Pakistani Economic Stress Watch

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g.sarkar
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Re: Pakistani Economic Stress Watch

Postby g.sarkar » 09 Oct 2018 00:46

nam wrote:With the Pak going international with their bowl, time for us to speed up BMD test and announce some major arms purchase like we did with S400.
Hope GoI & Services announce these, along with some ratcheting up of threat of more Surgical strikes and hammering on LoC
We want the Pak to spend more cash on buying arms.

I agree. Pakistan is spending too little on military and turning it's back on the path of Allah. It does not go well with the image of a country that heads Islamic peoples. Modiji should implement a Reagan type of Star wars initiative to bring out the best of Pakistan. It is the least we can do help out a brother.
Gautam

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Re: Pakistani Economic Stress Watch

Postby menon s » 09 Oct 2018 14:48

g.sarkar wrote:
nam wrote:With the Pak going international with their bowl, time for us to speed up BMD test and announce some major arms purchase like we did with S400.
Hope GoI & Services announce these, along with some ratcheting up of threat of more Surgical strikes and hammering on LoC
We want the Pak to spend more cash on buying arms.

I agree. Pakistan is spending too little on military and turning it's back on the path of Allah. It does not go well with the image of a country that heads Islamic peoples. Modiji should implement a Reagan type of Star wars initiative to bring out the best of Pakistan. It is the least we can do help out a brother.
Gautam


THE strategy to kill Paki Pigs is already there.
its called IED.
ISOLATE...............10 YRS
EMASCULATE---------5 YRS
DIVIDE-----2 YRS.

:rotfl:

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Re: Pakistani Economic Stress Watch

Postby arun » 09 Oct 2018 15:49

^^^ IED Mubarak to your IEDlogical gem :rotfl:

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Re: Pakistani Economic Stress Watch

Postby arun » 09 Oct 2018 15:50

X Posted from the Terroristan thread.

anupmisra wrote:Why all of a sudden there's an urgency?

Govt decides to ‘immediately’ approach IMF

“Talks with IMF would begin immediately after Prime Minister (PM) Imran Khan gives the go-ahead to do so,” said the finance minister in a video.


https://nation.com.pk/08-Oct-2018/govt- ... proach-imf


Meanwhile Reuters reports that IMF Chief Economist Maurice Obstfeld has said “The government has expressed its desires to enact deep structural reforms that might break the cycle of Pakistan needing financial support from the Fund”.

:wink: Polite euphemism that Imran Khan Niazi has as usual climbed down from railing against fresh borrowings, U turned and agreed to the IMF doing a deep insertion of empty cigar case without KY Jelly up the Mohammaden Terrorism Fomenting Islamic Republic of Pakistan’s fundament :lol: :?:

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Re: Pakistani Economic Stress Watch

Postby arun » 09 Oct 2018 16:05

Trikaal wrote:Summary:
IMF wants Pkr to be devalued to 150 Pkr to a dollar
IMF wants Interest rates to rise above 10%
IMF wants Pakistan to make public CPEC-OBOR bill amount and terms(because that is what it is, a bill, not an investment or a loan)

All 3 are like body blows to Paki economy and prestige. They might survive but they will be belly crawling for a long time.


The slide of the PKR to IMF’s level seems to have once again begun after a small hiatus.

Dollar shot up to RS 138

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Re: Pakistani Economic Stress Watch

Postby nam » 09 Oct 2018 16:07

Paks getting IMF loan is not a good thing.

Need to spread the word that IMF is asking Pak to roll back nuke program.

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Re: Pakistani Economic Stress Watch

Postby Trikaal » 09 Oct 2018 16:35

nam wrote:Paks getting IMF loan is not a good thing.

Need to spread the word that IMF is asking Pak to roll back nuke program.

They are going to get it. It's fait accompli at this point. Imran Khan has made churan out of his balls and accepted the karza, to hell with the so called khudmuktaari. Now all that is left is to see how far US will humiliate and bend Porkis over, before inserting the loan stimulus. Expecting easy access to Afg, Taliban back to talking table, silent Afghanistan border among a few. If they are willing to bend further, maybe even action against the Haqqanis but maybe that's a bit too far.

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Re: Pakistani Economic Stress Watch

Postby arun » 09 Oct 2018 16:46


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Re: Pakistani Economic Stress Watch

Postby abhijitm » 09 Oct 2018 16:58

nam wrote:Paks getting IMF loan is not a good thing.

Need to spread the word that IMF is asking Pak to roll back nuke program.

Countries have not prospered by taking IMF bailout. A bailout means something is fundamentally wrong with its economy and IMF loan is only a band-aid.

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Re: Pakistani Economic Stress Watch

Postby nam » 09 Oct 2018 17:04

abhijitm wrote:Countries have not prospered by taking IMF bailout. A bailout means something is fundamentally wrong with its economy and IMF loan is only a band-aid.


It is not if Paks will succeed or fail. IMF will force them to reform.. which we need to prevent. Pak need to maintain PIA and other gravy train companies. Also spend lot of money on arms and nuke.Chinese should give them more loans etc.

There has been quite some privatization moves in Pak recently...

The biggest success story of IMF forcing a country to do things right is... ofcourse India. We surely don't want that to happen.

