Pakistani Economic Stress Watch

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chetak
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Re: Pakistani Economic Stress Watch

Post by chetak »

yensoy wrote:More "let them eat cake" behaviour from the Pak authorities:
So, if you are rich/powerful enough to have an international credit card issued in Paxtan, you can spend $$ abroad at the official rate of Rs 285 per, but if you are not from the privileged class you need to purchase dollars from the "kerb" at Rs 315 per. Great going State Bank of Paxtan!!! The elite kids going to uni will enjoy the benefits of papa's cards, ordinary folks can be damned.
even their credit cards are casteist, ....... ashraf and ajlaf
Mollick.R
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Re: Pakistani Economic Stress Watch

Post by Mollick.R »

Private sector credit shrinks by 98pc

Shahid Iqbal Published May 31, 2023

KARACHI: Bank lending to the private sector has shrunk to just Rs28 billion this fiscal year after plummeting 98 per cent compared to last year, central bank data showed on Tuesday. :lol: :lol:

The State Bank reported that from July 1 to May 19, the private sector borrowed a record low Rs27.9bn from banks compared to Rs1.414 trillion a year ago.

The economy has been facing a constant problem of a record-high interest rate of 21pc and headline inflation at 36.4pc. Average inflation is estimated to reach 30pc this fiscal year, which ends in June.

“There is no chance to run a business with such a high interest rate and an unprecedented 36pc inflation,” Aamir Aziz, who manufactures and exports finished textile products, told Dawn. He said textile exports had already started falling and feared that things would worsen in the coming months since millers had exhausted their cotton stocks.

“The country has produced five million cotton bales while the need is about 15 million bales. The country has no foreign exchange for imports and this is the reason that the private sector is out from the banks,” he said.

Bankers said interest rates were much higher than the policy interest rate of 21pc, depending on risks attached to borrowers. They said businesses couldn’t sustain in this scenario.

The financial sector believes that the State Bank may go for another increase to counter unrelenting inflation, while the International Monetary Fund is also critical of the existing interest rate.

A high interest rate has already started to take its toll, as most analysts and economists have estimated a negative growth rate in the current fiscal year.

However, the Pakistan Bureau of Statistics has reported the agriculture growth rate at 1.55pc even though the government had claimed $30bn in losses due to last year’s floods. The growth does not match such high losses.

Some analysts believe that the bureau’s data could result in a 0.29pc GDP growth, though many are still sure there will be no growth this time.

“We are facing a serious question of survival under the intensifying political and economic uncertainties, particularly when the IMF is silent over the release of its ninth review tranche,” a senior analyst said.

Pakistan needed significant financial help to come out of the current economic mess, he said but feared that China would not come to the rescue this time around. // finally this Realization is coming

Published in Dawn, May 31st, 2023
Mollick.R
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Re: Pakistani Economic Stress Watch

Post by Mollick.R »

Article is dated (February 2023) but still posting for records....

Blackouts and soaring prices: Pakistan’s economy is on the brink
By Sophia Saifi and Julia Horowitz, CNN
Updated 10:00 AM EST, Thu February 2, 2023

Muhammad Radaqat, a 27-year-old greengrocer, is worried. He doesn’t know how much an onion will cost next week, let alone how he’ll be able to afford the fuel he needs to heat his home and keep his family warm.

“All we’re being told by the government is that things are going to get worse,” Radaqat told CNN.

His anxiety reflects the mood of a nation racing to ward off an economic meltdown. Faced with a shortage of US dollars, Pakistan only has enough foreign currency in its reserves to pay for three weeks of imports.

Thousands of shipping containers are piling up at ports, and the cost of essentials like food and energy is skyrocketing. Long lines are forming at gas stations as prices swing wildly in the country of 220 million.

A nationwide power outage last month made people even more alarmed. It brought Pakistan to a standstill, plunging residents into darkness, shutting down transit networks and forcing hospitals to rely on backup generators. Officials have not identified the cause of the blackout.

Muhammad Radaqat, a 27-year-old greengrocer in Islamabad, is worried about whether he can continue to take care of his family.
Muhammad Radaqat, a 27-year-old greengrocer in Islamabad, is worried about whether he can continue to take care of his family.
Javed Iqbal/CNN
Pressure is growing on Prime Minister Shehbaz Sharif’s government to unlock billions of dollars in emergency financing from the International Monetary Fund, which sent a delegation to the country this week for talks.

