough of the powers realize that India should be kept under check by propping up pakis.
Not to mention that the nuclear weapons they have.

 

[FalconSlayers]

seriously it came down to 300bil ??

It is 555 trillion PKR after rebasing. It was $347 bn when $1 = PKR 161 now 555 tn PKR = $300 bn coz $1 = 185 PKR.

 

[THESIS THORON]

It is 555 trillion PKR after rebasing. It was $347 bn when $1 = PKR 161 now 555 tn PKR = $300 bn coz $1 = 185 PKR.

hmm, I didtn knew at what pkr value they rebased

 

[FalconSlayers]

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Hey dude, don’t start fapping over small increases. The way its going it might breach 200 in 4-6 months.

 

[Rxbanda]

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Immi is cricketer. He's eyeing the currency to beat Saeed Anwar's highest test score. Next is Saeed Anwar's highest ODI score.
And then enter the league of Sachin, Sehwag, Rohit Sharma.
For now, he'll be happy if the new Paki batsman PKR can cross Fakhar Zaman's ODI highest.

 

[Shuturmurg]

Trade deficit widens to $35.4b | The Express Tribune

Deficit in Jul-Mar FY22 stands $14.6b higher than same period of previous year

tribune.com.pk

Trade deficit for first 9 months - 35.4 billion USD.

Full year target for current year : 28 billion

So, they are tracking towards 48-50 billion trade deficit. Remittance in feb was 2.2 billion USD. So, by extrapolating, ~27 billion rremittance for year. So they will need to borrow 22-24 billion USD atleast just to cover deficit. Plus money needed for loan repayment is separate.

 

[Concard]

Trade deficit widens to $35.4b | The Express Tribune

Deficit in Jul-Mar FY22 stands $14.6b higher than same period of previous year

tribune.com.pk

Trade deficit for first 9 months - 35.4 billion USD.

Full year target for current year : 28 billion

So, they are tracking towards 48-50 billion trade deficit. Remittance in feb was 2.2 billion USD. So, by extrapolating, ~27 billion rremittance for year. So they will need to borrow 22-24 billion USD atleast just to cover deficit. Plus money needed for loan repayment is separate.

Their financial year is different I suppose? It's July to June. In our case April to March. I would be surprised if the deficit clocks at $50 billion within next 3 months. Hopefully it does happen. Their remittances and exports will still not be able to cover the deficit. Add to that they are experiencing electricity shortage which will take a hit on exports. I thought they fixed their power shortfall. Apparently they haven't fixed it. Electricity shortfall in brutal summer and trade deficit. They are dancing on the road to bankruptcy. It's music to my ears.

 

[FalconSlayers]

Their financial year is different I suppose? It's July to June. In our case April to March. I would be surprised if the deficit clocks at $50 billion within next 3 months. Hopefully it does happen. Their remittances and exports will still not be able to cover the deficit. Add to that they are experiencing electricity shortage which will take a hit on exports. I thought they fixed their power shortfall. Apparently they haven't fixed it. Electricity shortfall in brutal summer and trade deficit. They are dancing on the road to bankruptcy. It's music to my ears.

Their remittances can’t save them for long, Imrandu launched “remittances promotion schemes” like sohni dharti remittances programme, or even their roashan digital accounts.

Their “remittances” are investments, fuckin 6-7% dollar returns ffs. This way they’ll have to take loans to payback the RoI on their Roshan accounts, now if we look at the sohni dharti remittances programme. Its 1-1.5% a year rewards.

The whole country is a banana republic deluded that these remittances are their permanent earnings, beggars forget that the money sent by overseas Porkistanis is just investments/sent for rewards under SDRP.

 

[FalconSlayers]

 

[FalconSlayers]

hmm, I didtn knew at what pkr value they rebased

I did say at $1 = 161 PKR, now its more than 185 PKR / $1. Its going to go down more.