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Re: Pakistani Economic Stress Watch

Postby TKiran » 09 Oct 2018 17:13

IMF is giving loans so that CPEC loans are paid off. Pakis can say"balls" to IMF which they have already done 12 times already. But they can't say that to China. Pakis will say we will reform till they get the money, and after that they will say "balls" to you, we are not reforming.

Imagine a drug addict... Just not possible to reform...

Reforming means giving up Terrorism. Nay that's not happening..

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Pakistani Economic Stress Watch

Postby Peregrine » 09 Oct 2018 17:52

TKiran wrote:IMF is giving loans so that CPEC loans are paid off. Pakis can say"balls" to IMF which they have already done 12 times already. But they can't say that to China. Pakis will say we will reform till they get the money, and after that they will say "balls" to you, we are not reforming.

Imagine a drug addict... Just not possible to reform...

Reforming means giving up Terrorism. Nay that's not happening..
TKiran Ji :

Terroristan - despite a Million Promises WILL MOST DEFINITELY repay Chinese Loans with Funds received from the IMF.

Later on Terroristan will throw its hands up in the air and say "Dear & Respectful I M F WE CANNOT REPAY YOU AS PER SCHEDULE, please give us more time to repay your loans!

Cheers Image

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Re: Pakistani Economic Stress Watch

Postby Vips » 09 Oct 2018 19:12

Pakistan knocks at IMF door to avoid default.

After weeks of dilly-dallying, Pakistan on Monday announced approaching the International Monetary Fund (IMF) for a bailout package aimed at avoiding default on international debt obligations and restoring confidence among the investors.

“After taking into account the current situation and consultation with leading economists, the government has decided to approach the IMF for a bailout programme,” announced Finance Minister Asad Umar through a recorded video message.

The government took the decision after friendly countries did not bail it out despite Prime Minister Imran Khan himself went to Saudi Arabia with a begging bowl.

Adviser to the Prime Minister on Commerce Razak Dawood, who accompanied the prime minister, had described his Saudi Arabia visit as “it was awful to beg from Saudi Arabia”.
:rotfl:

T

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Re: Pakistani Economic Stress Watch

Postby arun » 09 Oct 2018 19:46

TKiran wrote:IMF is giving loans so that CPEC loans are paid off. Pakis can say"balls" to IMF which they have already done 12 times already. But they can't say that to China. Pakis will say we will reform till they get the money, and after that they will say "balls" to you, we are not reforming.

Imagine a drug addict... Just not possible to reform...

Reforming means giving up Terrorism. Nay that's not happening..



After US Secretary of State Michael Pompeo’s comment back in July 2018, I doubt one needs to do a fearful dhoti shiver that “IMF is giving loans so that CPEC loans are paid off”. The US has after-all still has the largest voting power in the IMF and together with its NATO poodles Allies and India’s helping hand should be able to stymie any egregious attempts by 4.5 friends of Major Non-NATO Ally, the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan, to foist any jaziya type bailout for the Islamic Republic at the IMF 8) :

Interview With Michelle Caruso-Cabrera of CNBC
Interview
Michael R. Pompeo
Secretary of State
George Marshall Room
Washington, DC
July 30, 2018 ……………………..

QUESTION: One of the countries that’s really gorged on One Belt, One Road is Pakistan – so much so they’ve taken on all kinds of debt. They might actually have to go to the IMF, the International Monetary Fund, for a bailout because they’ve taken on so much Chinese debt. The IMF is funded by U.S. taxpayer dollars – many other countries as well, but if they go to the IMF for a bailout, there’s a chance that U.S. taxpayer dollars are going to go towards Chinese-directed companies as part of that bailout. Are you concerned about that? Are you monitoring that?

SECRETARY POMPEO: So two thoughts. First, there’s new leadership in Pakistan, and we welcome engagement with them in a way that we think will benefit each of our two countries. Second, make no mistake: We will be watching what the IMF does. There’s no rationale for IMF tax dollars – and associated with that, American dollars that are part of the IMF funding – for those to go to bail out Chinese bondholders or China itself.

US State Department

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Re: Pakistani Economic Stress Watch

Postby Katare » 09 Oct 2018 19:57

One can see Pakistan's current economic problem and why SA and China are not willing to help in following analogy...

Lets say Pak economy is a 10 gallon fish tank that needs to maintain certain level of water in it for fishes to survive. The tank has a fresh supply of water from a faucet but also have major leaks (some planned some unauthorized) that add up to more than what the faucet can supply. Net result is that the Paki tank is loosing the water level at alarming rate. To solve this Pakistan goes to its friends/sugar daddies i.e. China and KSA to ask can you please help us by adding a gallon or two of water into my tank, I am close to running out. The Chinese and SA would point out that adding couple of gallon of our water would not help you, at best it would only delay the inevitable for a few months.

There are only two solutions -

1) Add another faucet with continuous supply of water to the tank to stabilize the water level. No one's going to sign up for free dole of those magnitudes for eternity. The fresh supply must come from the tank itself by way of better and sustained tax revenue generations and Rupee depreciation.

2) Fix some of the leaks (subsidies, defense, PSUs) and learn to live with in the means of domestic economy (reduce growth rate to control inflation).

