Pakistani Economic Stress Watch

[Manish_P]

^ Pakis are now said to be welcome in East Pakistan.

Abduls can now get on bedas and sail for Dakka

[Aditya_V]

^ Pakis are now said to be welcome in East Pakistan.

Abduls can now get on bedas and sail for Dakka

No Paki worth his salt will set foot in BD, they can only loot each other.

[chetak]

^ Pakis are now said to be welcome in East Pakistan.

Abduls can now get on bedas and sail for Dakka

No Paki worth his salt will set foot in BD, they can only loot each other.

Aditya_V ji,


The pakis, in the meanwhile, with the blessings of the amrikis and the beedis, have shipped hundreds of container loads of weapons and other war stores by sea to beedi ports.

these weapons and stores have gone to ground, waiting to be used against India

the pakis are not done with us yet, unless we grab them by the throat and kick them in the testimonials. Attacking India from beediland gives the pakis credible deniability

the arrival of trump may have slowed their plans and youanus is, in popular discussions by abdools and ayeshas, expected to leave beediland under the guise of the Davos Forum visit and not return back to beediland. Let's wait and see

youanus is rumoured to have made lots of expensive investments in the UK, europe, and particularly in paris

[Aditya_V]

I Agree for long term survival we need to change the geography the British left us.

[A_Gupta]

https://profit.pakistantoday.com.pk/202 ... -trillion/

The power sector’s circular debt surged by Rs83 billion during FY 2023-24, bringing the total to Rs2.393 trillion, according to a report presented in the National Assembly on Monday.

Reminder: "Circular debt occurs when one entity facing problems in its cash inflows holds back payments to its suppliers and creditors. Thus, problems in the cash inflow of one entity cascade down to other segments of the payment chain."

[Haresh]

What went wrong with ‘Pakistan’s Dubai’? – inside the Chinese initiative that is prompting terror attacks

https://www.theguardian.com/world/2025/ ... or-attacks

[Agasthi]

IMF website has Pakistan's GDP calculated at 337 billion USD for 2023 and 374 billion USD for 2024. Below is a table that I could gather and my calculations indicate they are only 345 and 353 respectively. Wikipedia has them down for 394 billion USD for 2025 a jump of over 60 billion dollars from 2023 which seems far fetched compared to their currency and growth rates, Am I missing anything (like inflation + growth) is it a case of Sialkot Statistics?

Year GDP (USD) (billion) GDP (PKR) GDP Growth PKR @ Dec
2023 337.46 93533.7882 -0.20%
2024 345.55904 95778.59912 2.40% 277.17
2025 353.1405183 98173.06409 2.50% 278

[Manish_P]

^ Sir, almost all their figures are fudged. The only remotely accurate figures would be the loan and aid amounts. And I would not trust even those...

[A_Gupta]

The USD-PKR rate has not changed a lot from end of FY 2023 to end of FY 2024 while inflation has helped boost the GDP in current PKR by 26.4%. This is how the IMF figures come about, based on Pak finance ministry numbers.

To that, I don’t know how one calculates nominal GDP when inflation ranges from 15-30% during the months of the year. Does one value January’s production in January’s prices or in June’s prices which are way higher?

Nominal GDP is virtually meaningless, one has to reduce each month’s figures to a constant price value.

IMO:
Government finances remain a mess, saved only by bailouts from abroad.
Anyone on salary/wages is way worse off, as income would not have kept pace with inflation.
Anyone who actually owns what they produce might not have deteriorated as much as the wage-earners, if what they produced could also sell at the inflated prices.

[drnayar]

Pakistan Paraglider at Air Show landed in Chief Guest Lap .. pakis probably invented a new version of lap dancing


https://x.com/rose_k01/status/1883795061756076147

[williams]

Pakistan Paraglider at Air Show landed in Chief Guest Lap .. pakis probably invented a new version of lap dancing


https://x.com/rose_k01/status/1883795061756076147

Thanks for sharing. This just made my day.

[Agasthi]

The USD-PKR rate has not changed a lot from end of FY 2023 to end of FY 2024 while inflation has helped boost the GDP in current PKR by 26.4%. This is how the IMF figures come about, based on Pak finance ministry numbers.

