Pakistani Economic Stress Watch

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Manish_P
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

Those are SDR.

Our voting rights are 2.63 percent.

We have been lobbying for increase in our voting rights. The review is in 2023

International Monetary Fund hikes SDR allocation to India
India holds 2.75 per cent of SDR quota, and 2.63 per cent of votes in the IMF. The country has been lobbying to increase the voting share in the IMF for quite some time. The decision on this is due in 2023.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Global banks stop trade credit for oil imports by Pakistani firms
KARACHI: Foreign banks have stopped offering trade credit for oil imports to Pakistani refineries, and some suppliers are seeking payment upfront to avoid potential problems resulting from political standoff in the country, industry sources said on Wednesday.
They said politically-tense Pakistan is likely to face fuel shortages in days to come as international banks have refused to confirm letter of credits (LCs) for oil import orders citing “high country risk” alert.

For the import of crude oil from the global market, LCs are opened by the local banks. However international banks confirm the LCs of local paretners to provide guarantee to the exporter. Under the guarantee if a Pakistani bank defaults on a payment to an exporter, its international counterpart pays the amount.
Sources pointed out that following the Sri Lanka default, an overall negative environment emerged in Pakistan, being perceived as the next country heading towards a default after a serious balance of payment crisis and a huge erosion of foreign exchange reserves.

“This situation has not only severely dented Pakistan’s credit rating, but it also has added to the country’s risk especially for confirming the LCs.”

Sources said that refineries and oil marketing companies (OMCs) are in serious trouble.

“Refineries are in direr straits as their cargoes are larger than OMCs.”

Sources said three refineries in particular were in deeper trouble as due to non-confirmation of their LCs, their planned crude oil cargoes would not arrive in Pakistan, resulting in reduced refining operations.

They said Pakistan was already struggling hard to ensure a smooth supply of petroleum products in view of their rising global prices and government’s policy to keep the prices low through subsidies on petrol and diesel.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Economy may not sustain 6% growth in FY23
ISLAMABAD: Pakistan’s economy faces strong headwinds and may not sustain 6% economic growth in the next fiscal year, as it is caught in a vicious cycle of inflation and currency depreciation, said the Ministry of Finance on Saturday.

The monthly Economic Outlook, which marks a departure from the previous edition, raised many red flags about the health of the economy, puncturing the narrative of “leaving behind a good economy” of the previous government of Pakistan Tehreek-e-Insaf (PTI).
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Humayun Akhtar. The author is a former commerce minister and the CEO and Chair of the Board of the Institute for Policy Reforms. This feature is based on the Institute’s recent report “What to do about Pakistan’s mountain of debt?’.
PAKISTAN'S ECONOMY: SLEEPWALKING FROM CRISIS TO CRISIS
ISLAMABAD: There is not much wisdom in doing the same thing over and over again and expecting a different result. Yet that is how successive governments in Pakistan have managed the economy. When faced by an economic crisis, our first reaction is to seek external loans under an IMF programme. This course of action also has a parallel requirement of economic reforms to avoid the crisis from happening again. Pakistan has never cared to do that.

Decision makers celebrate each agreement with youthful optimism, as if it is a win. Citizens, on the other hand watch with trepidation. They see the loan meter tick higher like a helpless passenger in the back seat of a lost taxi, knowing that in the end they must pick the tab. No decision maker is ever held to account.