Once the country agrees to these two solutions a bridge loan can be had from multiple sources. Only IMF have the expertise and experience to provide a viable technical program that can stabilize the Paki tank. Not only that IMF also have means and expertise to monitor/guide the execution of the whole thing.

nam's post above describes the same very clearly and like he said India is the living example of how to do it right. Not to forget that we were in and out of IMF bailouts too until MMS/PVNR showed the true courage to do the right thing. Additional loan is not the solution to Pakistan economy's needs; only way it can come out of the ditch is by implementing a reform package in full measures with honesty. I would bet my precious penny that the tactical brilliance would get the best of Pakistan, as usual.

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Re: Pakistani Economic Stress Watch

Postby TKiran » 09 Oct 2018 20:26

Katare ji, there's difference between a drug addict who has the support of their family members, who has a genuine inclination to come out of the habit, and a person who has no values.

In the first case also it's very difficult to come out, still has a 5-10% chance that they may come out.

But when a person doesn't have any values, who is persistent on seeing others suffer even if it means his own fall, there's no way that person can come out.

The simplest solution for Pakistan to come out would have been to sincerely stop Terrorism against India and Afghanistan, that would have been the best under these circumstances. But no, India is enemy, and they want US to go away from Afghanistan... They genuinely don't care about their own population or they have shown any softening or realization to get out of this mess. They knew about this situation atleast 1year back. But they continued as if there's no problem. Even a week back they didn't need IMF loan.

Once they receive the money, they will not reform, they will go back to their business of terrorism...

Once this round of IMF loan money is over, their next plan is to sell / 99 year lease to China of Gwadar, then next would be 99 year lease of Gilgit-Baltistan, then they will transfer their clown jewels to Saudis 5nos or 10 nos. Etc etc..

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Re: Pakistani Economic Stress Watch

Postby VKumar » 09 Oct 2018 21:57

If Pakistanis are true to type they will agree to IMF demands, do pappi-jappi with the candle kissers, collect the money, make a pretence of peace and as soon as they can, will send over teams of terrorists.

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Re: Pakistani Economic Stress Watch

Postby souravB » 10 Oct 2018 03:45

I have a newbie pooch.
IMF loans come with strict rules to decrease spending and increase income in budget. The 1st thing even me as a fiscally illiterate person will see is their spending on Millitary. Their defense budget is the biggest chunk of the total budget.
So can/will IMF ask them to decrease spending there? ask them to backtrack on newer acquisitions, reduce personnel, sell existing platforms.
While Bakis are talking to IMF, they are also buying new drones which will cost upwards of a Billion $.
Thanks in advance for any clarification.
Cheers.

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Re: Pakistani Economic Stress Watch

Postby yensoy » 10 Oct 2018 06:14

^^^^ I think these days IMF cannot come across as too prescriptive or over-bearing. IMF officials would probably lay out all the options on the table and let the Pakis pick the medicine most acceptable to them. And to the Pakis, military cuts would be non-negotiable (and even if they did agree to cut the overt military budget, they would basically move over military expenses like they did with pensions to other civilian headings).

With a quarter of the government budget each for debt servicing and the military, only the remaining 50% or so of the budget can be tweaked with to satisfy the IMF. That part of the budget is for welfare and developmental programs. Welfare programs can't stop because of the promises made to the population, leaving the developmental programs as the main target for cuts.

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Re: Pakistani Economic Stress Watch

Postby arun » 10 Oct 2018 08:39

X Posted from the Terroristan thread.

This U Turn by Imran Khan Niazi's PTI regards taking loan from the IMF must be preserved :lol: :

Falijee wrote:Immy's "Gutter Language" Comes To Haunt Him Back :mrgreen:

‘Our PM is a beggar’: PTI deletes old tweet as govt approaches IMF
Pakistan Today
Oct 9, 2018
Image


With the Pakistan Tehreek-e-Insaf (PTI) government finally making the “difficult decision” of approaching the International Monetary Fund (IMF) for a bailout to address the mounting balance of payments crisis faced by the country, the ruling party has drawn the ire of thousands of social media users.Amid the criticism that PTI is facing over its “double standards” – censuring previous governments’ practice of seeking loans and resorting to the same – the official Twitter account of the party’s Lahore wing has deleted a tweet that criticised the Pakistan Muslim League-Nawaz (PML-N) government for approaching the IMF.

Interestingly, the IMF has "clarified" that no official "application for loan " has yet been received has been received from the almost bankrupt Pakis

IMF says not approached by Pakistan for assistance
Reuters
Oct 9, 2018

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Re: Pakistani Economic Stress Watch

Postby Vips » 10 Oct 2018 17:56

Datapoint: Total number of credit card holders in Pakistan is 1.3 Million.

We are cash based currently, as that is a choice dictated by our target demographic. There are only about 1.3 million credit card users throughout Pakistan and they do not form our core market. We are planning to introduce debit card support, which should be functional by the end of this year.

