Pakistani Economic Stress Watch

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Re: Pakistani Economic Stress Watch

Postby SSridhar » 17 Feb 2018 14:39

Now that the Pakistanis are unable to raise commercial loan externally, where do they turn to, Chinese after all, their only source.

This pushes them deeper into the Chinese hands. A vicious cycle.

We have Maldives, Sri Lanka, Nepal and Pakistan to contend with in terms of economic depravity apart from, of course, enmity and Chinese intrusion.

Pakistan borrows $500 million from China to shore up its reserves - PTI
Pakistan has contracted another foreign commercial loan of $500 million from the Industrial and Commercial Bank of China (ICBC) to shore up its depleting reserves.

The Express Tribune reported that the with new borrowing the Chinese financial institution's contribution to supporting a strong rupee against the US dollar increased to $1 billion in just three months.


It further reported quoting sources in the finance ministry that the government contracted the loan on January 15 at a rate in the range of 4.5 per cent.

In January, the country took a total of $704 million worth of new loans, taking foreign borrowings to $6.6 billion in just seven months of this fiscal year, sources said.

The foreign loans were equal to 86 per cent of the annual budgetary estimates that parliament had approved in June last year. This suggests that foreign loans for the second consecutive year may cross USD 10 billion.

China was the single largest lender that gave a total of USD 1.6 billion, which was equal to one-fourth of the total foreign loans Pakistan has received in the last seven months.

Beijing also gave roughly $610 million for project financing during the first seven months.


In terms of source, sovereign bonds were the single largest source after Islamabad raised USD 2.5 billion in November, which contributed roughly 38 per cent to total foreign loans.

It was the second loan that the ICBC has given to Pakistan to support its diminishing foreign currency reserves, which are largely used to defend a strong rupee and finance the trade deficit. The ICBC had also given USD 500 million in October last year.

Sources in the State Bank of Pakistan said that it was still intervening in the exchange market to keep the dollar-rupee parity at current level.

In December, the central bank let the rupee depreciate by 5.2 per cent against the US dollar. But it was still far less than the International Monetary Fund's assessment of the real value of the rupee.

With fresh foreign loans, the total foreign commercial borrowings in the first seven months of this fiscal year have increased to USD 1.8 billion, said the sources. The finance ministry had informed parliament in June last year that it would obtain USD 1 billion as commercial loans during 2017-18 that will end on June 30. However, it has already breached the limit with five months remaining.

So far, Citibank has given $267 million, Credit Suisse AG loaned USD 255 million, Standard Chartered Bank London $200 million and Dubai Bank $55.9 million. The share of foreign commercial banks in total loans stood at 27 per cent.

The loans are obtained to stop the downward slide of the official foreign currency reserves that currently stand at $12.8 billion even after issuing $2.5 billion worth of sovereign bonds in November.

The ministry is trying in vain to stop the reserves from slipping below the two-and-a-half-month import bill cover, which at current value of the import bill stands at $12.3 billion.


Official foreign currency reserves have depleted by USD 3.5 billion since July. The current account deficit during the first half of the fiscal year widened to over USD 7.5 billion.

Pakistan's total external debt and liabilities as of December 2017 stood at USD 88.9 billion, higher by $5.8 billion or 6.9 per cent over six months ago.

The main increase came by issuing sovereign bonds and taking expensive commercial loans. In the first half, debt obligated by issuing NSukuk and Eurobonds increased by 52 per cent to $7.3 billion.

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Re: Pakistani Economic Stress Watch

Postby Falijee » 18 Feb 2018 03:37

Pakistan’s external debt, liabilities touch $89 billion
The Express Tribune

ISLAMABAD: Amid declining foreign exchange reserves and weakening capacity to repay, Pakistan’s external debt and liabilities rose sharply to almost $89 billion at the end of December, reported the State Bank of Pakistan (SBP).
Pakistan’s total external debt and liabilities as of December 2017 stood at $88.9 billion, higher by $5.8 billion or 6.9% over six months ago. There was an increase of $13.2 billion in the amount of external debt and liabilities in just one year.
The rise in external debt comes at a time when official foreign currency reserves are plunging as well. The SBP has already lost $3.5 billion worth of reserves since the start of the fiscal year.


By the looks of it, this "story" is not yet over :mrgreen:

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Re: Pakistani Economic Stress Watch

Postby Falijee » 18 Feb 2018 03:48

Word Of Mouth Advertising : Pakistan Among Fastest Emerging Economies In Asia :lol:

'Pakistan among fastest emerging economies in Asia'
The Express Tribune

NORWAY / OSLO: Pakistan has become one of the top five emerging economies in the world, said Minister for Planning, Development and Reform Ahsan Iqbal.
Iqbal, who is on an official visit to Norway, said Pakistan has exhibited one of the fastest growth rates in the last five years. He was interacting with Pakistani-Norwegians at an event organised by the Embassy on Friday..Highlighting Pakistan’s rapid economic development, the minister said a few years ago, Pakistan was not considered the safest place in the world, but now it is ranked among the fastest emerging economies in Asia.

Doubt that even the (welfare collecting ) Pakis present at the embassy "interaction" believe in this BS!

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Re: Pakistani Economic Stress Watch

Postby Bart S » 18 Feb 2018 05:58

Ahsan Iqbal wrote:the minister said a few years ago, Pakistan was not considered the safest place in the world, but now it is ranked among the fastest emerging economies in Asia.


What an absurd statement. Is he comparing safety or economic growth? Is Pakistan now considered the safest place in the world? :roll: :eek:

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Re: Pakistani Economic Stress Watch

Postby schinnas » 18 Feb 2018 07:48

SSridhar wrote:Now that the Pakistanis are unable to raise commercial loan externally, where do they turn to, Chinese after all, their only source.

This pushes them deeper into the Chinese hands. A vicious cycle.

We have Maldives, Sri Lanka, Nepal and Pakistan to contend with in terms of economic depravity apart from, of course, enmity and Chinese intrusion.



Very long term, good news for us. In every nation Chinese have intervened in, there is strong public resentment against them after some time. Even a country like Singapore with majority ethnic Chinese hate China for their ham handed way of operating.

Its just a matter of time before Nepal, SL and Maldives have public protests against China. Pukiland will be an exception as they will even bed with the devil if it helps them in their enmity against India.

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Re: Pakistani Economic Stress Watch

Postby kancha » 21 Feb 2018 23:15

Living Off The Debt

On Pakistan's debts and forex. A very interesting piece

The external scorecard is getting red with every passing quarter; and now the weekly numbers are becoming crucial. The reserves are falling at a steady pace of $200-250 million per week for last six weeks and at this pace, without additional external debt, the IMF programme is three months away, assuming the Fund intervention is inevitable once the SBP reserves are below 2 months of import cover.


From Jun13 to Dec17, the country’s foreign reserves increased by $9.1 billion to $20.1 billion while the total net external debt increased by massive $27.9 billion to reach $88.9 billion (27.3% of GDP). In case of public debt, the net increase stood at $19.3 billion in the same time to reach $70.5 billion (21.7% of GDP), while SBP foreign reserves are up by $8.1 billion.