Pakistan’s currency, the rupee, recently dropped to new lows against the US dollar after authorities eased currency controls to meet one of the IMF’s lending conditions. The government had been resisting the changes the IMF requested, such as easing fuel subsidies, since they would cause fresh price spikes in the short term.

“We need the IMF agreement to go through as soon as possible for us to save the ship,” said Maha Rehman, an economist and the former head of analytics at the Centre for Economic Research in Pakistan.

The making of a crisis
Pakistan is experiencing what economists call a balance-of-payments crisis. The country has been spending more on trade than it has brought in, running down its stock of foreign currency and weighing on the rupee’s value. These dynamics make interest payments on debt from foreign lenders even more expensive and push the cost of importing goods higher still, requiring even bigger drawdowns in reserves that compound the distress.

The country is also grappling with rampant price increases. The country’s central bank has hiked its key interest rate to 17% in a bid to clamp down on annual consumer inflation of almost 28%.

Some issues the country faces are specific to Pakistan. Political instability and efforts to prop up its currency, for example, have weighed on investment and exports, according to Tahir Abbas, head of investment research at Arif Habib, the country’s largest securities brokerage.

Historic floods last summer have also led to huge bills for reconstruction and aid, adding to strains on the government budget. The World Bank has estimated that at least $16 billion is needed to cope with damage and losses.

Pakistan's usually bustling ports, like this one in Karachi, have ground to a halt as the country grapples with a severe shortage of foreign currency.
Pakistan's usually bustling ports, like this one in Karachi, have ground to a halt as the country grapples with a severe shortage of foreign currency.
Rizwan Tabassum/AFP/Getty Images
Yet global factors are making the situation worse. The economic slowdown has weighed on demand for Pakistan’s exports, while a sharp rally in the value of the US dollar last year piled pressure on countries that import significant volumes of food and fuel. Prices for these commodities had already spiked due to the pandemic and Russia’s war in Ukraine, requiring larger outlays.

The IMF has warned repeatedly that this could stress vulnerable economies. While it forecasts that emerging market and developing economies will see a modest uptick in growth this year as the dollar comes off its highs, global inflation falls and China’s reopening spurs demand, the ability to manage debt loads remains a concern.

It estimated this week that 15% of low-income countries are already in debt distress, while another 45% are at high risk of struggling to meet their obligations. An additional 25% of emerging market economies are also at high risk. Tunisia, Egypt and Ghana have all sought IMF bailouts worth billions of dollars in recent months.

“The combination of high debt levels from the pandemic, lower growth and higher borrowing costs exacerbates the vulnerability of these economies, especially those with significant near-term dollar financing needs,” the IMF wrote in its world economic outlook this week.

No easy fix as suffering grows
For Pakistan to avoid default, talks with the IMF to restart its stalled assistance program must succeed, according to investors and economists. The IMF’s delegation arrived on Tuesday and is set to stay through Feb. 9.

“Availability of the IMF loan is critical,” said Ammar Habib Khan, a senior non-resident fellow at the Atlantic Council.

But Farooq Tirmizi, the CEO of Elphinstone, a startup geared at Pakistani investors, said that even if the IMF program resumes, it won’t fix all the problems, since the main issues plaguing Pakistan are “not economic, but political, with a government in place that is not willing to make structural changes.”

Pakistan’s economic crisis was at the center of a political showdown between Sharif and his predecessor, Imran Khan, last year. Khan was ousted by a no-confidence vote in April after Sharif accused him of economic mismanagement.

Vendors sell fruit under lights lit by batteries in Lahore, Pakistan, on Jan. 23. Millions of people across Pakistan were plunged into a blackout prompted by a power grid failure.
Vendors sell fruit under lights lit by batteries in Lahore, Pakistan, on Jan. 23. Millions of people across Pakistan were plunged into a blackout prompted by a power grid failure.
Betsy Joles/Bloomberg/Getty Images
The situation has remained turbulent since then. Pakistan has gone through three finance ministers in less than a year. The last two were part of the current government, raising questions about whether Sharif can hold onto power. The country is expected to hold a general election this summer.

The tumult comes as Pakistan faces a fresh wave of attacks by militants. Earlier this week, a suicide bomb ripped through a mosque in the city of Peshawar, killing at least 100 people. It was one of the deadliest attacks in the country in years.

People are suffering in the meantime. Farmers who lost cotton, date, sugar and rice crops to flooding still need help. The World Bank predicted in October that as many as nine million Pakistanis could be pushed into poverty without “decisive relief and recovery efforts to help the poor.”

High inflation is only boosting pain for households struggling to make ends meet. Food prices in January rose 43% year over year, according to data released this week.