Dollar shortage: In the first eight months of the current fiscal year, our imports came in at $52.5 billions and exports at $20.5 billion. What that means is in simple terms that the supply of dollars in Pakistan was $20.5 billion and demand at $52.5 billion.

When demand for dollar is high, it will lead to devaluation of Paki rupee, so according to my predictions (which obviously can go wrong, either will happen earlier or a bit later) Paki rupee will cross $1 = 200 PKR in next 5-6 months.

 

[FalconSlayers]

How long, on average, does one such cycle last? Does it even have a timeframe or is it random in it's span?

I want to see the next sil of this silsila.
I'd bust a nut at the 200 PKR = 1 USD mark.

Boom, bust, bailout, repeat

Pakistan’s economic growth has plunged to its lowest among regional peers and its entire trajectory can easily be described as a rollercoaster ride powered by boom-bust cycles that are punctuated by occasional or rather frequent bailouts.The low...

www.thenews.com.pk

 

[AVERAGE INDIAN]

Pakistan in turmoil, IMF's $6 billion bailout programme on hold
Aryan Prakash, Apr 05, 2022

According to a Pakistan media report, Islamabad will have to manage $5 billion as a bridge financing gap till June to avert a full-fledged balance of payment crisis and manage depleting foreign currency reserves in case the programme continues to be on hold.

With Pakistan in political turmoil, the economic woes of the country have multiplied manifold. The International Monetary Fund's $6 billion programme has been stalled, with no possibility of the next tranche's approval in the ongoing month, Pakistan daily The News reported.

Now, Pakistan will have to manage $5 billion as a bridge financing gap till June to avert a full-fledged balance of payment crisis and manage depleting foreign currency reserves in case the programme continues to be on hold.

After the IMF programme hit the roadblock, Pakistan's other creditors like the World Bank and The Asian Development Bank stopped the budgetary support and attached approval with the IMF's letter of comfort, the website reported.

The Pakistan officials said that only three options are left now which include negotiation for a consensus on the memorandum of financial and economic policies, wait for the elections till July and then extend the IMF programme beyond September or scrap the existing programme and negotiate a fresh deal with the IMF with the new government.

Nevertheless, Pakistan will have to manage $5 billion for the next few months for averting a crisis like situation. “A financing gap of $2 billion would emerge from the IMF as Islamabad envisages external financing from the Fund through approval of seventh and eighth reviews under $6 billion Extended Fund Facility (EFF). Pakistan will have to manage another $3 billion from bilateral donors to bridge the yawning financing gap,” a top official told the Pakistan media outlet.

MIZZILE NEWS

Pakistan in turmoil, IMF's $6 billion bailout programme on hold

According to a Pakistan media report, Islamabad will have to manage $5 billion as a bridge financing gap till June to avert a full-fledged balance of payment crisis and manage depleting foreign currency reserves in case the programme continues to be on hold.

www.hindustantimes.com

 

[Butter Chicken]

UAE rolls over $2 billion Pakistan debt​

The UAE has rolled over $2 billion debt for one more year, Finance Secretary Hamid Yaqoob Sheikh told The Express Tribune on Monday. The facility had matured last month and Pakistan had sought a three-year extension.

The outgoing prime minister, Imran Khan, had requested the $6 billion facility in November 2018 but the UAE approved $2 billion for a period of three years that became effective in early 2019. It was the second major facility that a foreign country rescheduled in past 10 days.
Yet the foreign exchange reserves remained on a sliding path despite a major relief from China and the UAE.

The Finance Ministry spokesman said that the UAE had not yet taken a decision on the rollover of another $450 million debt that matured few weeks ago. Pakistan had not paid back the $450 million debt, although Dubai had demanded its money back.

