Pakistani Economic Stress Watch

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mody
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Re: Pakistani Economic Stress Watch

Post by mody »

https://www.msn.com/en-in/entertainment ... e3c88b733d

The Sickman Of South Asia is Strategically Irrelevant. Another good article by Lt. Gen P.R. Shankar (Retd)
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Re: Pakistani Economic Stress Watch

Post by kit »

mody wrote:https://www.msn.com/en-in/entertainment ... e3c88b733d

The Sickman Of South Asia is Strategically Irrelevant. Another good article by Lt. Gen P.R. Shankar (Retd)

While there were oodles of cash from the USA there were only noodles from China for which Pakistan was expected to be a permanent poodle :mrgreen:
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Re: Pakistani Economic Stress Watch

Post by Atmavik »

mody wrote:https://www.msn.com/en-in/entertainment ... e3c88b733d

The Sickman Of South Asia is Strategically Irrelevant. Another good article by Lt. Gen P.R. Shankar (Retd)

^^ the Gen is being kind to pakis. I would have called the article “the sick Donkey of Asia” with due respect to donkeys of Badin
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Selling state-owned entities through G2G
Pakistan plans to sell shares of listed state-owned entities (SOEs) to some Middle Eastern countries on a government-to-government (G2G) basis to bridge a $4 billion financing gap for the current fiscal year over and above about $36bn financial plan estimated by the International Monetary Fund (IMF).

To facilitate such transactions, the government has introduced in the national assembly a new piece of legislation — the Intergovernmental Commercial Transactions Act, 2022 — to provide “for a mechanism to carry out a commercial transaction under an inter-governmental framework agreement to promote, attract and encourage foreign states to have economic and business relations with Pakistan”.
Finance Minister Miftah Ismail says the proposed transactions — initially of LNG-based power plants and minority shares of listed SOEs — would involve buyback options for the government but the bill introduced in the assembly does not explicitly provide for such a possibility unless changes are made later.
As things stand, there is no legislation for negotiating inter-governmental agreements. Under the proposed law, the federal government will constitute a Cabinet Committee on Intergovernmental Commercial Transactions and its primary function will be to enter into inter-governmental agreements to allow SOEs of both countries to carry out a commercial venture either in Pakistan or in a foreign country.

The inefficient SOEs have been a key target of the IMF programme since its inception in July 2019, hence improving the SOEs by modernising the legal framework is one of the central objectives. In fact, seven transactions with good sale prospects were part of the IMF’s original agreement. These included two LNG-based power plants (Balloki and Haveli Bahadurshah), two smaller banks (SME and First Women Bank), two real estate projects (Jinnah Convention centre and Services Hotel Lahore) and 19 per cent stakes in Mari Petroleum. None could materialise except the hotel in Lahore.
The Asian Development Bank and the IMF had been engaged all along till the finalisation of a new bill that seeks to override more than six major laws dealing with corporate, privatisation, procurement and securities.

In a peculiar move, the law bars all courts from entertaining any application against any process undertaken for the G2G transaction and provides complete indemnity from any legal proceedings, procedural lapses or omission in the exercise or performance of any functions unless the act is shown, beyond a reasonable doubt to have been in bad faith.

Moreover, no agency or court will proceed against any procedural lapse or irregularity by any person in a commercial transaction or agreement unless there exists evidence of personal monetary gain with corroborative evidence of a link between such monetary gain to the undue benefit rendered to any party of the agreement.

Also, no person can be sued in his personal capacity for action taken in his official capacity and any procedural irregularity or lapse shall not affect, vitiate, set aside, annul or rescind a commercial transaction or a commercial agreement.
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Re: Pakistani Economic Stress Watch

Post by yensoy »

kit wrote:
yensoy wrote:Why ban something when you can tax it heavily? Makes sense to me that they would allow luxury items but heavily taxed so it can add to the coffers.
What about forex outgo ?!
Those of us who lived through all the years before 1991 know how difficult it used to be to purchase anything "foreign" (other than books, which bless our founding fathers, were allowed in without restrictions!). Yet smuggling was rampant and a trip to one of the smuggled goods markets was typically how one could purchase a 2-in-1, or a winter jacket, or cassettes, or a hero pen, or branded sneakers.

Despite having close to zero reserves, we opened up in 1991. Fast forward to today - we have a decent forex balance, imports are allowed but taxed, some rather heavily, local brands have risen to the challenge in many cases, consumer is happy, and smuggling is down. More importantly, sectors of the economy like Tourism aren't restricted because they don't have access to some luxury product.

