Pakistan Economy : Updates and Discussions

Arsalan123

Banned
Jun 3, 2019
1,450
237
Sindh, Pakistan
Thank you Jinnah. Enjoy your freedom. Freedom wont feed you rotis or build roads or else China wouldn't be a Communist regime.
Whose living a better life ,a chinese with no FoE but high standard of living or Pakistan , not completely free yet lowest standard of living. Hmm
It doesn't matter. In our country,we can live freely. China is our great friend and China now makes everything by itself which only few countries do. China is world power and China and pakistan best friends. Don't blame our low standard of living on China. We are corrupt. We are corrupt to the core.i can't explain further.
 

Deathstar

Well-Known member
Jun 1, 2019
1,622
951
India
It doesn't matter. In our country,we can live freely. China is our great friend and China now makes everything by itself which only few countries do. China is world power and China and pakistan best friends. Don't blame our low standard of living on China. We are corrupt. We are corrupt to the core.i can't explain further.
I am not blaming china lol , read again. I am saying how China is not free yet they live far better than an average Pakistani.
Corruption is not a reason for incompetence. U thinking Chinese aren't corrupt? They indeed are
 

Arsalan123

Banned
Jun 3, 2019
1,450
237
Sindh, Pakistan
I am not blaming china lol , read again. I am saying how China is not free yet they live far better than an average Pakistani.
Corruption is not a reason for incompetence. U thinking Chinese aren't corrupt? They indeed are
I believe corruption makes a country weak. Number of corrupt people in a country matters. Almost all pakistanis are corrupt.only few cares about country.many left pakistan long time ago just for better living. People ask me why our countrymen are leaving pakistan? Reason is clear. Good People don't want to see corruption and that's why they go abroad.chicken price 350 to 400 per kilo.do you remember 400 rupees per kilo tomato? Some shopkeepers keep selling chicken in even higher prices and nobody can question them. It's like jungle ka qanoon. There is a report on PDF related to judge salaries in Pakistan.everyone is corrupt.
 

_Anonymous_

Senior Member
Banned
Dec 4, 2017
14,520
10,479
Mumbai

17% on used car sales?!?? Tauba Tauba!! Isko aam zubaan mein kafanchori kehte hain. Yeh hain naya Paxtan. @safriz ; @Arsalan123


Can't imagine what's it like for new cars, if new cars are being sold that is. At this rate Paxtanis will be driven to drive bicycles & donkey carts. Good thing is there's plenty of the latter in Paxtan. Literally. No puns here.
 

RISING SUN

Senior member
Dec 3, 2017
9,193
4,739

Pakistan economy contracted $10.5 billion foreign loans in FY20​

Cash-strapped Pakistan contracted $10.447 billion worth of new foreign loans from multilateral institutions and commercial banks during the fiscal year 2019-20, almost one-fourth higher than previous year’s $8.4 billion, according to a media report.

According to the Annual Report on Foreign Economic Assistance 2019-20 released by the Ministry of Economic Affairs, 99 per cent of the new commitments were for loans and the remaining 1 per cent in grant commitments, the Dawn News reported.

Out of the total new agreements of $10.447 billion, more than $6.79 billion financing agreements were signed with multilateral agencies, $3.463 billion with foreign commercial banks and $193 million with bilateral lenders.

The report said the high level of commercial financing worth $3.463 billion — accounting for 33 per cent of the total new commitments — had been secured from commercial banks to refinance maturing commercial debt during the year.

Asian Development Bank (ADB) emerged as the largest lender with new commitments of 30 per cent, followed by World Bank 22 per cent, Islamic Development Bank (IDB) 7 per cent and Asian Infrastructure Investment Bank (AIIB) 5 per cent.

These financial institutions extended financing of about 98 per cent of the total new commitments.

The report said that 69 per cent of the new commitments during FY 2019-20 were made under the category of budgetary support.

“This high level of budgetary support was secured mainly to offset socio-economic impact of COVID-19 pandemic and to meet the higher external financing requirements for external debt retirements,” it added.

About 26 per cent of the new commitments were allocated for project financing and 5 per cent for commodity financing.

The new commitments were higher than budgeted in view of the COVID-19 pandemic. An amount of $7.5 billion had been committed as budgetary support, of which $4 billion was committed by multilaterals as programme financing and the remaining from foreign commercial banks, the report said.

The major share (40 per cent) of new commitments was meant for transport and communication in FY 2019-20, followed by 19 per cent for health, 12 per cent for physical planning and housing, 10 per cent for rural development and poverty reduction, 9 per cent for power sector and 6 per cent for agriculture.

On the other hand, the total disbursement of foreign loans in FY 2019-20 amounted to $10.7 billion — slightly lower than $10.8 billion during the same period of FY 2018-19. Of these, 97 per cent disbursements were in the shape of loans and 3 per cent grants, the report said.

The disbursements included $6.5 billion by multilateral and bilateral lenders as compared to $4.1 billion last year, registering a growth of 59 per cent.

In addition, the government also raised $3.4 billion from foreign commercial sources to meet its external debt obligations and support the balance of payments.