So, we borrow with no plan about how to return the money. And the economy has sleep walked from one crisis to the next, hand-held by one IFI or another. We may now have come to a point from which there is no easy exit. There are also not too many countries and organizations willing to help. They know that this is a child that refuses to grow.
Meanwhile, discussions with IMF have floundered. It has forced GoP to take the step it had said it would not take, which is to partly cut fuel subsidy. Yet, removal of fuel subsidy is not the only hurdle in reviving the IMF arrangement. GoP and IMF disagree also on several revenue and expenditure targets for the coming budget, as well as on the primary balance. IMF expects GoP to do away with power tariff subsidy, i.e., increase electricity tariff or cut DISCO revenue leakage. No government is willing to do the latter. IMF also wants a realistic estimate of provincial surpluses, a useful tool employed for years by governments to show lower than expected budget deficit.
Why is an IMF agreement insufficient response? IMF’s mission is not growth and development. It helps with temporary balance of payment emergency. IMF looks at debt sustainability from a cash flow point of view. So, if Pakistan will receive enough loans to enable it to meet this and coming years’ external payment obligations, including interest and amortization, IMF considers the situation sustainable. This is a short-term perspective emanating from the IMF’s mission to help member countries meet emergency BoP challenges. But piling debt on debt worsens the malady. As our over 20 visits to IMF testifies, Pakistan’s case is more enduring in nature and entirely of its own making. It stabilizes the economy while under the programme but goes back to old ways very soon. At each visit, Pakistan is in worse shape than it was the last time.
In the last 30 years, both public and private investment has declined in Pakistan. But nothing has been done to correct it. Investment in manufacturing is shockingly low at 1.5 per cent of GDP. As a result, export as a percent of GDP has declined. That figure stood at 19 per cent of GDP in 1990. It is now 8.5 per cent. In some respects, the current account crisis is the other side of the coin of underinvestment.
The economy is under investing in key growth inducing infrastructure support. Expenditure as per cent of GDP on health and education has been flat despite alarmingly low indicators in both. While public investment declined, fiscal deficit has stayed at high levels throughout the 30 years. Our flawed political choice is evident from the trendlines added to the chart below. Budget deficit has stayed at about 6 per cent of GDP, while PSDP has fallen rapidly.
Let’s take a minute to dwell on the logic of public finance in Pakistan. We use 78 per cent of net federal revenue (equal to 38 per cent of total federal expenditure) for interest payment, and then government borrows more money to pay for its other expenditure, which further adds to subsequent interest payments. And as IMF now stipulates that the primary deficit must stay positive, so each year, government spends more and more funds to meet interest expenditure, while restricting most other expenses. Citizens and businesses suffer for want of public goods and from the ever-increasing demand for levies and taxes.
Consequently, debt and debt servicing are now out of hand. Let’s briefly look at the numbers. Total foreign debt was less than $ 60 billion in 2015. In six years, it has more than doubled to over $ 130 B in December 2021, and the borrowing continues. Returns on the labour of Pakistanis is being handed over to outsiders.

On the other hand, in FY 2015, exports of goods and services was $ 30.4 billion. It barely increased to $ 31.5 billion in FY 21. So, while foreign debt grew by over 200 per cent in six years, exports grew by a small 3 per cent. During the same period, debt servicing grew by about 250 per cent. So, how would more loans help? They only worsen the situation.
Continuous dependence on debt has forced us to borrow from expensive sources as concessional sources dry up. Thus, we see that between 2010 and 2021 share of low cost mostly long-term Paris Club debt have gone down from 25 per cent to 8.8 per cent. Share of multilateral debt, another source of concessional loans, fell from 42.7 per cent to 27.6 per cent. As against this, the share of high-cost bonds/sukuks went up from 2.7 per cent to 6.4 per cent. Cost of the three bonds floated in FY 21 ranged between 6 per cent and 8.9 per cent. Share of commercial loans are up from zero in 2010 to 8.4 per cent of total debt in 2021. Their cost is in the range of 5 per cent.

Since FY 2001, Pakistan has paid an average of US $ 1.4 B annually in interest alone. Average interest paid in the last four years is US$ 2.7B annually for a total of US $ 10.7 B since FY 18. Since FY 2001, Pakistan has paid external creditors more than it has received from them. In 20 years, it has received $ 112.6 B and it has paid back $ 118 B in interest and principal. Yet its external debt has grown by 228 per cent from $ 37.2 B in FY 01 to $ 122.2 B in FY 21. We may have paid back the original loan more than once and still owe it to the creditor. This is because often the purpose of new loans is to repay past loans with the result that over 70 per cent of new debt is to meet balance of payments needs. Returns on the labour of Pakistanis is being handed over to outsiders.
External debt must finance projects that create GDP growth and exports to enable the economy to repay. If over 70 per cent of new debt is consumed, the economy does not create the means to repay. About 4 per cent of our GDP has flown out annually in debt servicing in recent years.

As a result, the economy is caught in a trap of low investment, low productivity, low exports, and high debt and debt servicing. It is not clear if there is a plan to correct it. Whatever the reason, it shows the inability of successive governments to reform. While government should do everything to help the economy produce more and industrialize, it stays focused on the short-term.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Country needs $36b in foreign loans
KARACHI: Finance Minister Miftah Ismail has announced that Pakistan is expected to reach an agreement with the International Monetary Fund (IMF) in June, as the country is projected to need $36-37 billion in foreign financing in the next fiscal year.