I am not claiming here that Pakis have thought so far, but fact is that even with low forex one can permit imports. People are busy making me a pak pasand or pork pasand, I am neither - I am only stating facts.
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Re: Pakistani Economic Stress Watch

Post by vijayk »

https://twitter.com/suryakane/status/15 ... 1880654851
China may let the US pick up the pieces when Pakistan is financially falling apart, but it remains the principal partner vs. India.

Check the thread
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Re: Pakistani Economic Stress Watch

Post by mody »

https://timesofislamabad.com/02-Aug-202 ... ut-package

The IMF bailout final meeting set for end of August. The last condition seems to have been handing over Zawahiri to the Americans.
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Re: Pakistani Economic Stress Watch

Post by Atmavik »

PKR is up to 227 now
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

IMF toughens stance on loan tranche release
ISLAMABAD: The International Monetary Fund (IMF) on Tuesday conditioned the approval of the $1.2 billion loan tranche in late August with Pakistan’s ability to timely secure ‘adequate assurances’ from friendly countries for more loans to bridge financing gap, exposing Islamabad to demands by its bilateral creditors.

In a terse statement, Resident Representative of the IMF, Esther Perez, said that “with the increase in PDL (Petroleum Development Levy) on July 31, the last prior action for the combined 7th and 8th review has been met”.

The merger will pave the way for the release of nearly $1.2 billion tranche, as against the original schedule of the $2 billion.
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Re: Pakistani Economic Stress Watch

Post by g.sarkar »

https://www.dawn.com/news/1703020/pkr-m ... -interbank
PKR makes highest single-day gain of Rs9.59 in interbank
Talqeen Zubairi, August 3, 2022

The rupee made a strong recovery in the interbank market on Wednesday, rising by Rs9.59 against the dollar — its highest single-day gain ever.
The State Bank of Pakistan (SBP) said the rupee closed at Rs228.80, up 4.19 per cent, compared to yesterday's close of Rs238.38.
FAP Chairperson Malik Bostan said that the lower import bill for July had helped reduce the country's trade deficit, which in turn had eased the pressure on the rupee.
Business and economy journalist Khurram Husain said the rupee's recovery was due to a sharp drop in import payments after all letters of credit for oil in July were cleared and exporters rushed to close their open positions.
"August likely to see lower oil-related payments with near record stockpiles of petrol & diesel in the country today. Rupee reverting to where it should be after a brief spell of extraordinary pressure in July," he tweeted.
.....
Gautam
IMF loan must be coming. Khan has to pay the 40 pieces of silver for Ayman al-Zawahiri.
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Re: Pakistani Economic Stress Watch

Post by CalvinH »

g.sarkar wrote:https://www.dawn.com/news/1703020/pkr-m ... -interbank
PKR makes highest single-day gain of Rs9.59 in interbank
Talqeen Zubairi, August 3, 2022
Even forex market knows who assisted US in killing Zawahiri. What more confirmation does one need!
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Re: Pakistani Economic Stress Watch

Post by Neela »

Only is Pak is the exchange rate determinant on terrorists being fried or not.
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Re: Pakistani Economic Stress Watch

Post by SRajesh »

^^^ as long as the cult with a quest for 72 exists, The Pak Service Industry will thrive
The white man is an addict and will never be satisfied. He needs his Ego and the Gun massaged frequently
PKR may touch 300 but will still survive.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

The question is how many more high value terrorists are currently under TSPA's protection? This is basically an extortion racket if terrorists will be given up only against payment of $$$. Anyway unkil truly deserves such all-lies.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Everything is falling into place now.
Friendly countries ready to plug $4b financing hole
ISLAMABAD: Pakistan is set to get assurances of $4 billion additional financing from friendly countries this week that will pave the way for the revival of the International Monetary Fund (IMF) programme, State Bank of Pakistan (SBP) Acting Governor Dr Murtaza Syed said on Wednesday.

Saudi Arabia is the first country that has agreed to give commitment to the IMF, a top government source confirmed.

“The discussions are taking place on various options to secure assurances for $4 billion financing and we hope that it will be done this week”, said the acting governor in an exclusive interview with The Express Tribune. Pakistan was also in discussions with China for additional financing, he added.
China rolls over $2bn loan for a year
ISLAMABAD/KARACHI: China has rolled over $2 billion loan in safe deposits for cash-strapped Pakistan’s economy amid dwindling foreign exchange reserves, The News has learnt. Earlier, Pakistan’s battered currency appeared robust as it closed at 229 against dollar compared with 240.50 on Tuesday, gaining Rs11.50. It was reported that some exchange companies were selling dollars as low as Rs218 in panic.