To that, I don’t know how one calculates nominal GDP when inflation ranges from 15-30% during the months of the year. Does one value January’s production in January’s prices or in June’s prices which are way higher?

Nominal GDP is virtually meaningless, one has to reduce each month’s figures to a constant price value.

IMO:
Government finances remain a mess, saved only by bailouts from abroad.
Anyone on salary/wages is way worse off, as income would not have kept pace with inflation.
Anyone who actually owns what they produce might not have deteriorated as much as the wage-earners, if what they produced could also sell at the inflated prices.

Thanks for the inputs, its quite intriguing to see what the Pakis are upto; its as if they are doing some subtle fudging to maintain parity with India on paper. If India is at 3500 billion USD they are at 350; if it is 4000 B they are at 394

Their GDP was calculated at 374 billion USD for FY2022 and due to currency depreciation when PKR hit new lows of USD300 their GDP for FY23 was down to 328 billion USD which kind of adds up. Since then, given their growth rates (GDP growth rate < population growth rate) and high inflation you would see PCI go down.

Trawling through Paki street on social media provides enough evidence of incomes having taken a nose dive. Remittances is sustaining families; GOI should work on hitting that. A Suzuki Mehran (Maruti 800) is seen as an investment and hedge against inflation. A 2018 model averages between 12 -15 lakh PKR (INR 4.5 Lakh) You can withdraw > 50,000 PKR (INR 15,000) and then upto a certain threshold only with Bank Manager approval. This hits cash circulation and will be a huge dampener on economic activity and drive the economy more underground.

As you rightly said, Production at inflated prices are being brought despite wages and salaries having taken a hit. Must be remittances and ganja exports. They are without a doubt in a big mess. Fervently hoping the GOI pursues a strategy to push them over that edge and they splinter.

P>S - IMF estimates for India is at 4.27 trillion USD and despite trying to correct the numbers (thrice) on wikipedia citing IMF, someone keeps going to the page and edits it to back to 4.0 trillion.

[A_Gupta]

Fitch sees signs of improvement in the economy
https://www.dawn.com/news/1890535

[Vayutuvan]

P>S - IMF estimates for India is at 4.27 trillion USD and despite trying to correct the numbers (thrice) on wikipedia citing IMF, someone keeps going to the page and edits it to back to 4.0 trillion.

Agasthi ji, you can warn that person of edit warring and then report.

[Manish_P]

Yawn - Plunging lint output to hit textile industry

Pakistan’s cotton industry is facing an alarming crisis as national production plunges to the second-lowest level in the country’s history, falling nearly 50 per cent short of the official target and 34pc below last year’s output, reveals the Pakistan Cotton Ginners Associa­tion (PCGA) final report for the crop season 2024-25 released on Monday.

Interestingly, despite this sharp production dec­line, approximately 365,000 bales of unsold cotton are stockpiled in ginning factories, sparking fears of an unprecedented reduction in cotton cultivation for the upcoming season.

Unless immediate corrective measures are taken, he cautions that next season’s cotton harvest may drop even further, forcing Pakistan’s increased reliance on expensive imports.

[SRajesh]

www.nation.com.pk/05-Mar-2025/pakistan- ... -ishaq-dar
The 'Delusion of Grandeur' seems to be a National Disease.
IMF needs to threat this disorder first and then tackle fiscal deficit etc

[Dilbu]

Thrashing around

WE are now in the advanced stages of a fiscal malfunction that is causing the state in Pakistan to sink deeper into financial and economic non-viability. There is no point sugar-coating this harsh reality.

For too many years now, we have been repeating what is now a familiar ritual, where the budget is announced accompanied with pious-sounding intentions, well-meaning rhetoric, and pointed reminders about the state’s constraints. And yet the only thing that changes is the increase in the burden on those who are registered, compliant taxpayers.