Pakistan, in simple words, has consumed $18.9 billion of debt (increase in debt minus hike in reserves) in thin air – out of which $11.2 billion is eaten by the government while the private sector (including PSEs) has swallowed $7.7 billion of debt. In relative terms, the private sector debt increase is unprecedented and its utilization efficiency probably would be higher than government’s fiscal use.

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 22 Feb 2018 00:16

SSridhar wrote:Now that the Pakistanis are unable to raise commercial loan externally, where do they turn to, Chinese after all, their only source.


In baki lexicon, that's akin to borrowing from one's "brother". Iron brother, that is. Best kept within the family :wink: . The most you owe him is the right to your share of the landed property, which was never yours to begin with.

Win-wan situation (pun with the names intended)

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Pakistani Economic Stress Watch

Postby Peregrine » 23 Feb 2018 02:58

X Posted on theTerroristan Thread

Foreign exchange: SBP's reserves continue to dip, reach $12.7b
KARACHI: Foreign exchange reserves held by the State Bank of Pakistan (SBP) continued to remain under pressure,decreasing 1.01% on a weekly basis, according to data released by the central bank on Thursday.
The fall marks the 10th successive week of decline, raising concerns over Pakistan’s ability to meet future payment obligations and a bulging current account deficit.
On February 16, foreign currency reserves held by the central bank were recorded at $12.7037 Billion, down $130.2 Million or 1.01% compared to $12.8339 Billion in the previous week.
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Re: Pakistani Economic Stress Watch

Postby anupmisra » 23 Feb 2018 06:36

baki foreign exchange reserves over ten year period. Source: CEIC

Image

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Re: Pakistani Economic Stress Watch

Postby yensoy » 23 Feb 2018 08:58

How much of the above "reserves" are from borrowed funds? Pakis should appoint Nirav Modi as their economic advisor.

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Re: Pakistani Economic Stress Watch

Postby Peregrine » 23 Feb 2018 17:20

yensoy wrote:How much of the above "reserves" are from borrowed funds? Pakis should appoint Nirav Modi as their economic advisor.
yensoy Ji :

The Latest Terroristan Figures of 16-02-2018 are :

With SBP : US$12.7037 – With Commercial Banks US$ 6.1250 - Total : US$18.8287

This act of Double Accounting is from the following Extract of the Article :

After debt repayments in coming months, SBP’s own net reserves will be a mere $4.5 billion
As of November 2017, the SBP’s official foreign currency reserves were $12.66 billion including $5.8 billion worth of currency swaps and forward contracts. Despite showing $5.8 billion as part of its own reserves, the SBP has also included the same amount in the total $6.01 billion reserves held by commercial banks.
By excluding $5.8 billion of short-term loans, the net usable reserves with the commercial banks stand at only $200 million. Out of $5.8 billion, $1.68 billion was obtained for one month, $2.46 billion for up to three months and $1.7 billion for up to one year, according to the SBP.
“This is clearly double counting of $5.8 billion. In principle, it should have excluded this sum from the commercial banks’ reserves,” said Dr Ashfaque Hasan Khan, former director general of Debt of Ministry of Finance.
Thus the “Real Situation” is as follows :

AAA : With SBP : US$12.7037 – With Commercial Banks US$ 0.3250 - Total : US$13.0287 OR

BBB : With SBP : US$06.9037 – With Commercial Banks US$ 6.1250 - Total : US$13.0287

Re: Your comment about Nirav Modi : In comparison with the Terroristanis Nirav Modi is just an Apprentice. The Terroristanis are Past Masters in the Game of Fraud!

FYI : Indian Forex Reserves as on 16-02-2018 : US$ 421.7207 Billion - Increase over Previous Week US$ 1.9604 Billion

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Pakistani Economic Stress Watch

Postby Peregrine » 26 Feb 2018 16:21

X Posting on the Terroristan Thread

Pakistan's economic woes go from bad to worse ahead of polls: Bloomberg

KARACHI: Five months before the general elections PML-N’s government is struggling to fix the failing economy.

The finance managers attempted to bring discipline by currency devaluation in December and by raising taxes in October to curb rising imports. Despite these moves both current account and trade deficits are hitting records while foreign exchange reserves continue to fall, Bloomberg stated in a recent analysis of Pakistan’s state of economy.

Pakistan’s external sector indicators “signal a crisis and are going from bad to worse,” Uzair Younus, a South Asia director at Washington-based consultancy Albright Stonebridge Group LLC told Bloomberg.

“With elections around the corner, the government will simply kick the can down the road. The next government will face a balance of payments crisis and most likely go to the International Monetary Fund for yet another bailout,” he said.

The nation’s imports rose to a record last month despite the government increasing taxes on more than 700 items in October. With the tax on almost half those products reversed this month, the import bill remains under pressure.

Bloomberg reported that the economy is growing at 5.3 percent -- the fastest pace in a decade -- with import demand fueled by China’s financing of power plants and road projects under the China-Pakistan Economic Corridor (CPEC).

The current account deficit has continued to widen after a currency devaluation in December, putting further pressure on the rupee and pushing authorities to borrow more. The current account gap reached 4.7 percent of gross domestic product in the seven months ending January, compared with 3.5 percent a year earlier.

Pakistan’s foreign exchange reserves have continued to decline after the last IMF loan program ended in September 2016. But now, according to the report, economists are predicting that Islamabad will need a bailout package later this year to shore up its finances.

The State Bank of Pakistan (SBP) unexpectedly increased its interest rate for the first time in more than four years last month. The SBP chief Tariq Bajwa said the regulator is “pre-empting signs of the economy overheating and trying to keep inflation under control.”

Pakistan’s financial risk in January rose the most since Bloomberg started compiling data in 2015. Pakistan’s benchmark stock index has dropped 18 percent since a peak in May last year with foreigners selling shares after the country was upgraded to emerging market status by MSCI Inc.

Political turmoil following the ousting of former Prime Minister Nawaz Sharif in July spurred further drops, it said.

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Re: Pakistani Economic Stress Watch

Postby Falijee » 27 Feb 2018 06:27

Rising Imports, Widening Deficit, Falling Dollar Reserves, Rising Interest Rate Coupled With Increased Financial Risk . Paki Economy In A Nosedive

Pakistan’s Economic Woes Go From Bad to Worse Before Elections
Bloomberg

Five months before national polls Pakistan’s government is struggling to fix its economy. The South Asian nation of more than 200 million people devalued its currency in December and raised taxes in October to curb rising imports. Despite these moves both Pakistan’s current account and trade deficits are hitting records while foreign exchange reserves continue to fall.
Pakistan’s external sector indicators “signal a crisis and are going from bad to worse,” said Uzair Younus, a South Asia director at Washington-based consultancy Albright Stonebridge Group LLC. “With elections around the corner, the government will simply kick the can down the road. The next government will face a balance of payments crisis and most likely go to the International Monetary Fund for yet another bailout.” The begging bowl syndrome :mrgreen:
Below are five charts that highlight the problem:

Record Imports

The nation’s imports rose to a record last month despite the government increasing taxes on more than 700 items in October

Widening Deficit

The current account deficit has continued to widen after a currency devaluation in December, putting further pressure on the rupee and pushing authorities to borrow more.