Attention focused recently on a man in the southern province of Sindh who lost his life in a scramble to obtain a bag of subsidized flour handed out by local authorities. He was crushed to death by the crowd alongside him.

CNN BUSINESS LINK//
https://edition.cnn.com/2023/02/02/econ ... index.html
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Tax shortfall hits Rs433b
ISLAMABAD: The shortfall in tax collection has reached a record-breaking Rs433 billion during the first 11 months of the current fiscal year. This puts the Federal Board of Revenue (FBR) in an incredibly challenging position as it needs to collect Rs1.43 trillion in June alone to meet the annual target.

Provisional results indicate that the FBR has fallen significantly short of the 11-month revenue collection target of Rs6.64 trillion, managing to accumulate only Rs6.2 trillion, growing at a rate of 15.5% according to officials.

Consequently, despite the introduction of a second budget during the fiscal year and a record-breaking 36.4% inflation rate, the government is set to miss the annual tax collection target of Rs7.640 trillion by a considerable margin.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

PIA suffers Rs38b loss in first three months of 2023
KARACHI: The Pakistan International Airlines (PIA) suffered a loss of Rs38 billion in the first three months of this year -- 171% more than the last one.

The national carrier’s financial results for the first three months of the year 2023 have been disclosed.

The PIA’s financial report has revealed that the national carrier’s loss was 171% times higher in the first three months of this year against the same period in 2022.

The magnitude of this loss is around Rs38 billion.

During the first three months of the ongoing year, the national carrier only managed to earn Rs61 billion.

The PIA suffered a loss of Rs21 billion because of the appreciation of the dollar against the rupee.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Govt scrambles as IMF rejects Pakistan’s loan request
ISLAMABAD: A cabinet member revealed on Thursday that the International Monetary Fund (IMF) has rejected Pakistan’s request to lower the requirement of arranging $6 billion in new loans, leaving the government with no alternative but to try and revive the deal.

In a policy statement during the National Assembly Standing Committee on Finance, Minister of State for Finance Dr Aisha Pasha emphasised that returning to the IMF was Pakistan’s only option.
According to Dr Pasha, Pakistan requested the IMF to consider reducing the $6 billion external financing requirement based on new current account deficit data, but the Fund did not agree. She explained that there was an understanding to arrange $3 billion before the staff-level agreement and the remaining $3 billion after the agreement, but the IMF was insisting on “demonstrating the $6 billion.”

Despite a call by Prime Minister Shehbaz Sharif to IMF Managing Director Kristalina Georgieva, the IMF has not changed its stance, as indicated by the minister of finance’s statement.


When asked about a Plan B in case talks with the IMF fail to yield positive results, Dr Aisha Pasha responded that, “There is no option other than going back to the IMF, and I categorically say there is no Plan B.” She reiterated that the government’s aim was to pursue the IMF program.

However, Dr Pasha’s statement contradicts Finance Minister Dar’s previous position that Pakistan should try to manage with or without the IMF.
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Re: Pakistani Economic Stress Watch

Post by partha »

Dilbu wrote:Govt scrambles as IMF rejects Pakistan’s loan request
When asked about a Plan B in case talks with the IMF fail to yield positive results, Dr Aisha Pasha responded that, “There is no option other than going back to the IMF, and I categorically say there is no Plan B.” She reiterated that the government’s aim was to pursue the IMF program.
This downhill skiing was faster than downhill skiing in Kargil by Pakistan army.

This was her just two days ago:

https://www.pakistantoday.com.pk/2023/0 ... aus-pasha/
‘Plan B’ always there if deal with IMF not reached: Aisha Ghaus Pasha
yensoy
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Re: Pakistani Economic Stress Watch

Post by yensoy »

It's funny when the "Plan B" card says "Try Plan A once again".
Manish_P
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

partha wrote:...
This downhill skiing was faster than downhill skiing in Kargil by Pakistan army.
..
:lol:

I think the pakis are way past skiing now, partha ji.

They are now demonstrating diving.

This one is a double somersault, backward flip
sanman
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Re: Pakistani Economic Stress Watch

Post by sanman »

Einstein said the definition of insanity is trying the same thing over and over, somehow expecting different results.