Disbursements of $10.7 billion were mainly under the projects and programme loans or grants from multilateral, bilateral and financial institutions. This included $5.645 billion or 53 per cent of total disbursements from the multilaterals, mainly ADB, IDB, AIIB and World Bank.

An amount of $3,373 million or 32 per cent of the total disbursements was from foreign commercial banks mainly for refinancing of maturing commercial debt. Another $1.644 billion or 15 per cent of the disbursements was from bilateral lenders, particularly Saudi Arabia, China and the United Kingdom.

As of June 30, 2020, Pakistan’s total external public debt amounted to $77.9 billion, compared to $73.4 billion during the same period last year, showing a growth of 6 per cent.

The report showed total external public debt from three key sources — 51 per cent multilateral debt, followed by 31 per cent bilateral debt, including China’s SAFE deposits, and the remaining 18 per cent from foreign commercial banks and institutions, including Eurobonds and Sukuk.

After accounting for total repayments and fresh disbursements, net transfers to the government during FY 2019-20 amounted to $1.8 billion.

The report said the stock of external loans obtained via market-based instruments declined by $2.062 billion in bonds and commercial borrowing and the share of concessional external loans with longer maturity increased by $3.87 billion in multilateral and bilateral loans, showing a relative improvement in external public debt stock.

The report said the net transfers had remarkably declined after 2018. “Despite elevated level of external debt servicing, Pakistan has successfully discharged its record debt servicing during FY 2019-20 by successfully mobilising external resources and shifting focus from short-term commercial high-cost liquidity to long-term concessional flows,” it said, claiming credit for prudent external debt management and growing confidence of lenders.

The economic affairs ministry said that about 70 per cent of the total external public debt consisted of loans on fixed interest rates as of June 30, 2020, while the remaining 30 per cent loans were obtained on floating interest rates.
 
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Ashwin

Agent_47
Staff member
Administrator
Nov 30, 2017
4,701
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Bangalore
@Nilgiri what is your assignment of Pakistani economy ? What are the consequences of depricating currency, high interest foreign loans and geopolitics doing to it last few years.

Interestingly, their debt-to-GDP ratio is not that high as you would expect.
 
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Nilgiri

Senior member
Dec 4, 2017
567
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@Nilgiri what is your assignment of Pakistani economy ? What are the consequences of depricating currency, high interest foreign loans and geopolitics doing to it last few years.

Interestingly, their debt-to-GDP ratio is not that high as you would expect.

Past any number, the one that is sinking them most is their extremely low savings rate - GDP (just 7%)

Effectively now it means 20 billion USD is what their population can save in a year (given their GDP in USD nominal is now shrunk to around 250 billion USD). They import near 3 times this per year.

India give or take saves around a trillion per year (this is even with our savings rate taking a whack from about 35% some years back to around 30% now). We import per year about half of this.

3*2, in this basic pressure, we are 6 times ahead (on per capita basis propulsion w.r.t savings vs import).

This is basically the buffer you have to invest into capital directly and also leverage loans upon (along with things like Market cap) as it is not what you just spend for day to day and to keep up with inflation etc. I.e how much of the latter you can forego to help with climbing out of the situation to something better.

Combine with their very low tax base and slipshod financial management, they are in a big rut without deep reform.

But that deep reform at first principle is a fundamental peace with India and also a genuine, credible political system (without khaki cabal at top pulling strings and orchestrating musical chairs game). This is psychologically quite hard for them to admit and correct as we all know.

Debt-GDP ratios etc only matter when you have a proper credit rating (investment grade). Theirs is junk so they have long been cut-off from ramping up foreign debt (past what China nowadays sees fit to send their way) as simply their tax-base, savings rate and sheer bureaucrat incompetence have shown the numbers to foreign creditors and investors a long time ago. So its case of supply nowhere near meeting their demand to keep debt-GDP where it is (from supply side)....same to how a poor person might not have much debt at all, precisely because he hasn't shown any bank he can sort himself out to get better so he can pay it back (with interest) down the road.

Now add on top of that FATF grey listing which puts off even large institutional creditors like IMF and WB on certain large loans that Pakistan desperately needs to hedge against the Chinese (they wont say this part out loud though).

The real added short term threat to Pakistan this year and next on top of the "structural" ones is two-fold:

- India getting Malaysia to join its side at FATF (thus pushing Pak to blacklist)

- UAE, KSA, GCC (except for Qatar) cutting off work visas to Pakistan and reducing Pakistan worker presence there (in retaliation for the shenanigan stunts PMIK and co are pulling way above their geopolitical height)...again this is also been pushed by Indian economy, diplomacy and pressure.
 

_Anonymous_

Senior Member
Banned
Dec 4, 2017
14,520
10,479
Mumbai

Looks like the baniyas in Delhi are turning the screws on Dimran & Paxtan so silently & efficiently that Paxtan thinks it's actions are offending biradar mulk who seem determined to screw your happiness. So much for the ummah.

Oh btw - before I forget. Hope the proceeds from the sale / mortgage are enough to buy you a few dozen J-10B or C or whichever aircraft PAF desires.

@safriz ; @Arsalan123