Dollar Reserves

Pakistan’s foreign exchange reserves have continued to decline after the last IMF loan program ended in September 2016. While the nation raised dollar-denominated debt in November to bolster reserves, outflows since then have almost wiped out that amount.

Rate Hike

Pakistan’s central bank unexpectedly increased its interest rate for the first time in more than four years last month.
...“pre-empting signs of the economy overheating and trying to keep inflation under control.”

Rising Risk

Pakistan’s financial risk in January rose the most since Bloomberg started compiling data in 2015. Pakistan’s benchmark stock index has dropped 18 percent since a peak in May last year with foreigners selling shares after the country was upgraded to emerging market status by MSCI Inc.

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Pakistani Economic Stress Watch

Postby Peregrine » 01 Mar 2018 04:05

X Posted on the Terroristan Thread

Government eyes $61 billion export revenue in next five years

ISLAMABAD: Pakistan eyes more than $60 billion in exports revenue in the next five years, betting on a double-digit growth in outbound shipments so far in the current fiscal year, but industry officials linked the target with ease of doing business.

Ministry of Commerce on Wednesday arranged consultative meeting with relevant stakeholders, including representatives from chamber and commerce in order to get their inputs for promoting foreign trade in years to come.

They discussed the three different scenarios under Pakistan’s strategic trade policy framework (STPF) for 2018-2023. Sounds like STFUP!

If the country achieves only 10 percent annual growth in exports the revenue could go up to $36.21 billion over the next five years. If exports grow 15 percent a year the foreign revenue could increase to $47.28 billion. But, with 20 percent annual growth, Pakistan’s exports could touch $61.03 billion over the next five years.

Exports started to pick up in the range of 10 to 11 percent in the first seven months of the current fiscal year. However, the overall performance of exports remained dismally low and stood at $20.4 billion in the last fiscal year of 2016/17. Exports had actually declined from $24 billion to $20.4 billion in the last four-year period.

The STPF for 2018-2023 is expected to be presented before the federal cabinet in May 2018 just ahead of the next general elections.

Any policy framework for promoting country’s trade without ownership of upcoming government will pose question mark that how effectively the policy framework will be implemented in the next five years. However, the policy makers said the trade issues need to be looked beyond political divide and the same policy might be fine-tuned after the next government comes to power.

Federal Secretary Commerce Younus Dagha told the participants of the consultative meeting about the preparation of STPF for 2018-2023. He said the new policy would provide more incentives to small and medium enterprises and women entrepreneurs.

The STPF for 2018-2023 will be comprised of eight basic fundamentals, including institutional strengthening, investment linkages, service strategy, product development and compliance, gender mainstreaming, market access and regional connectivity, trade facilitation and finally trade promotion and branding.

Vice President Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Karim Aziz Malik said the electricity tariff in Pakistan is 22 percent high as compared to other regional states. Malik said government will have to reduce cost of doing business in Pakistan in order to maximise competitive edge. He also called for reduction in tax burden on export oriented sectors.

FPCCI Vice President said the trade deficit widened because of free trade agreements especially with China and Malaysia. He demanded of the government to provide the same incentives to Pakistani businessmen in upcoming special economic zones as being provided to China under China Pakistan Economic Corridor.

Commerce ministry’s top officials, including Director General Trade Policy Nauman Aslam and senior official Mohammad Ashraf briefed the participants about the government measures after listening to their views.

The ministry has so far held nine consultative meetings at different places across the country in order to incorporate views of stakeholders for preparation of the new policy framework. The process kick-started in October 2017 and scrutiny of proposals will be done in the current month. The intra and inter-ministerial consultations will be done in March 2018 and the first draft of the upcoming policy will be ready by April 2018. The SPTF for 2018-2023 will be tabled before the cabinet for approval.

On the implementation of last SPTF from 2015-2018, the ministry officials told the meeting that restructuring of ministry of commerce, Trade Development Authority of Pakistan and Pakistan Horticulture Development and Export Company is underway, while placement of Intellectual Property Organisation under the commerce ministry has been implemented. Government is also strengthening skill development institutes and creating new export councils for rice and pharmaceutical products. But, there has been a medium progress on payment of stuck tax refunds.

Ministry officials said reasons for slow implementation of last SPTF were its nine-month delayed announcement, late publication of statutory regulatory orders/circulars and inherent flaws in business procedures.

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 01 Mar 2018 16:53

Every Pakistani Household Owes Rs. 830,000

Pakistan’s total debt and liabilities (TDL) watered up to perspiring $242.8 billion at the end of December 2017 – booking an increase of 47.3% or $78.0 billion since June 2013 when the PMLN’s government took up the baton.
each Pakistani household is indebted with Rs. 830,000.
Total debt and liabilities of the economy-torn country now makes 74.7% of gross domestic product (GDP) – up from 68.6% in June 2013, the figures released by State Bank of Pakistan (SBP) on Friday showed.
In a latest development, the government also confessed that the country has deteriorated its external debt paying capacity and also growth of external debt in proportion to the foreign exchange reserves has considerably increased.


Image

http://azhar-azam.blogspot.com/2018/02/ ... every.html

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Pakistani Economic Stress Watch

Postby Peregrine » 02 Mar 2018 01:26

X Posted on the Terroristan Thread

Foreign exchange: SBP's reserves plunge $358 Million, stand at $12.35 Billion

KARACHI: Foreign exchange reserves held by the State Bank of Pakistan (SBP) continued to remain under pressure, decreasing 2.82% on a weekly basis, according to data released by the central bank on Thursday.

The fall marks the 11th successive week of decline, raising concerns over Pakistan’s ability to meet future payment obligations and a bulging current account deficit.

On February 23, foreign currency reserves held by the central bank were recorded at $12,345.6 million, down $358 million or 2.82% compared to $12,703.7 million in the previous week.

The decrease in reserves was attributed to external debt servicing and other official payments.

Overall, liquid foreign reserves held by the country, including net reserves held by banks other than the SBP, stood at $18,413.3 million. Net reserves held by banks amounted to $6,067.7 million.

Foreign exchange: SBP’s reserves continue to dip, reach $12.7b

Pakistan raised $2.5 billion in November 2017 by floating dollar-denominated sovereign bonds in the international market in a bid to shore up official reserves.

A few months ago, foreign currency reserves surged due to official inflows including $622 million from the Asian Development Bank (ADB) and $106 million from the World Bank. I.O.W ADDITIONAL LOANS of US$728 Millions. Another Day Another Loan! :rotfl:

Earlier, the SBP received $350 million under the Coalition Support Fund (CSF) and made payments of $62 million for external debt servicing.

In January, the SBP made a $500-million loan repayment to the State Administration of Foreign Exchange (SAFE), China.

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Pakistani Economic Stress Watch

Postby Peregrine » 02 Mar 2018 16:09

X Posted in the Terroristan Thread

Terroristan AKA Phudgingstan!