China has rolled over three SAFE deposits. The first deposit of $500 million was due on June 27, 2022, the second $500 million matured on June 29, 2022 and the third $1 billion was due on July 23, 2022. China’s State Administration Foreign Exchange (SAFE) deposits of $2 billion have been rolled over for one year,” a top official of the Finance Division confirmed while talking to The News here on Wednesday.
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Re: Pakistani Economic Stress Watch

Post by yensoy »

^^^^ Great so now back to business as usual:
1. Pakfauj will purchase lots of new goodies from the Chinese including the attack helicopters and whatnot since this rupee recovery is their doing.
2. Pakelite will continue to send their kids to phoren (although PKR recovery has nothing to do with it, they already have their wealth overseas, but this makes it easier for the thin middle class wanting to get out) or at least keep purchasing dollars.
3. With recovery of rupee, competitiveness of exports will drop a little.
4. Since rupee has recovered, government rescinds some of the price increases of petroleum products to mollify people.

Since nothing fundamental will change, this cycle will repeat after a few months.
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Re: Pakistani Economic Stress Watch

Post by CalvinH »

Pakis exports went down 23.95% on month to month basis in July 2022 when PKR depreciated heavily. Is this seasonal?
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Re: Pakistani Economic Stress Watch

Post by Aditya_V »

CalvinH wrote:Pakis exports went down 23.95% on month to month basis in July 2022 when PKR depreciated heavily. Is this seasonal?
Lack of power, high energy costs (Diesel) transport and captive in factory power plants and input raw materials being too costly due high dollar value
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

Aditya_V wrote:
CalvinH wrote:Pakis exports went down 23.95% on month to month basis in July 2022 when PKR depreciated heavily. Is this seasonal?
Lack of power, high energy costs (Diesel) transport and captive in factory power plants and input raw materials being too costly due high dollar value
The kabila of AL Jihadistan is not scared by lack of power and diesel. After all one of its main industry is donkeys and leather.. and there are more than enough of the 2 legged kind to do all the donkey work..
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Re: Pakistani Economic Stress Watch

Post by rsingh »

So they had exports? and what were those?
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

rsingh wrote:So they had exports? and what were those?
Image

Others include Animals, fish, etc - Pakistan Exports By Category
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Re: Pakistani Economic Stress Watch

Post by RCase »

Manish_P wrote:
rsingh wrote:So they had exports? and what were those?
Others include Animals, fish, etc - Pakistan Exports By Category
The 'Others' being a large slice; I thought that was the world famous export from Al Bakistan aka Terroristan!
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

World Bank blocks $335m loans
ISLAMABAD: In the middle of a serious economic crisis, the World Bank has cancelled or withheld a $335 million concessionary loan quota for Pakistan after Islamabad failed to empower the debt office and could not harmonise the sales tax and property valuation procedures.

The Washington-based lender’s decision has put a question mark over the ability of Pakistani policymakers and bureaucrats, who have not been able to take corrective measures and lost claim over the cheaper loans.

Yet the finance minister approached the US for help to expedite the policy loan approvals despite his ministry’s failure to implement the required conditions.

Official documents showed that the World Bank cancelled an allocation of $188 million for Pakistan for the just-ended fiscal year.

The lender withheld another $147 million quota that it otherwise would have allocated in the new fiscal year, had Pakistan been able to meet the agreed conditions, according to the documents.
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

RCase wrote:
Manish_P wrote:
Others include Animals, fish, etc - Pakistan Exports By Category
The 'Others' being a large slice; I thought that was the world famous export from Al Bakistan aka Terroristan!
RCase sir, since the uniformed Faujis have their hands in all the industries in Bakistan, that 'industry' is by default included.. so what if the uniformed ones get the work done by the contractual non-uniformed ones.
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Re: Pakistani Economic Stress Watch

Post by CalvinH »

Pakis are net importer of cotton. Looks like they are selling low end cotton and buying high end for exported products.

Since we dont have a breakdown in the percentage fall in each category and the fall is large I am assuming that Textile industry has been hit and not able to fulfill orders for US holiday season.

What does paki imports as input to sustain these textile exports? I am guessing mostly machinery, cotton and fuel (gas for production, oil for transport). Cotton prices hit high in May-June. Most of the textile factories are gas driven. Unavailability of gas and high cotton prices may be a major factor for the drop in the production (and thus exports).