UAE rolls over $2 billion Pakistan debt | The Express Tribune

IMF expresses willingness to engage with next govt

tribune.com.pk

 

[FalconSlayers]

 

[AVERAGE INDIAN]

Public debt soars by Rs18 trillion

ISLAMABAD:


Debt breakdown

The federal government’s total domestic debt increased to Rs27.7 trillion, an addition of Rs10.9 trillion (or 65%), in the last three and a half years. Before Imran Khan took office in 2018, the domestic debt stood at Rs16.4 trillion.

The debt obtained through floating bonds increased to Rs17.7 trillion, up from Rs8.7 trillion just three and a half years ago.

The central bank for the first time included a debt of Rs374 billion that it gave to the federal government on account of increase in Pakistan’s share in the International Monetary Fund (IMF).

The short-term debt decreased from Rs9.6 trillion to Rs5.5 trillion after the outgoing government rescheduled its borrowing from the central bank.

The external debt of the federal government increased at an alarming pace of 90% to Rs15.1 trillion in the last three and a half years.

There was a net increase of Rs7.1 trillion in the external debt, largely due to currency depreciation and building foreign currency reserves through borrowing.

At the end of August 2018, the external debt stood at Rs7.8 trillion.

The Rs12.4 trillion worth of external government debt does not include loans obtained for reserves building and currency swap arrangements. These loans are the responsibility of the central bank.

By February 2022, the rupee-dollar parity was at Rs177.5 to a dollar. In August 2018, the value of the dollar was equal to Rs124.2, suggesting a massive depreciation of nearly Rs54 or 29.4%.

The current parity is over Rs185 - the lowest value in the country’s 75-year history. The direct consequence of the mounting debt pile is a huge increase in the cost of debt servicing. The debt servicing, which three and a half years ago was Rs1.5 trillion, is expected to stay above Rs3.2 trillion by the end of current fiscal year.

The outgoing government added over Rs18 trillion to the public debt during its three-and-a-half-year stint, which was more than the liabilities accumulated by any government in 75 years, reveals a central bank statement.

As a result, the federal government debt jumped to Rs42.8 trillion by February 2022, an addition of Rs18.1 trillion in three and a half years, according to the State Bank of Pakistan’s (SBP) monthly debt bulletin released on Tuesday.

The two rival parties of Prime Minister Imran Khan, Pakistan Muslim League-Nawaz (PML-N) and Pakistan Peoples Party (PPP), had added nearly Rs18 trillion to the public debt in 10 years - a mark that the Pakistan Tehreek-e-Insaf (PTI) government crossed in three and a half years.

The figure of Rs42.8 trillion is exclusive of the liabilities and debt obtained in March, which was the last month of the PTI government.

Khan lost power on Sunday (April 3), when he allegedly took an unconstitutional step to avoid defeat in a no-confidence motion filed by the opposition parties.

From September 1, 2018 to the end of February 2022, the PTI government on an average added Rs14.2 billion per day to the public debt, which was more than double the PML-N period’s average increase of Rs5.6 billion a day.

From 2008 to 2018, the per day increase in the public debt was Rs2.7 billion, which in the past three and a half years increased to Rs14.2 billion.

The total public debt increased by a whopping 73% from September 2018 to February 2022, an unsustainable 20.3% average increase each year.

In February 2019, Imran Khan told The Express Tribune at the PM’s Office that if he could not bring the public debt down to Rs20 trillion by the end of his term, it would mean that his government failed to deliver.
The government also amended the Fiscal Responsibility and Debt Limitation Act of 2005 to relax the debt ceiling after it could not bring the debt burden down to 59% of gross domestic product (GDP) by the end of last fiscal year.

During his term, Imran Khan could not strengthen the Debt Policy Office that was being run on an ad hoc basis.

The finance ministry has also been left at the mercy of commercial banks that are taking loans from the central bank at around 9.8% but are giving funds to the government at 12.7% for up to one year.
When the PML-N government completed its five-year term, the total public debt stood at Rs24.95 trillion, or equal to 72.5% of GDP. In just three years, it surged to 83.5% of GDP before the rebasing of economy.

