Pakistani Economic Stress Watch

[vimal]

https://twitter.com/imtiazmadmood/statu ... dr45xHwu3g

IMF on hearing Quran verse panicked and left hurriedly in panic when they heard Allah hu Akbar part of of the verse thinking Ishaq Dar is going to blow himself up.

[vimal]

Pakistan PM Shehbaz left for Turkey to extend support & solidarity following the recent earthquake in Turkey

He was accompanied by his entire cabinet Bilawal Bhutto, Ishaq Dar, Econ Min Sardar Ayyaz Sadiq, Law min Azam Nazeer Tarrar, SAPM Attaullah Tarrar & SAPM Tariq Fatemi

https://twitter.com/osinttv/status/1626 ... dr45xHwu3g

[nachiket]

IMF on hearing Quran verse panicked and left hurriedly in panic when they heard Allah hu Akbar part of of the verse thinking Ishaq Dar is going to blow himself up.

This is no laughing matter. The IMF team had probably seen Dar saab gobble up several bowls of pindi chana during lunch. By teatime he would have been ready to cause a huge gas explosion equivalent to several tonnes of TNT.

[Manish_P]

<Deleted - wrong thread>

[Dilbu]

This is an echaandee compliant headline onlee. There is no real reduction in debt.
External public debt falls by $4.7b

ISLAMABAD: Pakistan’s external public debt shrank by $4.7 billion in the past one year and stood at $97.5 billion primarily due to the decision of foreign commercial banks not to roll over their maturing debt – a gain that did not translate into any real benefit due to steep currency devaluation.

Despite the reduction in the external public debt in dollar terms in the last calendar year, the government’s external debt jumped from Rs14.8 trillion to Rs17.9 trillion, according to the State Bank of Pakistan (SBP). There was an increase of Rs3.1 trillion in rupee terms, thanks to 28.3% currency devaluation.

According to the figures released by the central bank on Thursday, the external public debt decreased in one year from $102.2 billion to $97.5 billion by December 2022.

The reduction did not come because of any increase in the country’s income. Rather the amount was paid out of the gross foreign exchange reserves that dipped by $12.1 billion, or 68%, in the last calendar year.

The official foreign exchange reserves were $17.8 billion in December 2021, which dipped to $5.7 billion by the end of December 2022. The figures released by the central bank showed that the reserves have further depleted to $3.2 billion.

Foreign commercial loans that stood at $10.2 billion a year ago decreased to $6.9 billion, according to the SBP. Chinese and non-Chinese commercial banks have been withdrawing their financing facilities since Pakistan could not timely secure a deal with the IMF.

Total external debt and liabilities also decreased to $126.4 billion as of December 2022.

Overall, Pakistan’s debt and liabilities peaked, by an unsustainable 23.5%, to Rs63.9 trillion at the end of December 2022, massively increasing the cost of debt servicing.

According to the SBP, the total liabilities of the country, mainly government debt, surged by Rs12.1 trillion, or 23.7%, compared to a year ago.

[Dilbu]

This is the ground reality.
Lifestyle recalibration

JAVED, who works as a driver, told me that till 2017-2018, he was able to manage his household expenses on his salary alone. Since then, it has been impossible. He had to ask his son, who was in high school, to leave his studies and take up a job. Javed said that even now, with two incomes, household expenses are getting harder to manage. His only option, other than asking his employer for a raise and telling his son to do the same thing, was to take his elder daughter out of high school and see if she, too, could get a job.

For people who cannot move out of the country, who don’t have diverse income streams or foreign currency-denominated income stre­a­­ms, and who don’t possess savings in instruments that stay ahead of inflation (in gold or dollars), the tough times will get even tougher. Standards of living will have to come down substantially. And this will remain the case for the majority of people in the country for many years to come.

For most people up to upper-middle-income levels, there will need to be substantial recalibration in expenses. Essentials will have to be prioritised and a lot of, or all non-essentials will have to be cut. Some people might be able to take on additional work in the form of evening jobs or working overtime, but this is unlikely to be the case for most people.