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Re: Pakistani Economic Stress Watch

Postby g.sarkar » 11 Oct 2018 00:42

https://www.dawn.com/news/1438021/deval ... by-rs900bn
Devaluation pushes up total debt by Rs900bn
Khaleeq Kiani, October 10, 2018
ISLAMABAD: Pakistan’s total debt and liabilities have increased by almost Rs900 billion in a single day and Rs1.4 trillion since Aug 18 because of steep currency devaluation. Informed sources said the erosion in exchange rate by about Rs9.50 against dollar on Tuesday was a signal that the government was completing prior actions to secure another programme from the International Monetary Fund that required Pakistan to allow a full free float exchange rate and increase policy rate and utility tariffs. The government has already increased gas prices by a record 35pc last month and is in the process of finalising increase in electricity tariff, proposed by the regulator at Rs3.90 per unit or about 33pc from the existing rate. The cost of production would go up with all these factors over the coming months. These sources said the government had signalled devaluation after consecutive meetings with the prime minister, including one before the departure of Finance Minister Asad Umar to Bali, to request an IMF support package. There was no reason for the dollar to appreciate so much in a day when there was no hefty repayment due.
Officials said the latest exchange rate would help contract import bill that stood at $55bn last year and help contain the current account deficit.
At the same time, the increased cost of essential imports like oil and liquefied natural gas would impact industrial, commercial and transport costs significantly. The imports of oil and LNG alone are estimated at about $18bn.
.....
Gautam

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Re: Pakistani Economic Stress Watch

Postby arun » 11 Oct 2018 19:15

The latest Imran Khan Niazi U Turn is official. The Mohammadden Terrorism Fomenting Islamic Republic of Pakistan is going to beg from the IMF and Imran Khan Niazi can now use the same words he had used for former PM Nawaz Sharif and tweet "Our PM begs money from IMF like beggars."

PRESS RELEASE NO. 18/390

Statement by IMF’s Managing Director Christine Lagarde on Pakistan

October 11, 2018

Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), made the following statement in Bali, Indonesia today:

“Today, I met with Pakistan’s Minister of Finance, Revenue and Economic Affairs, Asad Umar, Governor of the State Bank of Pakistan Tariq Bajwa, and members of their economic team. During the meeting, they requested financial assistance from the IMF to help address Pakistan’s economic challenges.

“An IMF team will visit Islamabad in the coming weeks to initiate discussions for a possible IMF-supported economic program. We look forward to our continuing partnership.”

IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: WAFA AMR

PHONE: +1 202 623-7100EMAIL: MEDIA@IMF.ORG


IMF Press Release:

Statement by IMF’s Managing Director Christine Lagarde on Pakistan

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Re: Pakistani Economic Stress Watch

Postby arun » 11 Oct 2018 19:24

Vips wrote:Datapoint: Total number of credit card holders in Pakistan is 1.3 Million.

We are cash based currently, as that is a choice dictated by our target demographic. There are only about 1.3 million credit card users throughout Pakistan and they do not form our core market. We are planning to introduce debit card support, which should be functional by the end of this year.



Just to disabuse any wandering citizen of the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan that 1.3 Million credit cards is a “Regional Game Changer” :lol: , a Counter Data Point :wink: :

India had 37.48M credit cards, 861M debit cards in March 2018 :

Medianama

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 11 Oct 2018 19:41

Exports grow by 4.6pc

Exports grew by 4.6 per cent during the first quarter of the current fiscal year despite government’s efforts to bring double-digit growth, according to data released by the Pakistan Bureau of Statistics on Wednesday.
The paltry growth in export proceeds will hurt government’s efforts to ease difficulties on the external front.
In rupee terms, export proceeds rose 23.12pc in the first three months of the current fiscal year, owing to substantial depreciation in the exchange rate since last year.
In the open currency market, dollar is currently trading at around Rs138.
Since December last year, the rupee has lost of its value 30 pc against the greenback.
Pakistan’s trade deficit rose to an all-time high of $37.6bn during the FY2017-18 increasing by 15.8pc from the FY2016-17.


https://www.dawn.com/news/1438301/exports-grow-by-46pc

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 11 Oct 2018 19:43

Devaluation: The day after — food prices start creeping up

The day after the rupee saw its largest single day fall in over a decade, food prices in wholesale and retail markets already began their inevitable journey up.
Some food items are imported, like cooking oil, and others such as tea whitener use imported packaging and inputs.
Pakistan imports around $6.2 billion worth of food items
“This is the first shock of rupee-dollar parity on prices and nobody knows about the fate of our currency. Consumers will have to brave another burden of more price shocks in the future it seems, given rising gas and power tariff to come,” he said.


https://www.dawn.com/news/1438302/deval ... reeping-up

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 11 Oct 2018 19:49

Don't do it, afghanistan! This is a trap similar to the Indus Water Treaty signed by India.

Pakistan, Afghanistan urged to sign treaty on Kabul River water

Experts at a national conference here on Wednesday called for agreement between Pakistan and Afghanistan on the apportionment of the Kabul River water and warned that construction of reservoirs on the river would disturb its entire ecology.
In his opening remarks, Dr Asif said that Afghan government with the financial and technical support of India had planned construction of 12 reservoirs on the Kabul River that would generate 2400 megawatts electricity.
He said that construction of dams on the river would drastically affect agriculture sector in Pakistan, especially in Khyber Pakhtunkhwa as the water flow in three main tributaries of the river had already been declined by more than 50 per cent.
He stressed the need for having a bilateral water treaty between Islamabad and Kabul for the reasonable and equitable use of the Kabul River water.
The experts said that the Kabul River played key role in irrigating lands in Peshawar, Charsadda, Nowshera and adjoining areas. [/quote]

Image

https://www.dawn.com/news/1438211/pakis ... iver-water

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Re: Pakistani Economic Stress Watch

Postby arun » 11 Oct 2018 19:53

X Posted from the Analyzing CPEC thread.