So what's their next move?
g.sarkar
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Re: Pakistani Economic Stress Watch

Post by g.sarkar »

sanman wrote:Einstein said the definition of insanity is trying the same thing over and over, somehow expecting different results.
So what's their next move?
The next move is:
Pakistan se Zinda bhag. Before only the military practiced this, now everyone wants to leave. We should make sure that none of them are able to land in India. Let them go to Western countries claim asylum and settle there.
Gautam
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Re: Pakistani Economic Stress Watch

Post by Neela »

Dilbu wrote:PIA suffers Rs38b loss in first three months of 2023
KARACHI: The Pakistan International Airlines (PIA) suffered a loss of Rs38 billion in the first three months of this year -- 171% more than the last one.
Sirji . .. PIA is rotting corpse.
https://theprint.in/world/mounting-loss ... t/1517831/
akistan International Airlines (PIA), which is known for its mismanagement and poor services, is sinking into the sea of losses and the tax debts have amounted to over USD 1.4 billion
And Pakis have USD $4.1 billion in the kitty
PIA has tax debts amounting to over Rs 400 billion (USD 1.4 billion).
The carrier had also recently asked for a government bailout to the tune of Rs 45 billion (USD 157 million)
.:rotfl: - this is like a begging from a beggar.
Reportedly, the Saudi airport authorities, including King Abdul Aziz International Airport, Jeddah and King Khalid International Airport, had sent final notices to the airlines for clearing their dues. Till now the generosity of Saudi authorities had ensured a trouble-free run for the ailing airlines despite pilling up dues to the tune of nearly USD 40 million. However, weary of PIA management’s antics of avoiding the settlement of liability, they have demanded clearances of outstanding dues.
Absolutely shameless and disgusting
Earlier, the frequent delays had even resulted in the shifting of PIA flights from Jeddah’s North Terminal to Hajj as a penalty. Shifting of its Jeddah operation towards Hajj Terminal was a major blow to PIA’s reputation, and market share and was inconvenient for passengers, particularly Umrah pilgrims, reported AsianLite International.
Whats H&D in front of ummah brothers. All big happy family only.Now, If Pakis dont pay up, Saudis will shift PIA operations even further away...maybe Karachi .
In 2020, the European Union Aviation Safety Agency (EASA) suspended PIA’s authorization to operate in European airspace due to concerns over the safety of the airline’s operations


PIA airspace reach is rapidly shrinking . Assets like aircraft, which would have some value are likely to be seized for nonpayment of dues. But PIA operate very old aircraft . Who'd want that. And PIA are gonna say "you want my only asset:kya? Here take it...now pay for the leasing dues too. Your problem. Im back to camels...its environmentally friendly"

What a bunch of absolute crass undignified animals these Pakis are .
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

Neela wrote: Sirji . .. PIA is rotting corpse.
Neela ji, pakis don't mind necrophilia remember
.. Assets like aircraft, which would have some value are likely to be seized for nonpayment of dues. But PIA operate very old aircraft . Who'd want that....
Pakis can put it on the market for soosai jihadis for another 9/11... or threaten to do so to extort protection money from the targets..

Really the sky is the limit for the jasba-fool Pakis
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Re: Pakistani Economic Stress Watch

Post by Tanaji »

OBOR is the gift that keeps giving. Not only does it trap the sucker into high interest rate based one sided contracts with sovereign guarantees that only favour China, it also means that if you end up in trouble, IMF the lender of last resort does not want to bail you out as it fears it will use their loans to pay China.
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Re: Pakistani Economic Stress Watch

Post by mody »

https://www.businesstoday.in/latest/pol ... 2023-05-30

PIA aircraft seized in Malaysia. Ishaq Dar still full of bravado.
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Re: Pakistani Economic Stress Watch

Post by A_Gupta »

Pakistan allegedly has about 65 tons of gold reserves; that is worth around USD $3.7 billion. Maybe they can liquidate that. Assuming someone hasn't already looted the national treasury.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Ogra drops gas bomb on masses, okays up to 50% tariff hike
ISLAMABAD: Consumers can expect a potential 50% increase in natural gas prices in Pakistan starting from July, The News reported, when the new fiscal year begins.

The Oil and Gas Regulatory Authority (Ogra) Friday concluded its determinations for two struggling state-run gas utilities and submitted them to the government for issuance of notification.

For the upcoming fiscal year 2023-24, Ogra has calculated an estimated revenue requirement (ERR) of Rs697.4 billion to be collected from gas consumers.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Pakistan’s textile exports plunge 20% in May: APTMA
Exports of Pakistan’s textile sector witnessed a significant decline of 20%, clocking in at $1.31 billion in May in comparison to $1.64 billion recorded in the same month of the previous year, as per provisional data released by the All Pakistan Textile Mills Association (APTMA) on Saturday.