Energy sector circular debt touches record Rs922bn
ISLAMABAD: Pakistan’ energy sector’s circular debt is estimated to have gone beyond a record Rs 922 billion mark by end of November 2017.
According to a report submitted to the parliament this week, the Ministry of Finance has put the amount of circular debt at Rs 472.678bn as of November 30, 2017.
The report, however, did not explain that another Rs 450bn debt was separately parked with Power Holding Private Limited (PHPL) — a subsidiary of the power division — created to raise funds from commercial banks and is financed through surcharges built into the consumer tariff.
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Re: Pakistani Economic Stress Watch

Postby anupmisra » 03 Mar 2018 19:05

Pakistan's free trade agreement talks with Turkey nearing collapse

The commerce ministry has asked the government for clearance to take a long simmering dispute with Turkey to the World Trade Organisation (WTO) after prolonged discussions on a Free Trade Agreement (FTA) between the two countries have hit an impasse.
At issue is grant of GSP+ status by Turkey that Pakistan argues is an obligation given that Turkey and the European Union are part of a customs union. The ministry is arguing that out of the countries that enjoy GSP+ status with the EU, Turkey has extended the same status to all except Armenia and Pakistan.
In the seven rounds of FTA talks held since February 2015, Pakistan has repeatedly raised the matter of additional duties but no breakthrough has been achieved.
As a result, Pakistan’s exports to Turkey plummeted from $906 million in 2011 to $282m in 2017, a decline of 69pc.


For the turks, is bakistan = Armenia? :((

https://www.dawn.com/news/1392850/pakis ... g-collapse

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Re: Pakistani Economic Stress Watch

Postby Manish_P » 05 Mar 2018 12:46

Pakistan loses 50pc market share in Kabul

India has succeeded to penetrate in Kabul slashing the market share of Pakistan by more than 50 per cent in the last two years, Chairman Pakistan-Afghanistan Joint Chamber of Commerce and Industry Zubair Motiwala told Dawn on Friday.He said Pakistan’s trade with Afghanistan fell to $1.2 billion from $2.7bn within in the last two years and the country has been losing even the traditional markets of flour, men and women’s clothes and red meat.


Each year thousands of Afghans used to visit Peshawar for medical treatment but now they prefer India due to cheaper treatments and other attractions like concessional treatments. “Medical tourism of Peshawar, which was mainly due to Afghans, is now at zero level; hospitals in Hayatabad are empty,” he continued. Pakistan was the biggest supplier of shalwar qameez suits to Kabul but that too has changed since both India and China are now supplying the readymade suits which are traditionally Pakistani products.
:((

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Re: Pakistani Economic Stress Watch

Postby Mukesh.Kumar » 05 Mar 2018 13:01

anupmisra wrote:Pakistan's free trade agreement talks with Turkey nearing collapse

The commerce ministry has asked the government for clearance to take a long simmering dispute with Turkey to the World Trade Organisation (WTO) after prolonged discussions on a Free Trade Agreement (FTA) between the two countries have hit an impasse.
At issue is grant of GSP+ status by Turkey that Pakistan argues is an obligation given that Turkey and the European Union are part of a customs union. The ministry is arguing that out of the countries that enjoy GSP+ status with the EU, Turkey has extended the same status to all except Armenia and Pakistan.
In the seven rounds of FTA talks held since February 2015, Pakistan has repeatedly raised the matter of additional duties but no breakthrough has been achieved.
As a result, Pakistan’s exports to Turkey plummeted from $906 million in 2011 to $282m in 2017, a decline of 69pc.


For the turks, is bakistan = Armenia? :((

https://www.dawn.com/news/1392850/pakis ... g-collapse


Anupmisraji, for the Turks Armenia is a bad neighbour. Turks:Armenia::India:Pakistan. So being bracketed with Armenia shows how little the Turks think about Bakis

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Re: Pakistani Economic Stress Watch

Postby dhyana » 06 Mar 2018 14:10

Pakistan in talks with China to borrow $1b

Pakistan is in talks with a Chinese financial institution to obtain $1 billion as a foreign commercial loan, as its recent internal assessment revealed that inflows from traditional lenders would fall below budgeted projections.


The cost of borrowing from the Chinese bank could go over 5%...


Despite promises, Pakistan unlikely to get heavy funding by June

Sources said the immediate available option was to tap short-term foreign commercial loans in line with the government’s practice over the past four and a half years.


Ahh yes. The traditional path to prosperity... long-term usage of high-interest, short term loans. Good to see our friendly neighbors on this path.
Last edited by dhyana on 06 Mar 2018 14:22, edited 1 time in total.

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Re: Pakistani Economic Stress Watch

Postby Aditya_V » 06 Mar 2018 14:16

I think Pakistan must give up on unessecary stuff like Lahore Metro, Lahore Bus service and mainting Mughal gardens to improve finances.

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Pakistani Economic Stress Watch

Postby Peregrine » 08 Mar 2018 04:39

X Posted on the Terroristan Thread

Risks to Pakistan's economic outlook have increased: IMF

ISLAMABAD: In an ominous warning, the International Monetary Fund (IMF) has said that risks pertaining to Pakistan’s economic and financial outlook have increased and its medium-term debt repayment capacity has weakened, urging Islamabad to take immediate corrective measures.

The IMF released the statement almost one and a half day after the conclusion of its Executive Board meeting that held the ‘first post-program monitoring discussions’ with Pakistan. The discussions were earlier also held in Islamabad in December to gauge Pakistan’s ability to repay the IMF loan.

The IMF’s projections over the current account and budget deficits are gloomy to say the least, and cast a huge question mark on the narrative presented by former finance minister Ishaq Dar at the time of unveiling the government’s fifth budget in June last year. The IMF has projected that the country’s current account deficit will stand at 4.8% of total national income, or $16.6 billion, which is a staggering 83% higher than the government’s official estimates.

The IMF has also predicted that Pakistan’s official gross foreign currency reserves could slip to $12.1 billion – barely enough to finance 10 weeks of imports.

The directors of the IMF also asked Pakistan to improve its anti-money laundering and counter-terrorism financing regimes. They also want the country’s managers to devalue the currency to minimise damages to the external sector, and levy more taxes to control the growing budget deficit.

With “rising external and fiscal financing needs and declining reserves, risks to Pakistan’s medium-term capacity to repay the Fund have increased since completion of the Extended Fund Facility (EFF) arrangement in September 2016”, noted the IMF in its handout released Wednesday morning.

It said Pakistan’s near-term outlook for economic growth is broadly favourable and real GDP growth is expected to grow by 5.6% in fiscal year 2017-18, supported by improved power supply, investment related to the China-Pakistan Economic Corridor (CPEC), strong consumption growth, and ongoing recovery in agriculture. Inflation has remained contained.

However, it added, continued erosion of macroeconomic resilience could put this outlook at risk.

The budget deficit is expected to widen to 5.5% of GDP this year, which is equal to almost Rs2 trillion and will be the highest in Pakistan’s history in absolute terms. The official target is 4.1% of the GDP or Rs1.48 trillion.

The IMF said that the deficit may even go higher due to upcoming general elections.

The Washington-based lender also said that surging imports have led to a widening current account deficit and a significant decline in international reserves despite higher external financing. FY 2017/18’s current account deficit could reach 4.8% of GDP, with gross international reserves further declining in the context of limited exchange rate flexibility. This is equal to $16.6 billion – and far higher than $12.1 billion deficit that Pakistan has booked last fiscal year.

The IMF directors “noted with concern the weakening of the macroeconomic situation, including a widening of external and fiscal imbalances, a decline in foreign exchange reserves, and increased risks to Pakistan’s economic and financial outlook and its medium term debt sustainability”.