He revealed that at present the government was not considering raising fresh foreign debt from the global capital market and commercial banks after the country’s international bonds lost almost one-third of their value, while their yields went up significantly.
Giving the breakdown of the external financing requirement, Ismail said “Pakistan is to repay $21 billion in foreign debt in the next fiscal year.”

Besides, the country will require another $10-15 billion to finance the current account deficit. The government is also targeting to boost the country’s foreign exchange reserves by $5 billion to $15 billion next year.

“So, it is a must to enter the IMF loan programme (worth $6 billion) to arrange the required financing,” Ismail said.
The value of Pakistan’s US dollar-denominated international bonds has shrunk by around 30% - like $1 bond was trading at 70 cents when the PML-N led coalition government came to power in early April. “Now it is trading at 65 cents,” he said.

“This means we cannot float Eurobonds in the world market to raise fresh funds, nor can we go to (global) commercial banks (right now),” the minister said.

At present, the viable option is to borrow from the multilateral and bilateral lenders.

“To take loans from the multilateral institutions, it is a must to be in the IMF programme. This unlocks financing from the World Bank, Asian Development Bank … and particularly the Chinese-led Asian Infrastructure Investment Bank … everyone is waiting for the revival of IMF programme,” he said.

Prime Minister Shehbaz Sharif also went to Saudi Arabia and other friendly countries to acquire financing from them. “They are ready to extend loans, but only after we enter the IMF programme.”
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Re: Pakistani Economic Stress Watch

Post by putnanja »

For all his "anal"ysis , he doesn't address the elephant in the room which consumes most of the resources in his country . :rotfl: As long as they act as an ostrich with their head in the sand, they will continue to lurch from one crisis to another. The amount spent on their military is simply unsustainable for an economy like theirs!
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Re: Pakistani Economic Stress Watch

Post by Anujan »

People old enough to remember: this was the exact set of circumstances that Pakistan was in 2000. Mushy was in power, west hated him. Dekhonomoney was in the dumps.

Then 9/11 happened. Pakistan got 50B$ of their loans forgiven or rescheduled. This was followed by steady coalition support payments, logistics support payments, other grants and loans.

Once they dried up, Pakistan went back to their 2000 status.

The money from massa and GOAT (global offensive against terror) had propped up Al-Bakistan for 20 years! And they didn't take that time to build a functional economy.
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Re: Pakistani Economic Stress Watch

Post by bharathp »

He revealed that at present the government was not considering raising fresh foreign debt from the global capital market and commercial banks after the country’s international bonds lost almost one-third of their value, while their yields went up significantly. ...
“This means we cannot float Eurobonds in the world market to raise fresh funds, nor can we go to (global) commercial banks (right now),” the minister said.

At present, the viable option is to borrow from the multilateral and bilateral lenders.
just look at the spin - they are not able to raise any funds in global markets at all due to their abysmal bond ratings, so they say "we are not considering raising debt from global market" - more like "global markets dont think we can pay them back - hence no one there will give us any money".

Prime Minister Shehbaz Sharif also went to Saudi Arabia and other friendly countries to acquire financing from them. “They are ready to extend loans, but only after we enter the IMF programme.”
another spin! "they are ready to extend loans only after IMF prgram" - that was a pre condition given to Imran last time - so why did the new PM go there? to beg to change the terms- and what did he get in return? no change in the terms - more like "even our PM going there and begging dint help us - we are now forced to go to IMF onlee
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Re: Pakistani Economic Stress Watch

Post by sumsumne »

Anujan wrote:People old enough to remember: this was the exact set of circumstances that Pakistan was in 2000. Mushy was in power, west hated him. Dekhonomoney was in the dumps.

Then 9/11 happened. Pakistan got 50B$ of their loans forgiven or rescheduled. This was followed by steady coalition support payments, logistics support payments, other grants and loans.

Once they dried up, Pakistan went back to their 2000 status.

The money from massa and GOAT (global offensive against terror) had propped up Al-Bakistan for 20 years! And they didn't take that time to build a functional economy.

GOAT also gave them all of the 777 planes that exist today in the PIA fleet - there is no way PIA can afford a fleet like it has today.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

To restore IMF deal, price of electricity likely to go up too by July
ISLAMABAD: A substantial hike in the base price of electricity of up to Rs7-7.50 per unit is expected to be implemented on July 1, 2022 to ensure the restoration of the IMF programme, according to senior official sources, The News reported Monday.