It also showed that the country’s textile exports in the first eleven months of FY23 decreased by 15% to $15.02 billion, declining from $17.61 billion recorded in 11MFY22, a fall of $2.59 billion.
APTMA had earlier warned that the country’s textile exports could fall by $3 billion this year as compared to last year, while urging authorities to take immediate and urgent intervention.

“The decline in textile exports has been progressively accelerating,” APTMA Patron in Chief Gohar Ejaz had said in a letter to Prime Minister Shahbaz Sharif in April.

“Given the trajectory of decline, Pakistan is likely to fall short by $3 billion in textile exports from the exports achieved last year of $19.4 billion without taking into account any increase from newly installed capacity,” Ejaz had warned.

Meanwhile, as per latest data shared by the Pakistan Bureau of Statistics (PBS), the country’s exports during July-May (2022-23) were recorded at $25.366 billion against exports of $28.871 billion in July-May of 2021-22, a decline of 12.14%.

On a month-on-month basis, the exports during May 2023 increased by 2.29% when compared to the exports of $2.137 billion in April 2023.
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

^^^ Probably yes. Any idea where it is kept?

Likely it will be under the 'safe keeping' of the Pindi boys.

No audit required. Pls they will charge for security expenses
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Surging Inflation: Bread Prices Make Breakfast Costlier In Pakistan
While already reeling under record-high food inflation, consumers are now bracing for another shock as they will be paying an average 10 per cent more for branded breakfast items from Sunday.

Breadmakers have again raised the prices of various bakery items citing surging rates of raw materials, utility bills and transportation/distribution costs.

After pushing up prices by 16-17pc in June 2022, the manufacturers again jacked up the prices of their products by an average 19pc in September 2022 and with the latest third hike of 10pc consumers have to brave an overall 46pc spike in less than a year.

A four-member family, which was earlier spending Rs728 every month for procuring two packs of small bread (Rs91 each) in June 2022, will now have to spend Rs960 (Rs120) for the same.
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

Sir, the devil is in the details...

From that article
The regulator has proposed eliminating the distinction between protected and unprotected slabs for gas consumers and setting the price at 1238.68/mmBtu.

This change will result in a significant increase in gas prices, up to 923%, for protected low-slab consumers.

However, two highly gas-consuming slabs will benefit from the new pricing as they were previously paying up to Rs3,100/mmBtu.
The aam awaam is truly f#@&ed while the paki elite can have more peacock biryani :mrgreen:
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Blocked funds threaten airline operations in Pakistan: Iata
The International Air Transport Association (Iata) has warned that rapidly rising levels of blocked funds pose a threat to airline connectivity in several countries including Pakistan.

The industry’s blocked funds have increased by 47% to $2.27 billion in April 2023 from $1.55 billion in April 2022, the global airline association said in a statement on Sunday.

“Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets,” the Iata added.
The top five countries account for 68.0% of blocked funds: Nigeria ($812.2 million), Bangladesh ($214.1 million), Algeria ($196.3 million), Pakistan ($188.2 million) and Lebanon ($141.2 million).
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

New IMF programme?
WITH the PTI chief effectively sidelined for now, the PML-N-led government is looking to provide some relief to the people and businesses before the next election. It has already cut petrol prices significantly and plans to present a relatively expansionary budget to revive its political fortunes.

Some things may not be possible because of strict IMF conditions. Hence, it has announced it will let the current IMF programme end this month, after seven months of inconclusive talks on the ninth programme review, with Finance Minister Ishaq Dar blowing hot and cold over Islamabad’s worsening ties with the Fund.

Reportedly, the PML-N would like to negotiate a fresh loan facility with the lender, probably after the polls. In between, it expects the IMF to approve the ninth review and release the $1.2bn tranche before the programme ends on June 30.
In order for that to happen, Mr Sharif recently held a virtual meeting with the IMF’s managing director to pave the way for the conclusion of the review and the release of funds. In this regard, the government has also shared its budget targets with the lender even though this was not required under the ninth review.

However, indications are that the Fund will not oblige and that the staff-level agreement — the talks for which were completed over three and a half months ago — won’t happen anytime soon.

Fund officials have made it quite clear that the agreement hinges on Pakistan’s ability to arrange fresh loans of $6bn to bridge this year’s gross financing gap.

The Fund is not ready to subscribe to Islamabad’s viewpoint that the significant reduction in the current account gap has cut financing requirements for the present year.
The hard time the IMF has given on the inconclusive ninth review is an indication that negotiations for a new funding programme will be even tougher. If the ninth review doesn’t come through, Pakistan’s foreign exchange reserves would deplete further in the run-up to the polls and the formation of a new government; also, its debt sustainability indicators will deteriorate.