Pakistan’s external debt and liabilities have already increased to $89 billion by the end of December and the figure is expected to significantly jump by the time the current fiscal year ends due to mounting external repayment and trade related obligations. The IMF sees no change in the country’s debt burden and said that the overall debt-to-GDP ratio would remain at 69.7% – even higher than the limit set by parliament for the government.

The directors welcomed the authorities’ move to allow some exchange rate adjustment last December, but “stressed the importance of greater exchange rate flexibility on a more permanent basis to preserve external buffers and improve competitiveness”.

The IMF also encouraged Pakistan to phase out administrative restrictions that it has placed on imports to contain its bill.

It noted that external sector pressures are in part linked to the fiscal deterioration during last year and an accommodative monetary policy stance, as well as the high imports related to CPEC projects.

They called on the authorities to strengthen fiscal discipline through additional revenue measures and efforts to contain current expenditure while protecting pro poor spending. Complementing the recent increase in the policy interest rate with further monetary tightening would be important to address inflationary risks and help reverse external imbalances.

The IMF directors also emphasised the need for prudent debt management and caution in phasing in new external liabilities, and the urgency of tackling rising fiscal risks stemming from continued losses in public sector enterprises.

“There is absence of political consensus in Pakistan, which remains an obstacle to deep structural reforms,” said Tokhir Mirzoev, the outgoing resident representative of the IMF. He said that politics must be separated from the country’s economic agenda.

“The economic future of Pakistan is the collective responsibility of all political parties, whether they are in the government or in the opposition,” said Mirzoev, who ends his three-year term in Pakistan this week.

Cheers Image

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Re: Pakistani Economic Stress Watch

Postby arun » 08 Mar 2018 10:25

^^^ The “Official” Press Release put out by the IMF following First Post-Program Monitoring Discussions discloses that Per Capita GDP of the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan at USD 1463 and accordingly has fallen behind Bangladesh which owing to the years of exploitation by the Punjab Dominated Uniformed Jihadi’s of the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan was below that of the Terrorism Fomenting Islamic Republic when India liberated Bangladesh:

IMF Executive Board Concludes First Post-Program Monitoring Discussions with Pakistan

IMF data now discloses Bangladesh’s Per Capita GDP has overtaken the USD 1463 Per Capita GDP of the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan and stands at USD 1660:

IMF Data For Bangladesh Per Capita GDP

Is this case of Short Dark Rice Eating Bangladeshi Mohammammddens outstripping Tall Fair Tight Assed Sole Mohammadden Nuclear Power Pakistani’s an insidious Hindu, Jewish and Christist saazish hatched by RAW, Mossad and the CIA to malign Mohammaddenism and Pakistan?

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 09 Mar 2018 18:40

IMF concerned at Pakistan’s weakening economy

In its first post-programme monitoring (PPM) after the completion of fund programme in September last year, the IMF board also raised questions over the medium-term debt sustainability and called for additional revenue measures and containing expenditures.
The board expressed its anxiety :shock: over the deteriorating assessment that the country’s fiscal deficit was set to hit 5.5 per cent of GDP — almost Rs505bn or 1.4pc — higher than 4.1pc budgeted by the government and current account deficit to touch 4.8pc of GDP with the economic growth rate staying conservative at 5.6pc instead of budgeted 6pc.
Against the backdrop of rising external and fiscal financing needs and declining reserves, “risks to Pakistan’s medium-term capacity to repay the Fund have increased since completion of the EFF arrangement in September 2016”.
In the aftermath of recent setback at the Financial Action Task Force, the IMF board called for further enhancing anti-money laundering/counter-terror financing regime and strengthening the fiscal federalism and monetary and financial policy frameworks.


https://www.dawn.com/news/1393806/imf-c ... ng-economy

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Re: Pakistani Economic Stress Watch

Postby arun » 16 Mar 2018 11:02

The International Monetary Fund (IMF) discloses that the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan’s Net International Reserves (NIR) are negative.

Pakistan's 'net reserves stand at minus $724m' :

Express Tribune

In a disclosure that could jolt the country’s financial markets, the International Monetary Fund (IMF) has said Pakistan’s net international reserves after excluding its foreign exchange liabilities are negative $724 million.

In its first Post Programme Monitoring report, the global lender has exposed the shallowness of the current gross official $12.1 billion reserves, which are largely maintained by double booking of reserves and taking Chinese deposits under the currency swap arrangements.

As of February 14, Pakistan’s Net International Reserves stood at minus $724 million – down from $7.5 billion in September 2016 when the three-year IMF programme had ended, according to the IMF report released on Thursday.



The relevant extract stating that the Net International Reserves (NIR) of the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan is negative from the referred to IMF report follows:

Maintaining a largely stable nominal exchange rate amid mounting external pressures has led to losses of international reserves. Despite significant external borrowing by the government, including several syndicated bank loans and an international sukuk and Eurobond issuance of $2.5 billion, gross reserves of the State Bank of Pakistan (SBP) declined from $18.5 billion at the end of the EFF to $12.8 billion in mid-February 2018—equivalent to 2.3 months of prospective imports, or 50 percent the IMF’s reserve adequacy (ARA-EM) metric. Alongside, the SBP's net short derivative position has doubled to $5.4 billion, bringing net international reserves (NIR) down from $7.5 billion to an estimated negative $0.7 billion over the same period.


The link to the IMF report follows {See Page marked 5 / Page 9 of attachment} :

Pakistan : First Post-Program Monitoring Discussions-Press Release; Staff Report; and Statement by the Executive Director for Pakistan

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 17 Mar 2018 19:56

No Cigar! Baki proposal for unilateral concessions was shot down.

China FTA nearly done

Pakistan and China have agreed to offer zero per cent duty on 70pc tariff lines to each other under the revised Free Trade Agreement, a move that is expected to add to increasing imbalance in bilateral trade and revenue loss.
The attempt to seek unilateral concessions did not materialise as China is unwilling to open its market unilaterally for Islamabad and wants similar concessions from Pakistan.
The move will further deprive Pakistan from customs duty collections.
The present move to further exempt duty on imports may double the revenue loss to the country which is struggling to control the residing budget deficit.
The negotiations were led by Secretary Commerce Younus Dagha.
Imports from China have surged by 380pc to $12bn from $2.5bn, while Pakistan’s exports have increased by 195pc to $1.7bn from $570 million.


https://www.dawn.com/news/1395739/china-fta-nearly-done

Per one wit:

Scientist
about 10 hours ago
Now, Pakistani's will be pushed to "deeper" unemployment. Literally, Pakistan has nothing to export to China other than few mangos. With this FTA done Pakistan is stand to loose as Chinese goods will flood to every nook and corner of the country. Resulting in unemployment and as a result security as well. There is no one in the world right now that can match Chinese manufacturing might... so Good Luck!!

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Re: Pakistani Economic Stress Watch

Postby Vips » 18 Mar 2018 00:04

anupmisra wrote:
The attempt to seek unilateral concessions did not materialise as China is unwilling to open its market unilaterally for Islamabad and wants similar concessions from Pakistan.