Imran Khan had also set up a debt inquiry commission to investigate the reasons behind the addition of Rs18 trillion to the debt stock in 10 years. But its findings were never made public.

The accumulation of debt is a direct result of the gap between expenditures and revenues, which is widening due to the inelasticity of debt servicing and defence needs, and the Federal Board of Revenue’s (FBR) failure to enhance revenue collection to a sustainable level.

Steep currency depreciation also contributed to the federal government’s debt.

HARAMI LINK MUJRA MASALA

Public debt soars by Rs18 trillion | The Express Tribune

PTI govt on average added Rs14.2b per day to debt in three and a half years

tribune.com.pk

 

[FalconSlayers]

Pakistan’s central bank has supplied record high financing worth Rs3.37 trillion to banks for a period of seven days to address short-term liquidity crunch in the financial market, as demand for financing from the government stands high at present, bankers told The Express Tribune

The State Bank of Pakistan (SBP) has injected a record high amount of over Rs3 trillion for seven days for the second time on Friday in the past three weeks through its open market operations (OMOs). The amount of Rs3 trillion stands equivalent to 15% of the total deposits in banks at present, according to the central bank data available since March 24, 2008.

“The central bank is indirectly lending to the government through commercial banks,” a banker said while speaking on the condition of anonymity.

The central bank has closed its doors to the government for borrowing directly from it under the International Monetary Fund’s (IMF) conditions for the $6 billion loan programme and through the recent amendments made in central banks rules. Therefore, the central bank is lending to commercial banks and they are further supplying the required financing to the government, he said.

Banks were facing liquidity crisis after having lent a notable amount to the government by buying the government’s shortterm security papers like three to 12-month T-bills, he said.

Sometimes, commercial banks also borrow from the central bank in advance through OMO (injection) keeping in view the outlook for demand of funds from the government, he said.

“The rate of borrowing through OMO (injection) stands low compared to the one at which commercial banks invest their funds in T-bills,” another banker said.

The breakup suggests that the central bank has also injected liquidity worth Rs283.65 billion to Shariah-compliant banks on Friday after quite a long time.

Read SBP jacks up interest rate to 12.25%

“This is for the second time that the central bank has injected funds into Islamic banks since the service became available to us since December 2021,” Meezan Bank SEVP and Head of Shariah Compliance Ahmed Ali Siddiqui said.

The Islamic banks faced shortterm liquidity crunch after having lent money to the government by buying Sukuks (Islamic bonds) from the leadership in the recent past, he said.

“Islamic banks have bought Sukuks worth Rs478 billion over the past three months,” he said, adding that they have provided the required funds to the government at a significantly low price compared to commercial banks.

The central bank holds the short-term OMO (injection) operations for one day, three days, seven days day or 21 days almost every week but the size of the injections has been growing rapidly with the passage of time.

The central bank data, available since March 24, 2008, suggests that the central bank made OMO (injection) of over Rs3 trillion for the first time on March 18, 2022. It injected the lofty amount of Rs3.08 trillion in conventional commercial banks on Friday.

Earlier, the large injection operations used to be in the range of Rs1-2 trillion. They were also of amounts much lesser than Rs1 trillion, usually.

The bankers and financial analysts speculated that the commercial banks have been borrowing from the central bank through OMO (injection) at a cheaper rate and investing the amount in short-term papers at a comparatively higher rate. On the other hands, the depositors were being paid a meager return on their deposits.

They said the central bank holds frequently injects funds into the market on short-term basis to avoid financial crisis and to maintain the key policy rate at pre-determined level ie 12.25% at present. If the central bank avoid injecting the money, the policy rate may increase beyond the one decided by monetary policy committee (MPC) of the central bank.

SBP supplies Rs3.37tr to banks | The Express Tribune

Amount will support banks to address liquidity crunch in financial market

tribune.com.pk