Our representative on the IMF Executive Board should ensure that Christine Lagarde’s commitment on obtaining full details on Conning Pakistan to Enrich China aka CPEC is 800% adhered to. Also any possibility of the IMF loans being used to allow China to bail out of Pakistani commitments must be squelched. Juicy bits about Higher than Himalaya’s, Deeper than Indian Ocean, Sweeter than Honey, As close as lips to Teeth, Stronger then Steel Iron Brother ripping off the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan should be leaked thereafter:

Transcript of International Monetary Fund Managing Director Christine Lagarde's Opening Press Conference, 2018 Annual Meetings, Bali, Indonesia
October 11, 2018

Participants:

Christine Lagarde, Managing Director, IMF
David Lipton, First Deputy Managing Director, IMF
Gerry Rice, Director, Communications Department, IMF …………………

MR. RICE: Thank you, Madame Lagarde. Let me take The Wall Street Journal in the front row, please.

QUESTIONER: Madame Lagarde, thanks for taking questions.

The Government of Pakistan has said this week that it is going to seek a program from the IMF. One of the issues here is that the Government of Pakistan has incurred quite large debts, many of them from China as part of China's Belt and Road Initiative. A large number of countries have incurred very large debts as part of this initiative, and policymakers in the U.S. have expressed concerns about whether a program to Pakistan and other countries so indebted would be kind of a backdoor bailout of China.

I was wondering if you could address how the IMF would approach a program with Pakistan and other countries who may find themselves in this situation, given these concerns that have been raised about the Belt and Road Initiative. Thank you.

MS. LAGARDE: Well, first of all, I have seen, like you, the press statement, but I have not yet seen the Finance Minister of Pakistan. And David and I are going to see the delegation this afternoon. So I am assuming that there might be a program request on their part, but that has not been discussed. And we will explore that this afternoon.

Second point, the IMF is available to its entire membership. We have 189 members, and we have to serve the entire membership, each and every one of them.

Third point, in whatever work we do, we need to have a complete understanding and absolute transparency about the nature, size, and terms of the debt that is bearing on a particular country. And to really understand the extent and composition of that debt, both in terms of sovereign, in terms of state‑owned enterprises and the like of it, so that we can actually really appreciate and determine the debt sustainability of that country, if and when we consider a program.

A fourth point, this issue of debt transparency and an appropriate understanding of debt is not only going to apply to Pakistan. It has to apply to all countries. And it is part of a necessary disclosure exercise that we have to agree with our members for the purpose of a debt sustainability analysis, but also for the purpose of the governance and corruption project that has been approved by the Board of the IMF, and for which we are now moving into the implementation period. Again, on that point, fully understanding what the liabilities are and to whom they have been assigned is a necessity. ……………..


IMF Press Release:

Transcript of International Monetary Fund Managing Director Christine Lagarde's Opening Press Conference, 2018 Annual Meetings, Bali, Indonesia

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Re: Pakistani Economic Stress Watch

Postby chanakyaa » 12 Oct 2018 07:18

arun wrote:...
Our representative on the IMF Executive Board should ensure that Christine Lagarde’s commitment on obtaining full details on Conning Pakistan to Enrich China aka CPEC is 800% adhered to. Also any possibility of the IMF loans being used to allow China to bail out of Pakistani commitments must be squelched. Juicy bits about Higher than Himalaya’s, Deeper than Indian Ocean, Sweeter than Honey, As close as lips to Teeth, Stronger then Steel Iron Brother ripping off the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan should be leaked thereafter:

Sadly, it does not too long for Bakis to produce fake CPEC agreements with China. And, how do you ensure that Paki clever accounting adjustments, does not pay Chinese loans with IMF money?

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Re: Pakistani Economic Stress Watch

Postby Vips » 12 Oct 2018 09:43

chanakyaa wrote:
arun wrote:...
Our representative on the IMF Executive Board should ensure that Christine Lagarde’s commitment on obtaining full details on Conning Pakistan to Enrich China aka CPEC is 800% adhered to. Also any possibility of the IMF loans being used to allow China to bail out of Pakistani commitments must be squelched. Juicy bits about Higher than Himalaya’s, Deeper than Indian Ocean, Sweeter than Honey, As close as lips to Teeth, Stronger then Steel Iron Brother ripping off the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan should be leaked thereafter:

Sadly, it does not too long for Bakis to produce fake CPEC agreements with China. And, how do you ensure that Paki clever accounting adjustments, does not pay Chinese loans with IMF money?


We can do zilch to ensure any compliance. US holding more then 16% voting share in IMF has an effective veto on any IMF loan to Pakistan as approval of at least 85% is required for approving the package. If Pakistan does not play ball with Uncle, you can be sure that either there will be no aid or there will be very strict audit of the aid spend by pakistan.