Real incomes have fallen drastically over the last few years and the trends are going to continue for some years to come. People must realise their standards of living have declined and will decline further. With the same money they have been earning, they cannot maintain the lives they did some years back. The only way to maintain standards would be to have more income. Some will be able to do so by going abroad, taking on more work or having more family members join the labour market. For most, these options are not going to be available and will not work. For them recalibrating expenditures and lifestyles to the greatest extent possible will be the only option. The people of Pakistan will continue to pay a heavy price for the mess we are in.

[Manish_P]

This is the ground reality.
Lifestyle recalibration
...

Sir, the anal-cyst has explored a possible solution in his article...

The best way, of course, would be for people to create more income streams, especially, foreign currency-denominated ones. But this is not easy. How many people will be able to leave Pakistan to work in the Middle East or elsewhere, or migrate to other countries? The numbers over the next few years will at best be a few million.

Maybe if they do it with the kitaab in one hand and the quarter kilo A-bomb in the other...

[vimal]

Will you guys stop this nonstop chit chat against a certified islami atami takaat . They will eat grass but make bum

[Vayutuvan]

@vimal jee, is evening job an euphemism for, you know, mujra and ahem ahem?

[Vayutuvan]

Nubile wemmens are luckier. They can get kanaadian vizzas 400% guarantee. But abduls are stuck with khushboos.

[Neela]

This is the ground reality.
Lifestyle recalibration
...

Sir, the anal-cyst has explored a possible solution in his article...

The best way, of course, would be for people to create more income streams, especially, foreign currency-denominated ones. But this is not easy. How many people will be able to leave Pakistan to work in the Middle East or elsewhere, or migrate to other countries? The numbers over the next few years will at best be a few million.

Maybe if they do it with the kitaab in one hand and the quarter kilo A-bomb in the other...

Lifestyle recalbration is a fancy way of saying things.
there will be no jobs. Raw material for industries are stuck at ports. When you cant pay for it, the message reaches other shipping companies and they wont even start from the port of departure. Few weeks down the line, expect massive layoffs on an unprecedented scale. When you cant make anything, the Labour engaged in manufacturing - Poof ! Gone. Whats the point in having accountants, marketing, finance teams then? Poof!! Gone!

Purebreed single-income families where the women are put in black condoms and not allowed to work - they are finished!
This at a time when cooking gas, petrol, essential commodities prices have all soared.
Where are they going to get any income?

Enjoyed warm fuzzy feeling in me when I saw the news that a large Paki delegation is headed for Turkey at this time economic collapse. You see, it reiterates the "smash and grab and run while you can mentality" of the ruling class .

The IMF kicker for the first tranche of $1.1B has a clause "declare asset details of all civil servants and army officers "

Now , take time to think about this. With their typical Paki bluster , each side, political, babus and army is going to say "who the f**k are you to ask me that" . My humble advice to the Pak army is start polishing your guns.
----------
I do hope this time my dream materializes - Somalia style warlords manning different areas. I want to see despair , hopelessness and the pits of human depravity unleashed on these scum!

--------------

Mentioned this once before a long time ago in this forum. It left a permanent psychological impact on me.
During the 1971 war, the brave Pakis targetted Hindu women specifically. Bangladesh was extremely poor and generally there isnt anything these folk could do but to yield. As millions of refugees headed into India to escape the evil , those women who fell pregnant ran into the hands of Missionaries of charity in Kolkata and thereabouts. These women wanted to abort but the death cult prevented them from doing so, applying Christian values to those who have endured trauma.
Imagine your family having to endure any of this ? Getting no solace anywhere and having to deal with immense choices while seeking food and shelter. I break into a sweat just thinking about the helplessness these naive women had to endure. What did we do to anyone to deserve this ? This isnt going away for me. But I want the entire race that supported this act to endure a slow, gnawing, losing.the.will.to.live pain in ultra slow motion. I want to see and feast on that!