"The current average base tariff is Rs16.64 per unit, which is likely to increase by Rs7 to Rs7.50 per unit to Rs24.14 per unit".
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

The IMF (US) seems to be playing it very cool this time. They seem unlikely to give the Loan/Aid unless there is substantial removal of the subsidies and that to for a substantial time period.

The pakis need to quickly set up the new version of the AQ to try and get the west to cough up protection money.
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Re: Pakistani Economic Stress Watch

Post by Ambar »

I think everyone except the US knows the games Pakis play. The entire PML-N, PPP and Paki establishment with their entourage of relatives, distant relatives, friends, servants etc. chartered a Boeing 777 and went with their shiniest begging bowls to pay their respects to MBS and ask for money and oil, but looks like Saudis have been stalling. Last week Bajwa personally called MBS and only after that did the Saudis agree to rollover the $3 b loans and probably sell oil on more favorable terms. Someday hopefully this ponzi scheme will come crashing down on pakis.
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

Ambar wrote:I think everyone except the US knows the games Pakis play....
The US very well knows the games the Pakis (and others play). You don't become the world super pawah by being naive or idiotic.

The US thinks that the world is it's exclusive playground and all the kids should play the games it wants and by the rules it sets. It's when the kids form their own groups to play their own games, be it in their corners, that the US takes affront and comes down (with it's flunkies) to lay a beating like the playground bully it is.

In the case of the bakis, it's just that they were the flunkies of Khan but tried to cosy up to the new upcoming bully.
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Re: Pakistani Economic Stress Watch

Post by rsingh »

Bakis milked West for 20 years (courtesy 9/11). What if Bakistani provide Aitom bomb to Taliban? Milking starts again.
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Re: Pakistani Economic Stress Watch

Post by kit »

sumsumne wrote:
Anujan wrote:People old enough to remember: this was the exact set of circumstances that Pakistan was in 2000. Mushy was in power, west hated him. Dekhonomoney was in the dumps


GOAT also gave them all of the 777 planes that exist today in the PIA fleet - there is no way PIA can afford a fleet like it has today.
indeed , so who is flying them ?
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

rsingh wrote:Bakis milked West for 20 years (courtesy 9/11). What if Bakistani provide Aitom bomb to Taliban? Milking starts again.
The uniformed jihadis know that if they provide the bum to the talibs the first dhamaka will happen in bakistan itself..
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

Oil imports facing foreign exchange constraints :((

https://www.dawn.com/news/1692384/oil-i ... onstraints
Informed sources told Dawn that the Petroleum Division had informed the prime minister and finance minister that arrangements of oil imports were getting tough by the day as foreign banks were not providing financing against letters of credit (LCs) opened by oil marketing companies (OMCs) and refineries with the local banks.

The sources said about six-seven cargos worth $50-75 million each ($350-500m cumulative) depending on size and product were held up at present because of the increased risk following some critical statements from the relevant ministries about the tough fiscal and foreign exchange position. They said Pakistani banks were opening LCs on behalf of the oil industry, but their partner banks were not extending credit cover.
Who in their right minds will trust Baki banks :lol:
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

IMF outlines guidelines to revive loan programme
ISLAMABAD: The International Monetary Fund (IMF) has said that “Pakistan needs to take wide-ranging steps to repair macroeconomic stability”, indicating that the revival of the programme would not be a cakewalk despite the government's decision to increase fuel prices by 25%.

The statement by Esther Pervez, the Resident Representative of the IMF, comes amid a delay in the withdrawal of the Rs5 per unit power subsidy and further removal of fuel subsidies.
Sources told The Express Tribune that during the inconclusive Doha talks, the government had proposed the budget deficit target for the next fiscal year at Rs3.77 trillion, or 4.8% of gross domestic product (GDP).

The primary deficit target, excluding interest payments, had been proposed at 0.5% of GDP, or less than Rs400 billion, for the next fiscal year, they added.

However, the IMF did not accept both the numbers, terming the 4.8% budget deficit projection at the lower end in the absence of concrete measures. It demanded that Pakistan should meet its commitment and generate a primary budget surplus instead of proposing the primary deficit target, they added.

The agreement on fiscal framework was critical to revive the IMF programme.
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Re: Pakistani Economic Stress Watch

Post by VishnuS »

Economic experts!! I have a question that's bugging me since last week.