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Re: Pakistani Economic Stress Watch

Postby dhyana » 12 Oct 2018 10:09

Pakistan formally seeks financial assistance from IMF

Pakis­tan is seeking its largest loan package of up to $8 billion from the IMF to bail itself out from a severe crisis that threatens to cripple its economy, diplomatic sources earlier told Dawn.

The sources said that the IMF could place strict conditionalities, forcing Pakis­tan to seek additional loans for meeting those restrictions and this could expand the loan facility to $12bn.

Pakistan has received more than a dozen financial support packages from the IMF in the past. It completed the last three-year package of $6.4bn in August 2016, which was 216 per cent of Pakistan’s quota at the IMF.


It is said that the higher the percentage of quota of loan/aid taken, the more conditionalities (GUBO) are placed on the country.

Also, Approaching the IMF

Seems to be a decent article on the ball-squeezing tactics that may occur with this most recent IMF loan facility. I say Paki-land should go for broke- spare no expense! And in the process reveal all and sundry re: the CPEC machinations. Should be good enuff to inflame the common abdul. They need more domestic strife anyway.

dhyana
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Re: Pakistani Economic Stress Watch

Postby dhyana » 13 Oct 2018 09:59

Toyota Pakistan stops taking orders after rupee depreciation

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Must be the only country where payment in full, up front, is discouraged. But then, the total automobile market in Pakistan in about 200000 annually, with a lot of the local 'production' primarily coming from assembly of kits. I guess no more kits coming for now?

It's a shame, a damn shame. And this is the ascendant Naya Pakistan, in the midst of the game-changing CPEC? The same CPEC which will transform it into a manufacturing powerhouse?

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Pakistani Economic Stress Watch

Postby Peregrine » 13 Oct 2018 15:47

X Posted on the PESW Thread

IMF projects inflation rate to hit 14% by June - Shahbaz Rana

ISLAMABAD: The International Monetary Fund (IMF) has projected that the average inflation rate in Pakistan might hit 14% by June next year – a level that if reached could result in interest rates peaking to 15% and economy drastically slowing down, government sources say.

Such a high level inflation would also carry implications for Prime Minister Imran Khan’s most ambitious flagship programme of constructing five-million low-cost housing units. The banks lend money over and above the policy rate, which will reduce the government’s options to give subsidy on housing loans.

The sources said due to stabilisation measures, the IMF is also projecting economic growth rate of below 3% for fiscal year 2018-19. These assessments were shared with Pakistan during September 27 to October 4 staff level visit.

Although the IMF has not mentioned the inflation projections in its handout, it did internally share the assessment of average 14% inflation in fiscal year 2018-19 with the Finance Ministry, said sources who negotiated with the IMF.

The issue of inflation and the Gross Domestic Product (GDP) also came up for discussions during the closing meeting between Finance Minister Asad Umar and IMF team. The meeting was held in Q-Block on last Thursday. In its handout issued on the same day, the IMF underlined that “economic growth will likely slow significantly, and inflation will rise”.

IMF projects inflation rate to hit 14% by June

The average inflation in the first quarter of this fiscal year was 5.86%, according to the Pakistan Bureau of Statistics (PBS). The Sensitive Price Index-based inflation has already jumped to 6.5% this week over the same time of the last year, according to the PBS. The State Bank of Pakistan (SBP) has also raised its average inflation projection to 8% but it is still far lower than the IMF’s assessment.

The sources said the IMF’s assessment of average 14% inflation was based on at least four assumptions. These were increase in prices of gas (already notified up to 143%), increase in power tariffs, devaluation of rupee against the US dollar that will affect almost every consumable item and increase in prices of petroleum products due to devaluation and global crude oil prices.

“According to our model, the average inflation in the fiscal year 2018-19 will be between 13% and 15%,” said Dr Hafiz Pasha, former finance minister, while affirming the IMF’s assumptions for higher inflation.

IMF mission to arrive in coming weeks for bailout talks

Once the inflation hits the roof, it would be impossible for the SBP to keep the real interest rates negative. In such a scenario, the IMF would push Pakistan to hike the key interest rates to a level, which should be slightly higher than the inflation levels.

The IMF has already announced to send its team to Pakistan in the coming weeks after Finance Minister Asad Umar formally requested the IMF managing director for a bailout package.

The SBP has recently increased the interest rates to 8.5% – 2.75% increase since January this year. The sources said the IMF demanded 12.5% interest rate in the short term.

The IMF has long been advocating tight monetary and fiscal policies to cut the aggregate demand aimed at restoring macroeconomic stability in Pakistan. The country booked $18 billion current account deficit in the last fiscal year but its official foreign currency reserves are not sufficient to finance the deficit.

The SBP’s official foreign currency reserves decreased to $8.3 billion – hardly sufficient to give cover to 1.5 months imports. The month of November will be critical, as the authorities are expecting that the current account deficit will start narrowing down, imports will be drastically curtailed due to previous rounds of devaluation and the exports will pick up.