In other words, a new government seeking a fresh IMF deal will be forced to agree to far more difficult conditions and pre-arrange significantly large gross foreign financing to get the dollars. That Pakistan needs the IMF programme to reverse its economic downturn and stay solvent cannot be overstated.

No bilateral, multilateral or commercial lender is likely to help us unless the IMF is on board. One hopes that the government’s planned relief for voters doesn’t further fracture Islamabad’s relations with the Fund.
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Re: Pakistani Economic Stress Watch

Post by williams »

A_Gupta wrote:Pakistan allegedly has about 65 tons of gold reserves; that is worth around USD $3.7 billion. Maybe they can liquidate that. Assuming someone hasn't already looted the national treasury.
More than gold they have the nukes. They could liquidate that. They already have the deterrence being the land of stinking Abduls why waste the money on something that is less useful? :rotfl:
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Re: Pakistani Economic Stress Watch

Post by Neela »

Manish_P wrote:
Neela wrote: Sirji . .. PIA is rotting corpse.
Neela ji, pakis don't mind necrophilia remember
.. Assets like aircraft, which would have some value are likely to be seized for nonpayment of dues. But PIA operate very old aircraft . Who'd want that....
Pakis can put it on the market for soosai jihadis for another 9/11... or threaten to do so to extort protection money from the targets..

Really the sky is the limit for the jasba-fool Pakis
Sirji,
Saudis are under the current leadership are looking at securing their future. "Modi is like my elder brother" - MBS. Lets not forget it was Air India which flew over Saudi territory to Israel FIRST - breaking the shackles.
Amreekis have themselves in a twist in UKR.
Which basically means that Jihadi terror on a large scale isnt being supported by its principal proponents. Pakis are the shoeshine boys ...the change still needs to come from the patrons.
Last edited by Neela on 05 Jun 2023 13:54, edited 1 time in total.
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Re: Pakistani Economic Stress Watch

Post by Neela »

Dilbu wrote:Blocked funds threaten airline operations in Pakistan: Iata
The International Air Transport Association (Iata) has warned that rapidly rising levels of blocked funds pose a threat to airline connectivity in several countries including Pakistan.

The industry’s blocked funds have increased by 47% to $2.27 billion in April 2023 from $1.55 billion in April 2022, the global airline association said in a statement on Sunday.

“Airlines cannot continue to offer services in markets where they are unable to repatriate the revenues arising from their commercial activities in those markets,” the Iata added.
The top five countries account for 68.0% of blocked funds: Nigeria ($812.2 million), Bangladesh ($214.1 million), Algeria ($196.3 million), Pakistan ($188.2 million) and Lebanon ($141.2 million).
From the link:
In February this year, Virgin Atlantic announced pulling out of Pakistan, just over two years since it launched services


This is the problem when your currency , keeping to glorious Paki tradition, threatens to shoot itself. Tickets are purchased in local currency. it is converted to USD for repatriation. But this takes place during the accounting cycle- 3 months? . In 3 months, the Paki rupee would have devalued. What could have been X USD in previous Qtr would now be (X-y) USD. Airlines would face a loss. And the govt is holding on to whatever USD they have ...making it even more difficult.
Airlines will pull the plug.

But this affects just a miniscule portion of the populace.
Just in the last 3 months:
Maida , flour is up
Cooking Oil is up.
Gas is up.
Electricity is up.
Factories are closing.
Textiles is shrinking.

And the best of all - no one seems to step up to contain this shithole going down the shithole. It is diferent isnt it this time.
Anger needs to turn towards the Army....the only institution that still wields a lot of power. We had a taste of it....but I do really feel that they are on borrowed time. If there's a coup in the ranks, these guys are finished.
VishnuS
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Re: Pakistani Economic Stress Watch

Post by VishnuS »

A_Gupta wrote:Pakistan allegedly has about 65 tons of gold reserves; that is worth around USD $3.7 billion. Maybe they can liquidate that. Assuming someone hasn't already looted the national treasury.
Sirji

I doubt they have 65 tonnes of Gold. Now, please don't take it in wrong way. What I mean is during all these years some general might have replaced gold bars with copper alloy bars. This is not the first time someone had found all their gold was lost and it was replaced with copper alloy.

My rationale is that since 1998, Pak didn't had the need to peg their gold for money, imagine yourself in shoes of Paki General who is incharge of treasury, 25 years have passed and that gold might have changed hands of at least 6 generals. Do you think not even one of'em tampered with it??