Since 25th May PKR is gaining on $$$, as of today it had gained nearly 2%. On 25th, PKR was trading at 204 and now it is down to 199.60

What I am unable to understand is how PKR is gaining when it hasn't received any loans, inflation is over 13% and huge CAD... The only logical thing that comes to my mind is SBP spending forex to increase PKR value.

If anyone is tracking Pak Forex figures, can you let us know how much they have burned and how many months they can keep up??
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Re: Pakistani Economic Stress Watch

Post by Vinu »

Found a good article about what are options available to Paxis economically at this point.

https://www.news18.com/amp/news/opinion ... 87813.html

I was wondering which lohori formula Paxis used to calculate $36 billion they would like to beg / borrow, then realised that it is simple math of 6 months of import bill which would be useful for next election. They cannot think beyond that . Tactical brilliance!

Good summary:
Clearly, Pakistan is facing almost an existential crisis and there are no easy answers out of the predicament it finds itself in. Reform will mean contraction of the economy, greater economic distress, inflation, unemployment, unrest; default will mean all of the above and worse. Tinkering around will mean a worse crisis in another year or two. Pakistan is going to enter into an extremely turbulent phase.
But the most scary part of the article is this :
This is an opportunity for India, provided she knows what she wants and doesn’t hasten into seeking some kind of a deal to save Pakistan from itself.
I completely agree that it is a great opportunity for India but to do nothing . Yes Nothing .
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Re: Pakistani Economic Stress Watch

Post by disha »

VishnuS wrote:Economic experts!! I have a question that's bugging me since last week.

Since 25th May PKR is gaining on $$$, as of today it had gained nearly 2%. On 25th, PKR was trading at 204 and now it is down to 199.60 ....
That is a 2.5% price movement. The best is to look at the graph FriDin-to-FriDin. Not Din to Din. As they say, Jhumme to Jhumma.

The 2.5% price movement that got you so worried is because ImDin called off his nationwide strike and hence in disappointment PKR pulled back. Further TTP announced a ceasefire. Do not worry, the PKR will roar back to higher rates for USD as they run out of everything.

BTW, IMD predicts that the mean rainfall will be 103% on the Indian subcontinent. Does that mean floods in Pakistan?
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Re: Pakistani Economic Stress Watch

Post by VishnuS »

disha wrote:Do not worry, the PKR will roar back to higher rates for USD as they run out of everything.
Thanks Disha ji.

I am just praying that at least mini civil war erupts in the next couple of months and they suffer decent amount of damage and destruction.

I have a bad feeling that they will be out of Grey List in the next FATF review.

Pak getting out of Grey List has nothing to do with its compliance, but it will be done against us.

Anyways, I will be praying for that mini civil war or at least default on loans...
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Rs7.90 per unit: Nepra to announce hike in power base tariff today
ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) is all set to announce today (Thursday) the increase in electricity base tariff by Rs7.90 per unit for the next budgetary year 2022-23. It will be effective from July 1, 2022 after the nod of the federal government. This increase in base tariff will help the incumbent government help restore the $6 billion IMF program.
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Re: Pakistani Economic Stress Watch

Post by Aditya_V »

VishnuS wrote:
disha wrote:Do not worry, the PKR will roar back to higher rates for USD as they run out of everything.
Thanks Disha ji.

I am just praying that at least mini civil war erupts in the next couple of months and they suffer decent amount of damage and destruction.

I have a bad feeling that they will be out of Grey List in the next FATF review.

Pak getting out of Grey List has nothing to do with its compliance, but it will be done against us.

Anyways, I will be praying for that mini civil war or at least default on loans...
And I am praying this prediction of IM the Dim comes true fast, Default, Open Nooknudes and then split.

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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Moody's lowers Pakistan's outlook from stable to negative citing 'heightened external vulnerability'
Moody's Investor Service on Thursday downgraded Pakistan's outlook from stable to negative, citing "heightened external vulnerability" and uncertainty around securing external financing to meet the country's needs.

"The decision to change the outlook to negative is driven by Pakistan's heightened external vulnerability risk and uncertainty around the sovereign's ability to secure additional external financing to meet its needs. Moody's assesses that Pakistan's external vulnerability risk has been amplified by rising inflation, which puts downward pressure on the current account, the currency and — already thin — foreign exchange reserves, especially in the context of heightened political and social risk," the statement said.
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Re: Pakistani Economic Stress Watch

Post by rsingh »

So until now it was stable? What a joke are these rating agencies.
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

rsingh wrote:So until now it was stable? What a joke are these rating agencies.
I would recommend you to watch the movie 'The Big Short'
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Re: Pakistani Economic Stress Watch

Post by partha »

Dilbu wrote:Moody's lowers Pakistan's outlook from stable to negative citing 'heightened external vulnerability'
Moody's Investor Service on Thursday downgraded Pakistan's outlook from stable to negative, citing "heightened external vulnerability" and uncertainty around securing external financing to meet the country's needs.