In case this does not happen, the SBP might be asked to take the interest rates to double digits and let the rupee further devalue. The sources said the due to the stabilisation measures the IMF has also projected economic growth rate of below 3% as against 5.8% in the last fiscal year.

A senior official of the Finance Ministry, who was also involved in negotiations with the IMF, said Pakistan did not agree to the IMF’s assessment of 14% inflation and below 3% economic growth rate.

But Dr Pasha said in addition to stabilisation measures, the output of major crops would be a determining factor in estimating economic growth rate. He said if the major crops output dipped, the economic growth rate will be in the range of 3.2% to 3.5%. “If the agriculture sector performs well, the economic growth rate could be around 4.2%,” said Dr Pasha.

The IMF’s latest World Economic Outlook report said the macroeconomic stability gains in Pakistan have been eroding, putting the outlook at risk. The economic growth rate is expected to moderate to 4% in 2019, and slow to about 3% by 2023.

This suggests that Pakistan’s economic conditions will remain precarious for years to come, contrary to the PM’s promise with the nation that he would overpower the situation in six months.

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Re: Pakistani Economic Stress Watch

Postby Vips » 14 Oct 2018 18:56

Check the track record of finance minister of pakistan when he was CEO of Pakistan's largest company. :rotfl:


I know Imran Khan has asked the media for a three-month honeymoon, but financial markets don’t grant any respite. So when the rupee went into free fall against the dollar, and the stock market lost 1,300 points in a single day, what did our prime minister say to reassure investors?

He reverted to the only script he knows, railing against corruption, promising to bring back money taken abroad illegally, and assuring us that overseas Pakistanis would plug the $10 billion gap in our foreign exchange account. But while this kind of populist rhetoric goes down well with Khan’s supporters, it did little to calm the markets, with many traders expressing bafflement over his bizarre messaging.

As our economy explores new lows, who’s in charge?

After the panic comes the pain. With the rupee plunging to new lows, we can safely expect a sharp price rise. As all imports will now cost more, the effects of devaluation will ripple through the economy, causing an inflationary spike that will most affect the poor. The price of petroleum and gas will shoot up, raising prices in every sector, with electricity charges spiralling out of control. Did I hear somebody say Khan and our chief justice have a cunning plan to build dams to overcome our energy shortfall?

And as our economy explores new lows, who’s in charge? The PTI has typically blamed the PML-N for the mess it has inherited. But it’s a bit late for playing the blame game: Imran Khan is now PM, and the buck stops with him. And he has made Asad Umar the finance minister, for better or for worse.

Never having met him, I thought he came across as a reasonable, fairly competent person with some relevant corporate experience behind him. How wrong I was. Somebody has sent me Engro’s annual accounts for the five years Asad Umar served there as CEO, and I’m afraid they make for dismal reading. What puzzles me is why one of Pakistan’s biggest conglomerates waited five years before parting ways with him.

For starters, Engro shares fell by 77 per cent during Umar’s tenure, largely because of the ill-conceived new fertiliser plant he had pushed. After he left, the annual report for 2012 said, “the very survival of the company was at stake”. In fact, Engro lost Rs3bn in its fertiliser operation in just a year. Its other subsidiaries didn’t fare much better.

When Pakistani farmers buy all the fertiliser produced in the country, it is difficult to see why Engro’s flagship plant did not thrive. The problem since its inception was that due to the depletion of many of our gas fields, the government was simply unable to supply the plant with the raw material it was based on. While the billion-dollar project was operational, it could not produce any fertiliser.

So how did a corporate titan — a title awarded by some pliant reporters — get it so badly wrong? According to my source, he and some top Engro executives did their best to persuade key officials and politicians in the last two governments to resolve the problem, but to no avail. They were told there was simply not enough gas.

A friend recently rang from Islamabad to say that he had just been to the Finance Ministry, and had never seen so much chaos and confusion. The embarrassment surrounding Imran Khan’s failed begging mission to Saudi Arabia should serve to remind him that while he might have a host of admirers in Pakistan, his charisma and cricketing reputation doesn’t cut much ice abroad.

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 14 Oct 2018 21:32

Peregrine wrote:X Posted on the PESW Thread

IMF projects inflation rate to hit 14% by June - Shahbaz Rana

The IMF’s latest World Economic Outlook report said the macroeconomic stability gains in Pakistan have been eroding, putting the outlook at risk. The economic growth rate is expected to [b]moderate to 4% in 2019, and slow to about 3% by 2023. This suggests that Pakistan’s economic conditions will remain precarious for years to come, contrary to the PM’s promise with the nation that he would overpower the situation in six months.


At least everyone will have modern housing, clean air and water, and bakistan will be greener and cleaner than oirope. Not!

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Re: Pakistani Economic Stress Watch

Postby Singbhai » 14 Oct 2018 23:35

What happens when Pakistan goes dark. Govt falls and Military disintegrates - Islamic State takes over due to rise of poverty and unemployment.

The new "Islamic State of Pakistan" will probably get all their loans written off as bad debts. China, Saudi, Qatar, IMF and all other lenders will see some impact on their own economy due to bad debts on books.

China will have to pull off an East India on Pakistan before the collapse else the impact will be pretty high on economy.

This reality is possibly less than 5 yrs away..