If it was really Gold, then we should at least see the discussion of pegging it to get some loan right, but no one talks about that....

But yeah, let's wait and see, I am sure we'll find out about this gold and it's value by end of this year.
A_Gupta
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Re: Pakistani Economic Stress Watch

Post by A_Gupta »

VishnuS wrote: I doubt they have 65 tonnes of Gold. Now, please don't take it in wrong way. What I mean is during all these years some general might have replaced gold bars with copper alloy bars. This is not the first time someone had found all their gold was lost and it was replaced with copper alloy.
My thought too. Though copper would also be looted. Maybe some cheap gilt painted iron would be used as a replacement.
Deans
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Re: Pakistani Economic Stress Watch

Post by Deans »

VishnuS wrote:
A_Gupta wrote:Pakistan allegedly has about 65 tons of gold reserves; that is worth around USD $3.7 billion. Maybe they can liquidate that. Assuming someone hasn't already looted the national treasury.
Sirji

I doubt they have 65 tonnes of Gold. Now, please don't take it in wrong way. What I mean is during all these years some general might have replaced gold bars with copper alloy bars. This is not the first time someone had found all their gold was lost and it was replaced with copper alloy.
Exactly. Pledging gold (as India did in 91) would be a straightforward solution. However, lenders would want to take physical delivery of the gold
and that's where Pak will presumably be caught out.
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Re: Pakistani Economic Stress Watch

Post by disha »

A_Gupta wrote:
VishnuS wrote: I doubt they have 65 tonnes of Gold. Now, please don't take it in wrong way. What I mean is during all these years some general might have replaced gold bars with copper alloy bars. This is not the first time someone had found all their gold was lost and it was replaced with copper alloy.
My thought too. Though copper would also be looted. Maybe some cheap gilt painted iron would be used as a replacement.
Why thought when it is most likely be a fact. And yes, copper is also too precious. The "cheap gilt painted iron" is actually pig iron.
Manish_P
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

Neela wrote:..
Sirji,
Saudis are under the current leadership are looking at securing their future. "Modi is like my elder brother" - MBS. ...
Sir ji,

'I, against my brothers. I and my brothers against my cousins. I and my brothers and my cousins against the world' - Old arabic tribal (bedouin) saying

Works in reverse as well, just like the script

What MBS has done to his immediate cousins/uncles, over the years, to grab power, is freely available online.

Anyway OT for this thread
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Re: Pakistani Economic Stress Watch

Post by rajsunder »

There is always the option of selling of fauji foundation companies. Heard that they are over $100 billion USD in assets.
That is the only way the terrorist state of pakistan can stay afloat and hope for a better tomorrow.
yensoy
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Re: Pakistani Economic Stress Watch

Post by yensoy »

Finally the exchange rates are starting to make sense. As I always suspected, even the so-called "Open Market rate" is a fraud.
Dollar loses Rs5 in open market (Dawn link)
The closing price of dollar in the open market was Rs303 on Tuesday — a gain of Rs 5 for PKR over the previous day’s Rs308.

The shortage of dollars has been a permanent feature of the open market since inflows dried up from all possible sources. Due to a grey market that offers Rs320 per dollar, the remittances from exchange companies have almost reduced to zero.
...
The State Bank reported the closing price of dollar in the interbank as Rs286.56 on Tuesday, an appreciation of 37 paisa against PKR over the previous day’s Rs286.19.
So we have admission that there is an official interbank rate, an open market rate and a grey market rate. Interbank is forced to maintain H&D so it is below Rs 300. Open market is allowed to float a bit to figure out where the real truth lies, a little over Rs 300. The grey market is the actual kerb rate, apparently Rs 320. The Kabul rate is not referenced here, who knows how high that may be.
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Re: Pakistani Economic Stress Watch

Post by Manish_P »

Who needs dallars when you can barter, hain.

Bakistan is firmly on the road to riyasat-e-pudina

Yawn - Goods for barter notified
Ministry of Comme­rce has announced a list of 57 products for barter trade with Afghanistan, Iran and Russia to save the country’s foreign exchange at a time when its foreign exchange reserves are running low.

The commerce ministry through SRO642 on Tuesday notified a list of goods eligible for import and export under barter trade with Afghanistan. However, only imports are allowed under the scheme with Iran and Russia.

No goods are allowed to export to Iran under the barter system (# why no support from humsaya islamic birather mulk. they want only dallars ? :(( ). Only fruits, nuts and vegetables, minerals & metals, spices, coal and its products, petroleum crude oil, LNG and LPG, miscellaneous chemical products, fertilisers, articles of plastics and rubber in primary form, raw hides and skins, raw wool, articles of iron & steel can be imported from Iran.