[Neela]

CA Goverdhan Damani
@GoverdhanDamani
·
Feb 15
Now, only 6 countries are graded below Pakistan as RD (Restricted Default)

[Neela]

Nepal Correspondence
@NepCorres
https://twitter.com/NepCorres/status/16 ... 3502729216
Feb 16

Upcoming Turmoil expected in #Rawalpindi, Pakistan. Baltistanis have shown clear intentions of reunification with #India. Balti leader Md. Ghulam Ashoor, a representative of the Balti Association makes a powerful statement. Frames #Pakistan beyond #Shame

Mentioned this earlier too ...breakaways will accelerate. The economic climate has no chance of recovery in years. And that is too long to for many.

[Manish_P]

...
there will be no jobs. Raw material for industries are stuck at ports. When you cant pay for it, the message reaches other shipping companies and they wont even start from the port of departure. Few weeks down the line, expect massive layoffs on an unprecedented scale. When you cant make anything, the Labour engaged in manufacturing - Poof ! Gone. Whats the point in having accountants, marketing, finance teams then? Poof!! Gone!

....

Your phrase 'Poof!gone' phonetically sounds like 'Pakistan'.. i like it

[yensoy]

Lifestyle recalbration is a fancy way of saying things. there will be no jobs. !

It's worse than that. It's like they are eating the seed grain. Every kid that is pulled out of school to support the family is one person less educated and less able to thrive in a modern workforce. In India we have lakhs of kids from lower middle class and poorer families struggle and make their way up the social ladder purely because of education - whether it is through the military, IAS or other services, private industry, professions, skilled blue-collar or business. If that mobility goes, it is very sad for the population. As much as I might feel for the poor kids being denied an education, it doesn't matter if their own feudal lords don't feel the pain, which they probably won't. It is indeed an "don't have bread eat cake" mindset among the Tim Hortons clientele.

[Dilbu]

The mangoes should bring out guillotines just like in French revolution to deal with the RAPEs. They well and truly deserve it.

[Manish_P]

The mangoes should bring out guillotines just like in French revolution to deal with the RAPEs. They well and truly deserve it.

They don't need them, Dilbu ji. Most would have meat cleavers & butcher knives at home. And they would be eager supporters of D-I-Y 'sar tan se juda'.

[Manish_P]

So here is the deadline...

Yawn - NA session on finance bill adjourned without vote

A session of the National Assembly to discuss the Finance (Supplementary) Bill, 2023, generally known as the mini-budget, was adjourned on Friday without a vote on the crucial tax amendments necessary for reviving a stalled International Monetary Fund (IMF) programme and averting the threat of default.

Two measures — raising the federal excise duty (FED) on cigarettes and increasing the general sales tax (GST) rate from 17 per cent to 18pc — have already been implemented through SROs. The Federal Board of Revenue (FBR) expects to generate Rs115bn from these two measures.

The finance bill proposes the following:

GST to be increased from 17pc to 18pc; GST on luxury items to increase to 25pc
On first class and business class air tickets, federal excise duty of 20pc of the airfare or Rs50,000, whichever is higher
10pc withholding adjustable advance tax on the bills of wedding halls
Increase in FED on cigarettes, and aerated and sugary drinks
Increase in FED on cement from Rs1.5 to Rs2 per kg
Benazir Income Support Programme budget increased to Rs400bn from Rs360bn

The finance bill also proposes increasing GST from 17pc to 25pc on 33 categories of goods covering 860 tariff lines — including high-end mobile phones, imported food, decoration items, and other luxury goods. However, this raise will be notified through another notification.

(more notifications)
....

These measures proposed through the finance bill are in addition to earlier steps agreed upon with the IMF, including increasing electricity and gas rates and allowing a free-floating exchange rate.

The IMF has given a deadline of March 1 for the implementation of all these measures.

[Deans]

But I always thought the the proportion of private car owners in Pak was much less than India - even during our 'garibi hatao' times. Feudal setup since birth would have meant the Pakis having a much more skewed composition of rich::middle class::poor than us even in those times.