This should improve in next month as Cotton prices have come down in July. Gas would still be higher priced. Lets see if this country risk leads to long term supplier switch from the importers.

The other trend is that no one is buying more Paki goods as PKR becomes cheaper.
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Re: Pakistani Economic Stress Watch

Post by Cyrano »

Electricity, water, and reasonable political stability are all also below par compared to what a Bangladesh can offer.

Anyone placing large orders with Pak is taking a significant risk. No such risk takers when western economies are in recession and the charm of cheap fast fashion is wearing away.

The lynching and burning of a srilankan Hindu textile factory manager for alleged blasphemy - he removed religious posters pasted all over the factory and wanted full attendance and discipline for an upcoming bideshi client visit - must have chilled all buyers. This happened just a few months ago.
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

Cyrano wrote:...
The lynching and burning of a srilankan Hindu textile factory manager for alleged blasphemy - he removed religious posters pasted all over the factory and wanted full attendance and discipline for an upcoming bideshi client visit - must have chilled all buyers. This happened just a few months ago.
Reports said that Priyantha Kumara Diyawadana followed the buddhist faith.. not that it makes any difference to the Jihadis.

All non-muslims are kafirs and wajib-ul-katl
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Re: Pakistani Economic Stress Watch

Post by Anujan »

Mostly this OUTRAGE about blasphemy is due to something simple

The poor fella would have asked his employees to show up on time, or caught a couple of them stealing.
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Re: Pakistani Economic Stress Watch

Post by CalvinH »

The guy killed wasn't Zawahiri? :D
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Rs100bn cost overrun likely to hit Dasu hydropower project
ISLAMABAD: In a shocking development, the country’s most important project — Dasu hydropower project’s stage -1 with the capacity to generate 2160 MW hydel electricity — has got delayed by three years, and the cost overrun cost is feared to have gone up by Rs100 billion. The project earlier scheduled to come on stream in 2023-24 is now to be completed and commissioned in 2026-27, a top Wapda official told The News.
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

Baki gormint tells IMF that it will try to extort more from Abdul as Ahmed refuses to pay up..

Yawn - Govt mulls Rs 15 bn new taxes ahead of IMF meeting
The new measures are expected to be taken ahead of the IMF board meeting scheduled for Aug 24, which among others will approve the release of a $1.17 billion tranche for Pakistan as part of the extended fund facility (EFF).

An official source told Dawn that tax authorities have held out an assurance to the Fund to collect Rs 42 bn from fixed taxation of shopkeepers. The withdrawal of tax on retailers will now be collected from other taxpayers to make up for the loss.
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Re: Pakistani Economic Stress Watch

Post by Anujan »

Another interesting thing is that they are doing Madrassa math. Various state entities of Pakistan owe money, and it is not taken into account while drawing up expenditure or revenue.
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Re: Pakistani Economic Stress Watch

Post by disha »

Anujan wrote:The poor fella would have asked his employees to show up on time, or caught a couple of them stealing.
In the land of the pure, isnt' the above blasphemy itself? Abdul wants to do 5 times namaaz. Abdul gets to do 5 times namaaz. An unbeliever has no right to interfere!
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Re: Pakistani Economic Stress Watch

Post by disha »

Manish_P wrote:Baki gormint tells IMF that it will try to extort more from Abdul as Ahmed refuses to pay up..
A couple of things and keeping it very simple.

The World Bank funds large development projects. For example if you want to set up a 1GW wind farm, you go to the world bank and they arrange for a loan.

IMF aids failing countries. That is, IMF is the last resort to stop countries from failing over and avoid a complete economic collapse leading to humanitarian crises.

Both the world bank and IMF are borne out of Western greed. That is, the world bank gives you loans, but most of the supply comes from developed countries. For example power projects in Pakistan. At the same time, Pakistanis have partnered with "milking" Cheen as part of CPEC to develop and run power projects. I think the usual tactical brilliance of Pakistan might have come into play here, that is, 66% of the project is funded by cheen, 33% by world bank and the pakis will supply 1% of funding, usually wimmen and donkeys (and not necessarily in that order).

World bank wants to know the viability of the project, but that is opaque since the project is tied to CPEC funding which is all secret! And hence the funding goes out of the door. World bank can 'loosen' the requirement if Pakistan agrees to resource everything from the West, but then Cheen baap will be upset.

