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Can the PDM government steer Pakistan out of economic troubles?

Can the PDM government steer Pakistan out of economic troubles?

  • Yes, PDM government will succeed in seeing off the crisis

    Votes: 0 0.0%

  • No, they will end-up driving the country into a bigger mess

    Votes: 8 100.0%
  • Total voters
    8
MenInG

MenInG

PakPassion Administrator
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A few views on this.

1. Current economic issues a fall out of PTI's mismanagement
2. PDM are solely responsible for what is happening to the Pakistan economy.

Regardless of how you look at it, the fact is that PDM are now tasked to get Pakistan out the current economic mess which involves doing a deal with the IMF and stabilizing things.

If not done, the Sri Lanka type situation is a real possibility.

So, the question is - Do the PDM have the ability to save the country?
 
Are you being serious? PDM have installed an accountant as a Finance Minister. A person who in my opinion destroyed the economy before too.
 
Dar destroyed PK exports in his previous tenure with a fixed exchange rate in desperate attempt to create the illusion of prosperity. It failed and he ran off and this time he failed in 3 months. These losers couldn't find their way out of a paper bag, never mind control the fate of 230m
 
Anyone who thinks PDM will steer the country from this mess which they created via regime change is deluded
 
They can definately take us the Sri Lanka route
 
Savak said:
They can definately take us the Sri Lanka route
Click to expand...

This is their aim imo.

A government which is installed by a foriegn power(USA) will do what their master tells them. Pakistan is a nuclear power, so they cant use missiles as they have done against Syria , Libya etc. The aim is to break Pakistan via its economy, this will ensure in fighting and leave the nation weak.

If you look at the history of Dar he has spent a lot of time in the US , spoke against Pakistan and has been trained well on how to ruin Pakistans economy. In return the PDM are rewarded with a free reign to loot and send their money to the western nations for when the time comes to run.
 
KingKhanWC said:
This is their aim imo.

A government which is installed by a foriegn power(USA) will do what their master tells them. Pakistan is a nuclear power, so they cant use missiles as they have done against Syria , Libya etc. The aim is to break Pakistan via its economy, this will ensure in fighting and leave the nation weak.

If you look at the history of Dar he has spent a lot of time in the US , spoke against Pakistan and has been trained well on how to ruin Pakistans economy. In return the PDM are rewarded with a free reign to loot and send their money to the western nations for when the time comes to run.
Click to expand...
Yes the USA also
1: forced Pakistanis to have kids they are the problem for over population.
2: the west also forced Pakistanis to force women to sit at home and not work and contribute to the economy.
3 the west also forced Pakistani to spend all the money on defense and almost nothing on education.
4: the west also forced us to spend money on the lmkat stupid things ( 5 day weddings, building mansions) and not on education and Infrastructure.
5 the west taught us not to pay our share of taxes
Look within within yourself before pointing fingers
 
No. They're the one's responsible for the mess in the first place
 
Pakistan is gripped by a major economic crisis, with the rupee plummeting, inflation soaring, and energy in short supply as IMF officials visit to discuss a vital cash injection.

Prime Minister Shehbaz Sharif for months held out against the tax rises and subsidy slashing demanded by the International Monetary Fund, fearful of backlash ahead of elections due in October.

But in recent days, with the prospect of national bankruptcy looming and no friendly countries willing to offer less painful bailouts, Islamabad has started to bow to pressure.

The government loosened controls on the rupee to rein in a rampant black market in US dollars, a step that caused the currency to plunge to a record low. Artificially cheap petrol prices have also been hiked.

"We're at the end of the road. The government has to make the political case to the public for meeting these (IMF) demands," former World Bank economist Abid Hasan told AFP.

"If they don't, the country will certainly default, and we'll end up like Sri Lanka, which will be even worse."

Sri Lanka defaulted on its debt last year and endured months of food and fuel shortages that sparked protests, ultimately forcing the country's leader to flee overseas and resign.