Tallel then TFTA, Deepel then Gubo, Sweeter then Ajinomoto :rotfl: :rotfl: :rotfl:

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Re: Pakistani Economic Stress Watch

Postby arun » 19 Mar 2018 11:31

Pakistan all set to seek $2 bn from friendly country :

As per the arrangement being negotiated with a friendly country, a trusted friend of Pakistan has assured of depositing about $2 billion in its account as safe deposit as was done in 2000. It means that this amount will reflect in Pakistan’s account to keep its image positive but Pakistan will not be able to use this amount, sources confided.



After the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan is served with the grey list FATFa, if this deal is still on, India must persuade FATF to look very closely at this deal. That course of action is suggested as I see no logical reason why any country would need to resort to such a convoluted method to lending money to another country leading me to believe that all this business about secret Momin Ummah Brother lender is a burqa for hiding fact that this money is likely from a source of dubious antecedents such as heroin narco-traffickers or hawala operators that the Mohammadden Terrorism Fomenting Islamic Republic of Pakistan is well endowed with.

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Re: Pakistani Economic Stress Watch

Postby ashish raval » 19 Mar 2018 12:27

anupmisra wrote:No Cigar! Baki proposal for unilateral concessions was shot down.

China FTA nearly done

Pakistan and China have agreed to offer zero per cent duty on 70pc tariff lines to each other under the revised Free Trade Agreement, a move that is expected to add to increasing imbalance in bilateral trade and revenue loss.
The attempt to seek unilateral concessions did not materialise as China is unwilling to open its market unilaterally for Islamabad and wants similar concessions from Pakistan.
The move will further deprive Pakistan from customs duty collections.
The present move to further exempt duty on imports may double the revenue loss to the country which is struggling to control the residing budget deficit.
The negotiations were led by Secretary Commerce Younus Dagha.
Imports from China have surged by 380pc to $12bn from $2.5bn, while Pakistan’s exports have increased by 195pc to $1.7bn from $570 million.


https://www.dawn.com/news/1395739/china-fta-nearly-done

Per one wit:

Scientist
about 10 hours ago
Now, Pakistani's will be pushed to "deeper" unemployment. Literally, Pakistan has nothing to export to China other than few mangos. With this FTA done Pakistan is stand to loose as Chinese goods will flood to every nook and corner of the country. Resulting in unemployment and as a result security as well. There is no one in the world right now that can match Chinese manufacturing might... so Good Luck!!


India must urgently review its impact on MFN status to pukes and whether it will result in flooding Indian market via pukes!!

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Re: Pakistani Economic Stress Watch

Postby Peregrine » 19 Mar 2018 16:19

anupmisra wrote:No Cigar! Baki proposal for unilateral concessions was shot down.

China FTA nearly done

https://www.dawn.com/news/1395739/china-fta-nearly-done
Per one wit:

Scientist
about 10 hours ago
Now, Pakistani's will be pushed to "deeper" unemployment. Literally, Pakistan has nothing to export to China other than few mangos. With this FTA done Pakistan is stand to loose as Chinese goods will flood to every nook and corner of the country. Resulting in unemployment and as a result security as well. There is no one in the world right now that can match Chinese manufacturing might... so Good Luck!!
ashish raval wrote:India must urgently review its impact on MFN status to pukes and whether it will result in flooding Indian market via pukes!!
ashish raval Ji:

GOLDEN CHANCE FOR INDIA - IMMEDIATELY WITHDRAW M F N Status given to Terroristan!

No ""IFS" NO "BUTS"!

Cheers Image

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Re: Pakistani Economic Stress Watch

Postby chetak » 19 Mar 2018 16:39

Peregrine wrote:
anupmisra wrote:No Cigar! Baki proposal for unilateral concessions was shot down.

China FTA nearly done

https://www.dawn.com/news/1395739/china-fta-nearly-done
Per one wit:

Scientist
about 10 hours ago
Now, Pakistani's will be pushed to "deeper" unemployment. Literally, Pakistan has nothing to export to China other than few mangos. With this FTA done Pakistan is stand to loose as Chinese goods will flood to every nook and corner of the country. Resulting in unemployment and as a result security as well. There is no one in the world right now that can match Chinese manufacturing might... so Good Luck!!
ashish raval wrote:India must urgently review its impact on MFN status to pukes and whether it will result in flooding Indian market via pukes!!
ashish raval Ji:

GOLDEN CHANCE FOR INDIA - IMMEDIATELY WITHDRAW M F N Status given to Terroristan!

No ""IFS" NO "BUTS"!

Cheers Image


Sirji,

leave the MFN status be.

India is not foolish to allow one way MFN status even for zardari's grandpop.

It's just a convenient stick to beat the pakis with, and practically, for the pakis, India's MFN to them is worthless.

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Re: Pakistani Economic Stress Watch

Postby chetak » 19 Mar 2018 16:44

Vips wrote:
anupmisra wrote:


Tallel then TFTA, Deepel then Gubo, Sweeter then Ajinomoto :rotfl: :rotfl: :rotfl:


Not only that, the hans are very excited because cheeni Ajinomoto often makes the paki heart beat faster :)

to paraphrase some forgotten american, the cheeni says to the paki

" is that a bottle of ajinimoto in your pocket or are you just glad to see me "??

Rhythm abnormalities like atrial fibrillation, supraventricular tachyarrhythmia and ventricular tachycardia have been associated with MSG (Ajinomoto).

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 19 Mar 2018 17:08

Now the IMF is against SeePack! It must be 1000% Yahoodi/Hanoodi/Amriki saazish.

Analysis: IMF paints a sombre picture of economy

The tenor of the report is clearly very negative and pessimistic about the future prospects for the economy up to 2022-23.
The most significant disappointments have been:

(a) the complete lack of focus on addressing the decline in exports;
(b) excessive external borrowings to artificially build up foreign exchange reserves;
(c) a continuing narrow tax base;
(d) weak and faulty debt management;
(e) failure to check the steady accumulation in losses of public sector enterprises (PSEs); and
(f) the rise in circular debt in the power sector to almost one trillion (growing by almost Rs 550 billion during the tenure of this government), without accounting for the growing circular debt in the gas sector.
(i) As of last month, the report makes a startling disclosure that net international reserves have already become negative, as compared to a positive $7.5 billion in September.
(ii) The report projects that gross foreign exchange reserves will fall from $16.1 billion to $12.1 billion by the end of 2017-18.
The report does highlight that if the external financing requirements for the remainder of the year are not realised, gross foreign exchange reserves could fall to $9.4 billion by the end of 2017-18, barely 50 per cent of the benchmark for sustainability of four months cover.
If the shortfall persists, reserves could be as low as $7.1 billion by end-June 2023.
These views are in sharp contrast to the IMF recommendations and continue to focus, perhaps obliviously, on taking the economy to a higher growth trajectory of six per cent or more.
Now, with this report, Pakistan’s access to international capital markets (the maturity periods of potential commercial borrowings or rollover of swaps will get shorter and the terms and interest rates more stringent) and to concessional financing from multilaterals and bilaterals will be greatly diminished.


Bhat to do, hain?