"The decision to change the outlook to negative is driven by Pakistan's heightened external vulnerability risk and uncertainty around the sovereign's ability to secure additional external financing to meet its needs. Moody's assesses that Pakistan's external vulnerability risk has been amplified by rising inflation, which puts downward pressure on the current account, the currency and — already thin — foreign exchange reserves, especially in the context of heightened political and social risk," the statement said.
https://www.dawn.com/news/1692749/dont- ... king-apart
'Modi's language'
Earlier, PPP co-chairperson Asif Ali Zardari also condemned Imran's remarks in a late-night statement shared on his party's Twitter.

"No one can talk about fragmenting Pakistan. This is not that language of a Pakistani but that of [Indian PM] Modi," he said.
I was worried if Moody's rating downgrade will lead to debates and economic reform but then I saw this report. As long as they are focused on the wrong Moody we don't have to worry. The elites with dual citizenship and offshore dollar accounts don't probably care anyway.
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Re: Pakistani Economic Stress Watch

Post by kit »

Vinu wrote:
This is an opportunity for India, provided she knows what she wants and doesn’t hasten into seeking some kind of a deal to save Pakistan from itself.

I completely agree that it is a great opportunity for India but to do nothing . Yes Nothing .
Indeed. No trade with Pakistan . Absolutely NOT. They can trade with their abduls in Afghanistan and taller than mountains friend.
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Re: Pakistani Economic Stress Watch

Post by Bart S »

Dilbu wrote:Moody's lowers Pakistan's outlook from stable to negative citing 'heightened external vulnerability'
Moody's Investor Service on Thursday downgraded Pakistan's outlook from stable to negative, citing "heightened external vulnerability" and uncertainty around securing external financing to meet the country's needs.
They have not changed their rating, merely the outlook. Shows how biased and shameless these rating agencies are.
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Re: Pakistani Economic Stress Watch

Post by chanakyaa »

Correct. Not that rating agencies have any trust left, but to be fair, Baki rating of B3 is technically called “junk” (and within junk category, even more junkier rating) and Moody’s is saying that there is no further hope, which was communicated by lowering the outlook and lowering rating ceiling. It will soon go to Caa1 and then, hopefully, to a 72-hoors state called “default”.

B3 rating is literally like “bhook/nanga” state. You call it stable or negative, at that stage makes no difference. At that rating, the investment mandates (public or private) in most of the countries do not allow anyone to lend USD or Euros to Bakis for more longer duration. And, definitely not without exorbitant interest rate. This will accelerate the deadly debt spiral led by foreign currency crunch.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

This kind of heavy turmoil in the daily life of mangoes cannot be washed away anymore as domestic issues due to PTI vs Sharifs vs establishment. The only escape route for TSP now is starting a border mischief with India. So that they can explain away all the hardships faced by the awam as part of having to eat grass to defeat the kuffar.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Commoners fume at fuel price hike
LAHORE: People from various walks of life, especially the salaried class, have expressed anger over another massive increase of Rs30 in the per litre petrol and diesel rates by the government and said the decision might lead to limiting their mobility and routine business.

They also urged the government to immediately withdraw the decision.
Last week, the transport operators raised fares by 20 per cent on all inter-city and intra-city routes across the province. The Pakistan Railways (PR) too is likely to increase fares on all passenger and freight trains by 20 to 30pc.

Last week, the Punjab Mass Transit Authority also reached a consensus to introduce a distance-based fare instead of a flat one (subsidised fare of Rs40) for those travelling in the Lahore Orange Line train keeping in view the increasing electricity cost during the last and present government’s tenures.