There is not a single reform measure in this budget. No strategic change of direction is indicated anywhere. They claim to be trying to boost exports through wide-ranging reduction in custom duties across thousands of tariff lines but one is hard-pressed to find an exporter who is keen on this proposal. The most significant area one looks for in a budget are measures designed to broaden the base of taxation. And all we find is steps designed to bring online marketplaces, incomes and transactions of the digital economy into the net and ramp up the powers of tax commissioners to penalise those refusing compliance.

There are revenue measures to make you cry. Last year, they taxed stationery and children’s school supplies. This year they have dropped a bombshell of a tax on teachers by abruptly withdrawing a tax rebate that they had only a few days ago committed they would keep. And then they sat in their ritual ‘post-budget press conference’ and told us how much they value the work of educated Pakistani youth, who have brought $400 million into the country as freelancers, adding that they would like to see these same code writers make $90 to $100 per hour or something like that in the years to come.

The last major tax reform that was attempted in Pakistan was the so-called Reformed General Sales Tax, or RGST, bill back in 2009. It died a loud and messy death in parliament as even the government’s coalition partners at the time refused to vote for it. Since then, we have been reduced to clever little gimmicks to squeeze more and more revenue out of those foolish enough to be registered and complying with the tax laws of the country.

Along the way, we have invented whole new categories of taxpayers, and whole new income streams. Somewhere around the middle of the 2010s we had a new category of taxpayer called ‘non-filer of tax returns’. In 2022, the government invented the category of ‘deemed income’. Along the way, we had amnesty schemes, incentives and penalties to try and get recalcitrant non-filers to register, and pay their taxes.

It began in 2014 with an amnesty scheme and a withholding tax on bank transactions of non-filers. It continued through 2019 when the FBR was prodded into serving tens of thousands of notices to non-filers in the services sector. It continued in 2021 when we were supposed to collect tens of billions of rupees from ‘point of sale machines’ that were going to be mainstreamed across the retail sector.


It raced passed 2022 when incomes were deemed to have come from otherwise dormant assets on the wealth statements of the rich, and taxes were to be collected from shopkeepers based on power consumed and the square footage of their outlets. In 2024 we had the ‘Tajir Dost scheme’, announced by the same finance minister who gave us the latest budget.

And what do we have to show for this decade-long effort? Vast databases of non-compliant individuals and businesses?

All these schemes and gimmicks show us a state thrashing around within the shrinking confines of its resource envelope. Meanwhile, every year the same ritual plays out. A new scheme is announced, and the burden on those who pay is increased further, while we are all reminded that times are hard and the fiscal space is limited. This stasis, this inability to drive any change, is taking the state deeper and deeper into non-viability as it is forced to squeeze more from less and borrow the remainder. This was the year when that could have changed.

Instead, we got this elephantine mediocrity they’re calling a budget. Another year of treading water. Another year of limping from one IMF review to the next, with no end in sight.

[Dilbu]

The article finally blames everything on IMF who is lending again and again to TSP.
State of the economy

Since 1988, Pakistan has been in 14 IMF programmes.

On each occasion, without fail, the economy has achieved stabilisation similar to what it is experiencing currently. Each time, the government of the day has launched into a song and dance to celebrate an invariably short-lived achievement. More importantly, one that has come at great human cost.

This time is different, however. Not because the incumbent government has embarked on a path of serious reform that will break the country free from its continual dependence on the IMF.

But because the current IMF programme is the harshest in Pakistan’s history, demanding a level of fiscal austerity that has exacted an un­­precedented toll of economic devastation, misery and impoverishment. Ordinary Pakista­nis have paid a very heavy price for the stabilisation the government is celebrating. And there is no place for their suffering in the official narrative.

A deadly combination of declining real incomes with rising unemployment and poverty, has meant that ordinary Pakistanis are in economic distress as never before. According to the government’s own statistics, from the recently published 7th Population and Housing Census-2023, over 18 million Pakistanis are now officially unemployed, with the jobless rate at an unheard of 22 per cent. Youth unemployment has hit an all-time high of 29pc.

Though not strictly comparable, the corresponding figure from the Labour Force Survey 2020-21, was 6.3pc — or 4.5m unemployed Pakistanis recorded two years prior to the digital census. This points to a steep increase in unemployment in a short span of time.