First, in the report the fund clearly states that the CPEC should be slowed down so that buildup of external liabilities remains more manageable.
Second, possibly under pressure from the largest member of the IMF Executive Board, a kind of ‘doomsday’ picture of the near future has been presented so that the authorities rush back to the Fund as soon as possible for support.
For example, the report already presents a scenario in which the value of the rupee is adjusted downwards by 30 per cent in 2018 to ward off the possibility of a sudden crumbling of reserves due to prevailing conditions.


Clearly, pajistan needs a strong-willed, thrice-married TFTA leader, who, backed by the assorted djinns and the sisterhood of peernis, will stand up to this global saazish, reach into his (and, preferably, his ex-father in law's) pocket and bail the paki nation out of this mess. Who would that be, that who has been pre-ordained by the natural forces of nature, will lead the nation of 220 million versatile bakis to safe grounds after parting the proverbial seas of destitution, despair and dejection?

https://www.dawn.com/news/1396195/analy ... of-economy

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 19 Mar 2018 17:16

Sialkoti and La Whori statisticians at it again. Relying on hope (and a prayer) again.

Wheat crop promising, but obstacles remain

Pakistan looks set to come closer to this year’s output target of about 26.5 million tonnes despite water shortages and a slight decrease in the area under cultivation. :shock:
The Federal Committee on Agriculture (FCA) set the wheat output target at 26.464m tonnes for the crop year 2017-18, projecting sowing of the crop over an area of 8.945m hectares (around 22m acres) and targeting an average yield of 2958.6kg per hectare.
Growers and officials hope that a generally favourable weather and a modest gain in national average per-hectare yield can offset any productivity loss owing to the above-listed factors.
Some officials and growers’ lobby groups are sceptical about meeting the target amid insufficient supply of irrigation water.
During this wheat-growing season, irrigation water supplies have so far remained insufficient, not only in Sindh but also in Punjab.
So, there are chances that the wheat target may be missed, more so because sowing took place on a little less-than-targeted area of land
Some officials of Sindh and Punjab agriculture departments also share their concerns about meeting the provincial wheat production targets.
Officials of the Punjab irrigation department say water supply shortages that were initially estimated at around 36pc rose beyond that level towards the end of February and lasted till March 10. That, they fear, can adversely affect the standing wheat crops both in central and southern Punjab.
All eyes are set on Punjab where any slippage in the output target could upset the country’s overall production


https://www.dawn.com/news/1396088/wheat ... les-remain

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Re: Pakistani Economic Stress Watch

Postby anupmisra » 19 Mar 2018 17:24

Going against the IMF recommendations...bakistan turns to begging again.

Pakistan all set to seek $2 bn from friendly country

With the general elections looming and the federal budget on the anvil, the government is all set to knock at the doors of friendly countries to rattle up two to three billion US dollars to meet international obligations, The News learnt.
As per the arrangement being negotiated with a friendly country, a trusted friend of Pakistan has assured of depositing about $2 billion in its account as safe deposit as was done in 2000. It means that this amount will reflect in Pakistan’s account to keep its image positive but Pakistan will not be able to use this amount, sources confided.
Negotiations with the brotherly Muslim country having a generous attitude towards Pakistan in the past are also under way
At that time, the brotherly country had requested not to make this arrangement public but Pakistan’s then secretary finance had immediately informed the US about this arrangement
Prime Minister’s Adviser on Finance Miftah Ismail, along with Prime Minister Shahid Khaqan, visited the Muslim country. Later on, officials of Finance Ministry also visited this country where negotiations went ahead smoothly. Before these tours, the COAS Qamar Bajwa had also visited this country.


After all, why would a biratherly malsic country deny the bakis what is justifiably theirs to begin with? Thanks be to allah, bakistan is an atami taakat which provides a nooklear shield to all those who are willing to pay! Nooklear bums for hire.

https://www.thenews.com.pk/print/294142 ... ly-country

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Re: Pakistani Economic Stress Watch

Postby Peregrine » 19 Mar 2018 22:44

Vips wrote:Tallel then TFTA, Deepel then Gubo, Sweeter then Ajinomoto :rotfl: :rotfl: :rotfl:
chetak wrote:Not only that, the hans are very excited because cheeni Ajinomoto often makes the paki heart beat faster :)
to paraphrase some forgotten american, the cheeni says to the paki

" is that a bottle of ajinimoto in your pocket or are you just glad to see me "??

Rhythm abnormalities like atrial fibrillation, supraventricular tachyarrhythmia and ventricular tachycardia have been associated with MSG (Ajinomoto).
chetak Ji :

Following received from Ajinomoto Co. Inc. Head Office, 15-1, Kyobashi 1-chome, Chuo-ku, Tokyo 104-8315 :

Q U O T E

Prease pass forrowing message to Chetak San,

Dear Chetak San,

Prease note that Ajinomoto is most definitery not a Chinese Product but is Made in Japan where our Group has been Making and supprying this product since 1907.

We understand that a country named Pakistan and its Peopre are carring Ajinomoto as "Chinese Sart".

We have very good rerations with India and we would not rike to have any probrems with you. Pakistan is a different entity and we wirr dear with them rater.

Prease do not use the Term "Chinese Sart" for our Worrd Known product "Ajinomoto".

Domo, Domo Arigato Gozimashita.

U N Q O T E

Would request you to kindly comply with the above request otherwise it might lead to Honourable Hara Kiri by the Honourable Japanese Members of Ajinomoto Inc.

Cheers Image

chetak
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Re: Pakistani Economic Stress Watch

Postby chetak » 19 Mar 2018 23:08

Peregrine wrote:
Vips wrote:Tallel then TFTA, Deepel then Gubo, Sweeter then Ajinomoto :rotfl: :rotfl: :rotfl:
chetak wrote:Not only that, the hans are very excited because cheeni Ajinomoto often makes the paki heart beat faster :)
to paraphrase some forgotten american, the cheeni says to the paki

" is that a bottle of ajinimoto in your pocket or are you just glad to see me "??

Rhythm abnormalities like atrial fibrillation, supraventricular tachyarrhythmia and ventricular tachycardia have been associated with MSG (Ajinomoto).
chetak Ji :

Following received from Ajinomoto Co. Inc. Head Office, 15-1, Kyobashi 1-chome, Chuo-ku, Tokyo 104-8315 :

Q U O T E

Prease pass forrowing message to Chetak San,

Dear Chetak San,

Prease note that Ajinomoto is most definitery not a Chinese Product but is Made in Japan where our Group has been Making and supprying this product since 1907.

We understand that a country named Pakistan and its Peopre are carring Ajinomoto as "Chinese Sart".

We have very good rerations with India and we would not rike to have any probrems with you. Pakistan is a different entity and we wirr dear with them rater.

Prease do not use the Term "Chinese Sart" for our Worrd Known product "Ajinomoto".

Domo, Domo Arigato Gozimashita.

U N Q O T E

Would request you to kindly comply with the above request otherwise it might lead to Honourable Hara Kiri by the Honourable Japanese Members of Ajinomoto Inc.

Cheers Image


Got it saar. Much obliged. :)

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Pakistani Economic Stress Watch

Postby Peregrine » 20 Mar 2018 00:54

X Posted on the Terroristan Thread

Slowdown in Chinese funding requires urgent attention - Ihtashamul Haque

SLAMABAD: A slowdown in Chinese funding could delay bigger China-Pakistan Economic Corridor (CPEC) development projects and the matter requires urgent attention of the government.