Without power and funds to develop other projects, Pakistan becomes a basket case of economy. So they rush to IMF, and IMF steps in with hard questions. Like if we give you X dollars, you have to raise your revenues, particularly tax revenues and cut spending, particularly the subsidies and get back on economic track and start paying back in interest.

Of course it is in the interest of IMF to ensure that the economy is forever in ventilator, so that they can continue to charge all kind of fees or open up doors for other western banks to step in. Also if the economy keels over, all the abduls will make a beeline to oirope and kanuckistan. Something they may not want to deal with. Who wants to deal with 1M bhooka-nanga abduls at your doorstep?

In the latest IMF-Baki deal, Pakistan raised the prices on petrol, electricity, natural gas etc. IMF staff looked at it and sent the IMF loan for approval. Generally it is a rubber stamp. But the Sharif govt. thought that the IMF funds are in bag and reduced the tariffs the very next day!

Hence the current dance of ring-a-ringa-roses with IMF.

This ring-a-ringa of Pakistan's economy must continue till 2030. So my hope is that we will have eight years of Pakistan, will it fall, will it not economy on edge. And then when it shatters, it will be actually a sigh of relief. By then India will be a global powerhouse, the power of Sauron will be waning, Saruman will be contained and the age of men will truly rise.
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Re: Pakistani Economic Stress Watch

Post by CalvinH »

IMF wins too when the country recovers with the country becoming a good market for premiere western goods and services. Plus west gets a reliable supplier of cheaper goods and services. So IMF/west wins both ways.

For Pakis the end game is a breakup in 4 provinces. Two (Balochistan and KP) will become a poor nation like Afghanistan. Punjab will be a decent size landlocked state dependent on remittances. Sindh will become a poor state eventually reducing to modern day Somalia in few decades.
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Re: Pakistani Economic Stress Watch

Post by Bart S »

Pakis have come up with this new farce on their so-called independence day:
Pakistan emerges as 24th largest economy in 75-year journey
https://www.dawn.com/news/1704774/pakis ... ar-journey
The nominal GDP rose from $3 billion in 1950 to $383bn in 2022, while GDP growth was recorded at 5.97pc in 2022 compared to 1.8pc in 1950. Per capita income jumped from $86 in 1950 to $1,798 in 2022.
These numbers are a joke. Even if we take their population numbers at face value, their per-capita cannot have gone up from around the $1300 mark to nearly $1800 in a year when their currency devalued by at least 30% against the dollar.
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Re: Pakistani Economic Stress Watch

Post by Anujan »

Pakistan became two countries from one. A 200% growth.
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Re: Pakistani Economic Stress Watch

Post by partha »

To mark the occasion of 75 years of "independence", State Bank of Pakistan has unveiled a new currency note with a wheel chair on it . According to the spokesperson of SBP, the wheelchair symbolizes the current state of economy.

https://i.tribune.com.pk/media/images/2 ... 33299.jpeg
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Saudi Arabia’s SDR quota: Pakistan to get another $2.8bn from IMF
ISLAMABAD: After Saudi Arabia’s decision to renew $3bn deposit at the State Bank of Pakistan, the IMF and Saudi Arabia have also discussed the possibility of Islamabad being able to borrow up to $2.8bn against Riyadh’s quota of Special Drawing Rights (SDRs) at the Fund, Financial Times reported on Sunday.

“Once finalised, Pakistan’s extent of borrowing from the IMF during the present financial year (July to June) will increase by $2.8bn. This will be a very important gesture,” a senior Pakistani official said.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

The firesale continues.
Govt to offer 51% stakes in PIA, Roosevelt to Qatar
ISLAMABAD: The government on Monday shelved a plan to sell two LNG-fired power plants to Qatar and instead decided to offer 51% stakes in the Roosevelt Hotel, New York, and the Pakistan International Airlines (PIA).
The sources said that the meeting discussed the possibility of selling the two LNG power plants to Qatar. But some of the participants were of the view that the country may not fetch the best price net of the Rs104 billion debt that these power plants owe and needed to be retired or converted into long-term financing.

After excluding the liabilities, the government might get $500 million to $600 million at best, which was politically difficult to sell to the people as the best price, they added.
It was also decided on Monday that Pakistan should offer 51% stakes in The Roosevelt Hotel, New York, and the PIA along with the management control to Qatar. But the PIA law bars selling more than 49% stakes and giving management control to any other party.

It was decided that the legal process to amend the PIA law should immediately be initiated to do away with the restricting clause.
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