Yes. Per capita ownership of cars in India is approx. double of Pak.
Agriculture forms 16% of India's GDP, but 25% of Pakistans. Higher diesel prices for agriculture hurt a larger proportion of Pakistanis.
India has more cars per capita, but public transport is also better developed, so my sense is fuel as a % of income in urban India is lower.

[Manish_P]

...
India has more cars per capita, but public transport is also better developed, so my sense is fuel as a % of income in urban India is lower.

I am not exactly sure sir, but I faintly remember Shiv ji had researched the earning:fuel cost:vehicle ownership comparison of Pak vs Ind, over the decades.

IIRC It was skewed in favor of the bakis till the 90s. Maybe due to artificially inflated PKR, ummah discount, subsidies etc.

They were also more fixated and harping of building roadways highways (a scam eventually) over railways to serve the elite rather than mango abduls.

I still remember the snide, snarky RAPEists and their apologists here (as in india, not brf) crowing about how the Americans would help them build world class roadways - along the lines of NATO compatibility

In India, car ownership grew exponentially after liberalization, despite corresponding improvements in public transport. Easy loans, local assembly all helped.

In pakistan that never happened

So now it is a very different picture.

[Raman]

CA Goverdhan Damani
@GoverdhanDamani
·
Feb 15
Now, only 6 countries are graded below Pakistan as RD (Restricted Default)

Pakistan rupee has several more levels/grades: quilted, double ply, single ply, etc.

[vimal]

Serious question to all the zaahil kuffars, is grass halal? Is it ok to eat grass for atami taqat.

[Avid]

But I always thought the the proportion of private car owners in Pak was much less than India - even during our 'garibi hatao' times. Feudal setup since birth would have meant the Pakis having a much more skewed composition of rich::middle class::poor than us even in those times.

Yes. Per capita ownership of cars in India is approx. double of Pak.
Agriculture forms 16% of India's GDP, but 25% of Pakistans. Higher diesel prices for agriculture hurt a larger proportion of Pakistanis.
India has more cars per capita, but public transport is also better developed, so my sense is fuel as a % of income in urban India is lower.

A good resource (and a rabbit hole) to look at broad range of economic data and indicators.

Here are two related to your points:

CPI-Transportation
https://tradingeconomics.com/pakistan/c ... sportation

CPI-Housing Utilities
https://tradingeconomics.com/pakistan/c ... -utilities

[Avid]

India - CPI over last 10 years


In context -- India GDP per capita PPP


Pakistan CPI over last 10


In context -- Pakistan GDP per capita PPP

[Deans]

@vimal jee, is evening job an euphemism for, you know, mujra and ahem ahem?

This can actually be tracked. The price of an escort in Lahore is now lower than Delhi (similar looks and education). It used to be higher than Delhi,which is understandable, given Pakistan's more conservative society (which means cops have to be bribed in Pak, increasing the price).

If an upscale escort in New Delhi quotes IRs 20K, her counterpart in Lahore quotes PRs 40k. (I assume both have the same room for negotiation).
Keep in mind upscale escorts are the ones queuing up to buy Tim Hortons coffee and not affected by economic crisis.

[Cyrano]

The things you learn from BRF saars... !

[Vayutuvan]

Pakistan rupee has several more levels/grades: quilted, double ply, single ply, etc.

My goto thread for stress relief - easy to remember name "Stress watch"

[CalvinH]

Serious question to all the zaahil kuffars, is grass halal? Is it ok to eat grass for atami taqat.

Only the green one Saar with the one with Khusbhoo droppings reserved for the direct descendants only..

[vimal]

Serious question to all the zaahil kuffars, is grass halal? Is it ok to eat grass for atami taqat.

Only the green one Saar with the one with Khusbhoo droppings reserved for the direct descendants only..

Ah the green grass with greener droppings will make kuffars green with envy.

[Manish_P]

So what if south korea leaves, there is always north korea...

Yawn - South Korean companies ‘on brink of shutdown’

South Korean companies are on the brink of operational shutdown in Pakistan because of import restrictions and a delay in the clearance of containers stuck at the port.