On the other hand, the International Monetary Fund (IMF) executive board’s first post-programme monitoring report has cast serious doubt about Pakistan’s repayment capacity, considering the fast depleting foreign exchange reserves.

Both issues require critical assessment of the situation in order to take immediate decisions with a view to reducing growing economic vulnerabilities.

More importantly, the declining foreign exchange reserves, insiders say, will go down from $12.3 billion to $10 billion by June this year, not sufficient to cover the necessary two months of imports.

The government does not seem to be interested in starting dialogue with the IMF to seek an urgent bailout package to avoid default. Likewise, the caretaker government, it is said, would have no appropriate mandate to seek urgent financing from the IMF.

China, UNDP sign $4m agreement to help FATA, Balochistan

Therefore, there is confusion at the top level on how to deal with the current economic meltdown that has intensified due to continued widening of the current account deficit.

China has surprisingly slowed down its assistance over which experts have voiced their concern. CPEC-related projects, in the first six months of the current fiscal year, have received $506 million in Chinese funding compared to $848 million in the same period of 2016-17.

“There is a 40% drop in Chinese funding and this is something very alarming,” said a former finance minister. He suggested that the funding should have reached its peak to aptly complete highway and Gwadar-related development projects.

The slowdown in China’s CPEC-related funding is believed to have caused an 18% reduction in the import of power generation machinery. Why the Chinese are putting less money into the CPEC projects?

Interior Minister Ahsan Iqbal, who still looks after CPEC projects, is usually blamed for not taking up the issue with the Chinese. He seems to be more preoccupied with the political fire-fighting to appease the PML-N leadership due to which his own ministry is said to be suffering.

It is not ironic that while these projects could face delays and hardships due to the decrease in Chinese funding, Prime Minister Shahid Khaqan Abbasi is offering six approved routes to members of the Shanghai Cooperation Organisation (SCO) to help enhance its vitality to become a conduit for linking the Eurasian landmass – China, Russia and Central Asia with the Arabian Sea.

Favourable outlook at risk

The IMF monitoring report believes that continued erosion of Pakistan’s macroeconomic resilience could put the near-term favourable outlook at risk. Surging imports have led to the widening current account deficit and a significant decline in international reserves, despite higher external financing, it said.

China dominates Pakistan’s FDI figures, Norway pulls out

“Against the backdrop of rising external and fiscal financing needs and the declining reserves, risks to Pakistan’s medium-term capacity to repay the fund have increased since completion of the Extended Fund Facility (EFF) in September 2016,” said the IMF board of directors.

This has happened for the first time that the IMF has expressed its concern over Pakistan’s ability to pay off its $6.4-billion loan whose payment will start from June this year. Pakistan will have to return $450 million and $800 million by early next year and later $1 billion.

All this is happening when Pakistan is already facing $8-billion financing gap which is feared to reach $10 billion by June this year.

Pakistan is largely seen as facing new troubles and since the government is not taking any decision to contact or not to contact the IMF for any emergency assistance, the World Bank, the Asian Development Bank (ADB) and the Islamic Development Bank (IDB) are not expected to offer their usual annual assistance.

All the three international financial institutions (IFIs) provide close to $4 billion in annual assistance to Pakistan which also includes short-term Islamic financing for oil imports by the IDB through US-influenced commercial banks in Bahrain. These three banks offer low-cost concessionary loans to Pakistan, but this time around their funding has become difficult due to the IMF, whose go-ahead is necessary.

They have already cut their assistance for the current fiscal year and who knows how they would deal with Islamabad in the absence of any bailout package from the IMF?

However, the government has found an easy way to seek expensive commercial loans from Chinese banks as others are a little hesitant, considering the current weak economic condition of Pakistan.

Exchange rate

IMF officials are happy with Pakistan’s long-awaited move to allow some better exchange rate adjustment, but they are still seeking greater exchange rate flexibility on a more permanent basis to preserve external buffers and improve competitiveness.

In fact, the IMF wants 23% devaluation of the rupee to improve its competitiveness and support Pakistani exporters. Adviser on Finance Miftah Ismail said the other day that the government would be reimbursing a maximum portion of over Rs200 billion worth of sales tax refund claims to the exporters and that an incentive package is under way to help the exporters increase their declining exports. Will this happen?

Pakistan borrows another $500m from Chinese bank

Overall, The country’s economy continues to slide downwards and who knows the economic mismanagement, especially by the previous PPP and now PML-N governments, is the major cause of the current mess. Questions are being asked what the government is leaving behind after completing its five-year term.

Public debt surged to over Rs22 trillion in 2016-17 from Rs13.3 trillion in 2012-13, adding Rs7.5 trillion only in four years. It has added Rs657 billion in just three months of the current fiscal year.

Latest SBP Report - Q2FY18P Pakistan's Debt and Liabilities Profile Provisional (In Billion Rupees)
Pakistan's Total Debt and Liabilities : 26,814.7 i.e. 26.817 TRILLION

The government is said to be adding another Rs2.5 trillion of public debt before the elections due this year. Total debt will stand at a whopping Rs25 trillion which means close to 69% of GDP. It is already Pak Rupees 16.817 Trillion. I reckon at on June 2018 it should surely be more than Pak Rupees 28.5 Trillion!

Foreign debt and liabilities increased from $61 billion in 2012-13 to $89 billion by the end of December last year. They are feared to be reaching $96 billion by end-June 2018. The government is accused of adding $35 billion to the external debt. It would have added another $55 billion had there been no unprecedented decline in international oil prices.

The current account deficit rose to $12.4 billion or 4.1% of GDP in 2016-17 and it is anticipated to be deteriorating to $18 billion or 5.3% of GDP by the time the current fiscal year ends on June 30 this year.

Foreign exchange reserves continue to decline and the plan of floating new bonds has been delayed for some time because of being very expensive.

The changing economic scenario is getting bleaker and bleaker with the government only concerned about its own political survival and benefiting its cronies. The latest is the announcement of Ali Siddiqui – the son of Jahangir Siddiqui – to become Pakistan’s Ambassador to the United States.

He has no experience and has been appointed because of alleged business relations with the rulers and a media group that is involved in the bashing of credible state institutions.

The writer is the recipient of four national APNS awards and four international awards for journalism

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nam
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Joined: 05 Jan 2017 20:48

Re: Pakistani Economic Stress Watch

Postby nam » 20 Mar 2018 01:19

Peregrine wrote:
It is not ironic that while these projects could face delays and hardships due to the decrease in Chinese funding, Prime Minister Shahid Khaqan Abbasi is offering six approved routes to members of the Shanghai Cooperation Organisation (SCO) to help enhance its vitality to become a conduit for linking the Eurasian landmass – China, Russia and Central Asia with the Arabian Sea.



The Pakis are so delusioned. They will provide a conduit to Arabian sea. To do what? dump goods in to the sea? Why would Russia even send goods in to China then through CPEC.. to Arabian sea? when it can use North South Corridor through Iran, if required. No one is sending through Afghanistan.

The Chinese are themselves using Russia to send goods to Europe through train. Oh.. the stupid Paks. :rotfl:


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