Not surprisingly, given the widespread joblessness, the latest poverty statistics are equally alarming. According to the World Bank, nearly 45pc of the population is now below the economic waterline, of $4.2/day. Using a lower international poverty line (of $3.65/day based on 2017 PPP), an additional 12.8m Pakistanis have been pushed into poverty since 2022, for a total of over 107m citizens. As in the case of unemployment, this is very likely the sharpest increa­­se over a two-year period in Pakistan’s history.

Placed in the context of faltering economic growth and an unprecedented loss in purchasing power for the average Pakistani since 2022, the foregoing statistics, however shocking on their own, are likely understating the true scale of economic misery being experienced by the masses.

Real GDP growth has averaged only 1.7pc since 2022-23, the lowest three-year average growth ever recorded since 1952 — and well below the population growth rate. All the main growth engines of prosperity in the economy have sputtered since 2023. Agriculture has performed poorly, with major crops posting one of the largest declines ever recorded. The Manufacturing sector has contracted over 10pc cumulatively since 2022-23. The Services sector has grown at two-thirds its long-run average rate of growth.

No economic sector or population segment has been spared. Farm incomes have collapsed, leading to a poverty rate of 50pc in rural areas, according to the World Bank. Countless factory workers are now jobless, while middle class households across Pakistan struggle to make ends meet. Since March 2022, the purchasing power of an average Pakistani has declined by 58pc. This means anyone earning Rs50,000 per month in March 2022, now has a purchasing power of just Rs20,833.

None of this should be surprising given the nature of the IMF programme. Widespread factory closures and industrial job losses, devastation of the farm sector, and the decimation of the middle class are the hallmarks of the Fund’s anti-growth and anti-people austerity policies. The social devastation visited upon Greece since 2010 is a glaring example. As I have previously written, despite the emphasis on social safety nets, the IMF gets the burden of adjustment of its programmes so tragically wrong.

How then can one explain the wide disconnect between the harsh daily struggles of ordinary Pakistanis set against official celebration of macroeconomic stabilisation? And the supportive, and sometimes embarrassingly gushing, endorsement from the IFIs? It is useful to remember that Pakistan has received similar endorsements from the IMF and World Bank, the sovereign credit rating agencies and the likes of Barron’s, multiple times in the past. In each case, there is a combination of a particular set of incentives or a narrow point of view at work.

In the case of the IMF especially, there are professional as well as institutional incentives at work that can lead to over-hyping results of a programme, or condoning lapses. IMF mission chiefs and their management have every incentive to avoid a failed programme as it can be career-limiting. To do so, they can indulge in playing up programme successes, or pursue performative reforms to notch marginal wins to amplify the ‘success-factor’ of the programme under their watch.

The institutional incentive for the IMF is to portray, as quickly as possible, both to the financial markets as well as to bilateral donors, that a programme country under its watch is now eligible for a resumption of capital flows. This also plays out via the fairly charitable and ‘behind the curve’ debt sustainability assessments the Fund produces.

To left-leaning critics of the Bretton Woods Institutions, there is a hidden, more sinister dynamic at play. Support from the West in terms of access to funding from the IFIs, and the subsequent endorsements from the BWIs, are part of a system-legitimising re-stratification effort to consolidate the hold of Western-aligned ruling elites on power.

In Pakistan’s case, this plays out as timely and generous financial assistance, spinning a helpful narrative, facilitating political largesse and profligate spending in the budget for the past over two years while imposing austerity policies on ordinary Pakistanis. The IMF has much to answer for.

With one in two Pakistanis now below the poverty line, and nearly one in four unemployed, the state of Pakistan’s economy has never been as dismal and worrisome as over the past three years. This is the human cost of the stabilisation the government and the IMF are celebrating — and sadly, glossing over.

[Manish_P]

Fikar not Maulaners.

With Iran likely on the chopping block, good times will be back again for the Pakistanis.

(At least for the Elites. The awaam anyway seems to have gotten used to grass)

The IMF deal was the initial payment. More is to come soon...