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Re: Pakistani Economic Stress Watch

Postby Trikaal » 15 Oct 2018 00:27

Singbhai wrote:What happens when Pakistan goes dark. Govt falls and Military disintegrates - Islamic State takes over due to rise of poverty and unemployment.

The new "Islamic State of Pakistan" will probably get all their loans written off as bad debts. China, Saudi, Qatar, IMF and all other lenders will see some impact on their own economy due to bad debts on books.

China will have to pull off an East India on Pakistan before the collapse else the impact will be pretty high on economy.

This reality is possibly less than 5 yrs away..

It's not going to fall. If situation really becomes dire, they will just hand over some members of the Haqqani network and become US darling. Or send their troops to fight in yemen and Saudis will bankroll them for a few years. Or just bend over for their chinese masters who will take care of everything. The fact is, Pakistan has too many fathers and they only need to swallow their pride and kneel before any one of them and all these problems will disappear.

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Pakistani Economic Stress Watch

Postby Peregrine » 15 Oct 2018 01:26

X Posted on the Terroristan Thread

Uncertainty wipes $41b off PSX capitalisation - Salman Siddiqui

KARACHI: From an uncertain political climate, Pakistan has transitioned to what can be called a relatively stable environment. However, this 180-degree shift has come at a hefty cost as the country and its stock market have suffered heavily.

The real economy has taken a massive hit from the political developments. Resultantly, the International Monetary Fund (IMF) has anticipated that Pakistan’s economic growth will be below 3% in the current fiscal year 2018-19 compared to a 13-year high growth of 5.8% in fiscal year 2017-18.

The Pakistan Stock Exchange (PSX), a barometer to gauge the country’s economic performance, has continued to reflect sad stories of economic stress since the political drama took centre stage, beginning with the Panama Papers leaks.

The bourse has suffered a massive reduction of $41 billion in market capitalisation to $58 billion on Friday (October 12, 2018) compared to $99 billion on May 24, 2017 when the benchmark KSE-100 index hit an all-time high at 52,876 points. WOW! PSE has LOST 41.4% of its Value!"

The historic level was achieved on expectation of Pakistan’s reclassification into the MSCI Emerging Markets index from the Frontier Markets index.

“Panama leaks-led political instability, which later on converted into economic instability…and rupee depreciation, has caused a wipe-off (of $41 billion) in market capitalisation,” Topline Securities Chief Executive Officer Muhammad Sohail told The Express Tribune.

In rupee terms, the market capitalisation dropped 26% to Rs7,705 billion by Friday compared to Rs10,446 billion on the day the PSX hit the historic high. The PSX benchmark KSE-100 index has suffered a loss of 29% to 37,515.93 points on Friday compared to the historic high of 52,876.46 points in May last year. 29% is in Index Points. In Monetary Terms it has lost 41.4%

The health of the economy continued to deteriorate as then premiers Nawaz Sharif and Shahid Khaqan Abbasi and several ministers including finance and commerce ministers failed to find time to look into the matter because they faced graft cases.

PSX expected to maintain uptrend as major sectors benefit

The political instability gave birth to tough economic challenges. Exports fell while imports surged. At the same time, oil prices recovered in world markets and put more burden on Pakistan’s economy, which relies heavily on imported oil.

Lack of focus on economic developments led to rapid depletion of the country’s foreign currency reserves, widening of current account and fiscal deficits, mounting foreign debt to historic high and balance of payments crisis.

The current government has formally approached the IMF to acquire a bailout programme to deal with economic challenges as foreign currency reserves have dropped to less than one and a half month of import cover at $8.3 billion. It is a case of Double Accounting. The True Amount of Forex held by SBP is US$ 2.5 Billion

To deal with these issues, the State Bank of Pakistan (SBP) has let the currency depreciate by a massive 25% to Rs131.93 against the US dollar since December 2017 and revised up the benchmark interest rate by 275 basis points to a 44-month high of 8.5% since January 2018. The IMF has suggested further depreciation and rate hike.

PSX outlook

“Going forward, the PSX would perform in line with cues that will come out of Pakistan-IMF talks for a new bailout…as to how stringent the terms and conditions for the bailout would be. Moreover, the duration of the downward spell in global stock markets would also indicate the direction of the local bourse,” Sohail said.

PSX lifts moratorium on purchase of its shares

Arif Habib Limited Head of Research Samiullah Tariq appeared quite optimistic and anticipated that “the PSX benchmark KSE-100 index will rebound to 42,000 points in six to eight months.”

He said the current government had identified root causes of the prevailing economic problems and was expected to take corrective measures soon.

“Prevailing oil prices at world markets and downturn at global stock markets may also cue PSX in short to medium run,” he added.

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Re: Pakistani Economic Stress Watch

Postby Vips » 16 Oct 2018 04:08




:rotfl: :rotfl:

-Saudi Arabia will give us $10 Billion
-Saudi Arabia will also park additional amount in our central bank to support our foreign exchange reserves.
-Islamic Bank will give us $4 Billion
-China will give us support.

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Re: Pakistani Economic Stress Watch

Postby sanjaykumar » 16 Oct 2018 10:34

Arm in arm, Niazi and Qureshi go abegging for alms and arms. What a tamasha.


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