Items allowed for import from Russia are pulses, wheat, coal and its products, petroleum oils (including crude), LNG and LPG, fertilisers, tanning and dying extracts, articles of plastics and rubber in primary form, minerals and metals, wood and paper, chemicals products, iron and steel, and items of textile industrial machinery.
sanjaykumar
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Re: Pakistani Economic Stress Watch

Post by sanjaykumar »

So in a barter system, goods flow from Pakistan… but they are not exchanged for goods from Pakistan.

Maybe they are bartered for money? :roll:
vonkabra
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Re: Pakistani Economic Stress Watch

Post by vonkabra »

Personally I feel this is the right time for the GoI to announce a major arms purchase - best would be another tranche of Rafales though possibly the Project 75I might also suffice. Either the Pakis will try to match it with something from China (sending economy into final and irreversible tailspin) or they can die of shame from finally having to admit they simply can't compare (the second option will actually cause them more trauma).
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Economist sees imminent default without IMF
KARACHI: Leading economist Dr Kaiser Bengali has said that Pakistan’s economy is in recession and the default is imminent without International Monetary Fund’s (IMF) assistance.

“The government cannot generate additional tax revenue in these testing times. Instead, it has to cut expenditures in budget,” he said while responding to queries of the media at the Karachi Press Club on Wednesday.

He was of the view that there was hope among rulers till two weeks ago that the country would receive new foreign funding but that “has now vanished”.

“It seems the IMF is demanding some political concessions from Pakistan, that’s why the loan programme hangs in the balance.” Terming rupee devaluation an ongoing phenomenon, Bengali pointed out that a trader opened a Letter of Credit (LC) for import at Rs320/$ the other day compared to the exchange rate of Rs287/$ in the inter-bank market.
The economist said that the number of rich people and big landlords was too small to generate the desired direct taxes, adding that there was no other option but to cut expenditures in the budget for FY24 to come out of the economic and financial crises.

“Defence budget will be in the queue to be revised downwards (to create fiscal space to support economic growth),” he remarked.{Not going to happen}
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

^^^
While economists are thinking about a realistic budget cutting expenditure, the reality in TSP is exactly the opposite.
20pc pay hike likely for govt employees
ISLAMABAD: Ashfaq Tola, who chairs the Reforms & Resource Mobilisation Commission, said on Wednesday that the salaries of government employees would be raised by around 20 per cent in the coming budget.

“Salaries of lower grade employees is very low and the scales need a major boost,” Mr Tola observed.

He parried a question over the perks and privileges enjoyed by bureaucrats.
The report said the estimated tax evasion in the real estate sector was Rs500bn annually, in tobacco sector Rs240bn, Rs 106bn in tyres and auto lubricants, Rs 65bn in the pharma sector. In addition, the country loses Rs45bn to illegal tea trade.

Mr Tola said tax evasion was a menace as it had created a parallel economy.
Mr Tola criticised the existing implementation of the 18th amendment, saying that while 58.5 per cent of national resources were being transferred to the provinces, they were not held accountable for their performance.

For checking smuggling, he said scanners should be installed to check containers returning after delivering transit trade goods in Kabul.
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Re: Pakistani Economic Stress Watch

Post by Dilbu »

Govt may amend law to bring in dollars
ISLAMABAD: The government is considering allowing people to bring in up to $100,000 from abroad without disclosing the source of income in a move that it hopes can fetch billions of dollars in the next fiscal year. However, this move can create some troubles.

Sources told The Express Tribune that the government is considering bringing an amendment to Section 111 (4) of the Income Tax Ordinance that deals with unexplained income.

Some describe the proposals as a perpetual tax amnesty scheme while others see it as an alternate source to arrange precarious foreign currency to avoid a default.
Which is another breach of conditions set by IMF.
Pakistan has committed with the International Monetary Fund (IMF) that it will not give any further tax amnesty. Any such move to relax the Rs5 million foreign remittances without disclosing the source of income will be treated as an amnesty.

Usually, every commercial bank inquires about the source of remittance of as small an amount as $500 before transferring an equal amount in rupees in the bank account of the beneficiary.

The sources said the government is hoping to receive billions of dollars through this channel which, they said, would provide respite until a new IMF programme is signed.
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Re: Pakistani Economic Stress Watch

Post by A_Gupta »

Won't unexplained $ inflow violate FATF also?
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