In a recent interview with Dawn at the office of the Korea Trade-Investment Promotion Agency (Kotra), senior officials from the state-backed trade body as well as the local chamber of Korean investors said the non-opening of letters of credit (LCs) for imports of raw material is costing Korean companies “millions of dollars” in lost sales.

“I am fighting with the bank every single day. Even for a small (outward) remittance of $ 20,000. Advance payments for imports are not being cleared. The situation is getting worse for the downstream industry as well,” said Ji Han Chung, chairman of the Chamber of Korean Investors in Karachi.
..
Pakistan’s imports from Korea in 2021 amounted to $1.5bn, up 41.8 per cent from 2020, according to the International Trade Centre.

Mr Kim said Korean companies have barely repatriated any profits or dividends back to their headquarters in Seoul for more than one year.

SBP data shows the net inflow of FDI from Korean investors in the first half of 2022-23 was $12.4m, about 2.7pc of the overall FDI inflow of $460.9m in July-December.

[VishnuS]

I am happy with everything that's happening in Pak, but two things happened out of blue!

Though remittance declined 27% YoY, but the forex had increased by $276M and now just about $3B!!

PKR is actually gaining wrt to $$$, though it's not much, but given the Pak situation it shouldn't have happened.

Guru's any idea why Pak forex increased and PKR also increased at the same time, all this had happened when their rating fell from CAA+ to CAA-. Ideally no bank should give loan to them, With little forex, Pak couldn't have strengthened PKR, so... just curious why and how PKR is climbing along with its Pak forex reserves!

I was dreaming of their default by May, so that they'll agree to all our conditions during IWT discussion.

[Aditya_V]

I am happy with everything that's happening in Pak, but two things happened out of blue!

Though remittance declined 27% YoY, but the forex had increased by $276M and now just about $3B!!

PKR is actually gaining wrt to $$$, though it's not much, but given the Pak situation it shouldn't have happened.

Guru's any idea why Pak forex increased and PKR also increased at the same time, all this had happened when their rating fell from CAA+ to CAA-. Ideally no bank should give loan to them, With little forex, Pak couldn't have strengthened PKR, so... just curious why and how PKR is climbing along with its Pak forex reserves!

I was dreaming of their default by May, so that they'll agree to all our conditions during IWT discussion.

There was one thing I could think of, most pakis in Gulf work as Laborer's, at a pay where they are not eligible for family visa's, now resident Pakis might be asking the NRP to pay hafta for the safety of their family women and children, so they are forced to transfer some of their savings to Pakiland.

[Neela]

https://www.dawn.com/news/1737748

Textile exports fall for fifth consecutive month

The drop in textile and clothing exports is gaining momentum over the past five months owing to multiple factors including high energy costs, stuck-up refunds and a slump in global demands despite the massive depreciation of the rupee.

Exporters believe that one of the main reasons behind falling exports was the exchange rate instability. The discontinuation of duty drawbacks on local taxes and levies by the government has also created liquidity issues for the export sector.

As part of the agreement with the IMF, the government has announc­ed discontinuing subsidies on energy from March for the export sector. The piling of containers at ports is also contributing to the decline in exports.

There you go. So even Paki textiles was running on subsidized electricity.

[Manish_P]

..
There you go. So even Paki textiles was running on subsidized electricity.

Absolutely, now with removal of subsidies Baki export prices will go up substantially (if they are able to export) and they will not be able to compete with the likes of Bangladesh, India.

Need to keep an eye for the Banglas. They like their estranged TFTA cousins are also good at creative accounting and have just got an IMF package.

[Bart S]

So what if south korea leaves, there is always north korea...

Yawn - South Korean companies ‘on brink of shutdown’

South Korean companies are on the brink of operational shutdown in Pakistan because of import restrictions and a delay in the clearance of containers stuck at the port.

Mr Kim said Korean companies have barely repatriated any profits or dividends back to their headquarters in Seoul for more than one year.

Serves them right, they allowed their Paki units and agents to be part of a coordinated ISPR campaign on Kashmir propaganda last year with logos and official channels of big name Korean brands used, and when Indians protested, the PR folks of their Indian subsidiaries who make 10s of billions of dollars from India were arrogant and glib about it.