Following a 20pc increase in the prices of the petroleum products, last week the retailers also raised the prices of fruits, vegetables and other commodities in the open market. Similarly, another increase of Rs30 per litre on Friday would also lead to hike in the prices of daily commodities.
Aditya_V
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Re: Pakistani Economic Stress Watch

Post by Aditya_V »

IN PKR Petrol price was less than PKR 100 in May 19- in 3 yrs Petrol price has more than doubled, it must hurt.
Dilbu
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

‘GOVT DECIDES TO IMPOSE ECONOMIC EMERGENCY IN COUNTRY’, SOURCES
ISLAMABAD: The federal government has decided to impose an economic emergency in the country and slashed the fuel quota and other benefits of cabinet members, parliamentarians and bureaucrats, ARY News reported citing sources.

According to sources, the PML-N-led government has also decided to slashed petrol and other benefits of parliamentarians, bureaucrats and cabinet members.

It is pertinent to mention here that the governments of Sindh and Khyber-Pakhtunkhwa have decided to reduce their petroleum expenditure by 40 and 35 per cent, respectively.
Dilbu
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Growth unlikely to exceed 3pc mark in FY23: economist :((
ISLAMABAD: Pakistan’s GDP growth is unlikely to cross 3 percent in the next fiscal year (2022-23) due to contractionary monetary and fiscal policies under the International Monetary Fund (IMF) programme.

While talking to Business Recorder, former Finance Minister Dr Hafeez Pasha said the government would be asked by the IMF to reduce the PSDP size for next fiscal year and increase discount rate, which would have a direct impact on the growth prospects for next fiscal year. He further stated that increase in Public Sector Development Programme (PSDP) spending is one of the two prerequisites for GDP growth as a study revealed that one percent increase in PSDP as a percentage of GDP contributes 1.7 percent to the growth.
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Re: Pakistani Economic Stress Watch

Post by nachiket »

Aditya_V wrote:IN PKR Petrol price was less than PKR 100 in May 19- in 3 yrs Petrol price has more than doubled, it must hurt.
Prices have shot up like crazy elsewhere too including the US despite the US having access to domestic oil. Pakis were getting massively underpriced fuel all this time and now are crying because they are slowly being asked to live within their means which they haven't done in years. It is insane for a country like Pakistan which is an economic basketcase and has little domestic oil availability to be subsidizing Petrol and Diesel for the masses at these rates. Only reason it worked so long was because of an uninterrupted supply of external credit. This price increase should have ideally been forced on them years ago on threat of bankruptcy. It is amazing how much money gets poured into a country when the US needs to use them for something.
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Re: Pakistani Economic Stress Watch

Post by CalvinH »

I was hoping that PMLN government wont take these tough measures but looks like they did and this has been a party pooper for the PKR rise. Its back to 198. With biting of this bullet IMF bailout seems to be certain.

The increase in fuel and electricity prices will slow Paki economy drastically. Lets see how much the IMF bailout will help them in medium term. Even 2.5 friends wont be able to save them this time if it doesnt work.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Money from KSA and China are ready if IMF bailout goes through. So they will survive this crisis until the next one. With each such cycle the next crisis should approach faster. Only GOAT money and a percentage of money spent on Afghanistan kept them floating for a while in between. After the exit of US money was supposed to flow from the Chinese through CPEC but they have not been as generous/foolish like amirkhans. Now pakis are back to the original cyclical downward spiral.
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Re: Pakistani Economic Stress Watch

Post by hnair »

Paki Abdul will bite more than the bullet, if it is in the interest of their elites and khakis to make them do the biting. The Pindi-Slumbad guys are ace grifters since Cold War times and know how to play the brothel madam with their country.

This oil price hike will mainly affect their affluent sections who will sullenly agree to this dip in luxury while their Abduls will mount the donkey and ride home that happy meal. Their elites bet on silent masses to remain silent, but this time, post-covid recovery is a new variable and their bet can go wrong like in Lanka. Nothing like a burning corner plot mansion or “farmhouse” to brighten the landscape and show Abdul waking up to their dystopian existence.

The only ways in which they can get over from the 15 year crisis cycle are:

1) downsize military and make peace with India (in that order)
2) sell off their soverginity to a reluctant bidder
3) utilize a global situation to sell off their sovirginity to a needy bidder

Their entire national policy is based on 3) since it’s inception but now they have to go to 2) due to lack of any situation that needs usage of paki resources. No world power, not even idiotic China needs them for now. 1) is the most logical way but pakis!

Imran tried 2) with Chinese and then the Russians but khan excersized their dwindling veto power to stem the rise of a khaki faction that likes Pandabears. The same ghazi faction that evolved from the talibunny loving Gul and the beard loving Mammad Aziz Khan.
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