[Bart S]

I was dreaming of their default by May, so that they'll agree to all our conditions during IWT discussion.

Default is the best option for them, as it would wipe clean the slate in a sense, and force them to reform. Better that they continue being in turmoil, and becoming more of a nuisance and burden to their four fathers (this latter aspect is very important and apart from the situation in Pakistan, has been a major change that has happened in our favor over time).

Also, on IWT there is no indication that GOI is going to go hammer and tongs at them upfront, it will probably be a step by step approach with steady escalations if they don't cooperate. So it is better for us that they remain in a crisis long term.

[chetak]

the fast rusting iron birathers are mercilessly piling it on ...

what happened to all that tallel, sweetel, and deepel bull droppings, especially since the pakis are still consuming vast quantities of bhutto's piously recommended holy green grass.....

Pakistan All at Sea as Chinese Shipping Firm COSCO Stops Container Deliveries

https://www.news18.com/news/world/exclu ... 82047.html

China’s state-owned major shipping company COSCO has suspended Pakistan’s container deliveries without advance payment. The firm has also decided to collect the various local charges and taxes to be paid in Pakistan first.

Market traders in Karachi confirmed this, saying China is refusing orders from Pakistan and demanding “full payments in advance".

They said that the State Bank of Pakistan is not allowing Letters of Credit (LCs) and more than 11,000 import payment cases and orders are Pending with the SBP.

The traders said that Chinese companies are saying there is a dollar crisis in Pakistan, and the container rent and surcharges have to be paid first.

[chetak]

WA

Air India’s plane deals - $150 billion.

Pakistan’s GDP - $346.28 billion.

Is there anything more to add, to make these grass eaters understand the reality of their plight a little better

[Dilbu]

Weekly inflation surges to 38.4pc

ISLAMABAD: Prices rose significantly in the outgoing week, both on on-year and on-week bases, mainly led by onions, chicken, cooking oil and a massive jump in fuel prices, official data showed on Friday.

As a result, short-term inflation, measured by Sensitive Price Indicator (SPI), jumped to 38.42 per cent on a year-on-year basis for the week ended on Feb 16, rising from 34.83pc in the previous week, the Pakistan Bureau of Statistics (PBS) said.

The hike in prices is the highest annual rise since the week ending Sept 15, 2022, when the SPI inflation was 40.6pc.

[Dilbu]

Economic crisis 'chips away' at Pakistan's industrial might

As cash-strapped Pakistan continues its efforts to avert a debt default, a shortage of raw materials and a severe liquidity crunch have forced several companies to halt operations in the last few months, Bloomberg reported Saturday.

The critical position of foreign exchange reserves — which stand at around $3.19 billion as of February 10 — reflects the miseries of the $350 billion economy struggling to fund imports as thousands of containers of supplies were stranding at its ports stalling production and putting jobs of millions of people at risk.

A day earlier, Pak Suzuki Motor Company — one of the country’s largest car manufacturers — announced its decision to extend the shutdown of the automobile plant till February 21 citing inventory shortfall as a major reason.

Meanwhile, Ghandhara Tyre & Rubber Company — manufacturer of tires and tubes for automobiles — shut its plant on February 13, saying it is facing "immense hurdles towards importing raw materials and obtaining clearance of consignments from commercial banks".

Apart from these two listed companies, several others including manufacturers of fertilisers, steel, and textiles have shut down their factories indefinitely or suspended operations intermittently as they grapple with an inventory shortfall.

Along with Pak Suzuki, Honda Motors, and Toyota’s local units also went through weeks-long plant closures which affected the sales adversely — that fell 65% to the lowest in almost three years in January compared to a year ago.

Among those that have also shut or slowed operations are:

GSK Plc’s Pakistan unit
Engro Fertilizers Limited
Fauji Fertilizer Bin Qasim Limited
Nishat Chunian Limited
Amreli Steels Limited
Millat Tractors Limited
Diamond Industries Limited