In Pakistan, time is of the essence, with Nasir Iqbal from the Pakistan Institute of Development Economics warning the economy had already "virtually collapsed" due to mismanagement and political turmoil.

Cost-of-living crisis

The IMF delegation will arrive on Tuesday to a nation in panic, still reeling from unprecedented floods that submerged a third of its territory.

The world's fifth-biggest population has less than $3.7 billion in the state bank -- enough to cover just three weeks of imports.

It is no longer issuing letters of credit, except for essential food and medicines, causing a backlog of thousands of shipping containers at Karachi port stuffed with stock the country can no longer afford.

Industry has been hammered by the imports block and massive rupee devaluation. Public construction projects have halted, textiles factories have partially shut down, and domestic investment has slowed.

In downtown Karachi, dozens of day labourers including carpenters and painters wait with their tools on display for work that never comes.

"The number of beggars has increased and the number of labourers has decreased," said 55-year-old mason Zafar Iqbal, who was eating biriyani from a plastic bag donated by a passer-by.

"Inflation is so high that one cannot earn enough."

At the petrol pump, a widow with her son said every few hundred rupees (75 cents) of fuel for their motorcycle was precious, with the pair only eating two meals a day.

"The cost is so high that we eat our breakfast late and the second meal at around seven, with nothing in between," said Ulfat, who declined to give her second name.

Political mayhem

Pakistan is locked in an endless cycle of servicing external debt.

State Bank Governor Jamil Ahmed last month said the country owed $33 billion in loans and other foreign payments before the end of the fiscal year in June.

A diplomatic offensive has seen $4 billion rolled over by lending nations, with $8.3 billion still on the negotiating table.

Meanwhile, Pakistan is battling severe energy shortages -- with capacity drained by poor infrastructure and mismanagement -- compounding the misery of businesses and citizens.

Last week, the whole country was plunged into a day-long blackout because of a fault in the national grid that followed a cost-cutting measure.

State petroleum minister Musadik Malik told reporters in Islamabad that imports of Russian oil would start in April, paid for in currencies of "friendly countries" in a mutually beneficial deal.

The tumbling economy mirrors the country's political chaos, with former Prime Minister Imran Khan heaping pressure on the ruling coalition in his bid for early elections while his popularity remains high.

Mr Khan, who was ousted last year in a no-confidence motion, negotiated a multi-billion-dollar loan package from the IMF in 2019.

But he reneged on promises to cut subsidies and market interventions that had cushioned the cost-of-living crisis, causing the programme to stall.

It is a common pattern in Pakistan, where most people live in rural poverty, with more than two dozen IMF deals brokered and then broken over the decades.

"Even if Pakistan avoids default, the underlying structural factors that triggered the current crisis -- one exacerbated by poor leadership and external global shocks -- will still be in place," tweeted political analyst Michael Kugelman, the director of the South Asia Institute at the Wilson Center in Washington.

"Barring difficult, large-scale reforms, the next crisis could be just around the corner."

AFP
 
PDM has given the word incompetence a whole new meaning
 
SalimBhai said:
Yes the USA also
1: forced Pakistanis to have kids they are the problem for over population.
2: the west also forced Pakistanis to force women to sit at home and not work and contribute to the economy.
3 the west also forced Pakistani to spend all the money on defense and almost nothing on education.
4: the west also forced us to spend money on the lmkat stupid things ( 5 day weddings, building mansions) and not on education and Infrastructure.
5 the west taught us not to pay our share of taxes
Look within within yourself before pointing fingers
Click to expand...

We should look at our failures . Look at our values before pointing fingers at others.
 
The International Monetary Fund (IMF) has approved loans of $4.7 billion to Bangladesh for disbursal starting immediately, making it the first to secure such funds out of three South Asian countries that applied last year amid economic trouble.

The loans are a win for Prime Minister Sheikh Hasina ahead of a general election early next year and will help the country, which has seen a sharp widening of its current account deficit, depreciation of the taka currency and a decline in its foreign exchange reserves.

Bangladesh will get about $3.3 billion under the IMF's extended credit facility and related arrangements, with an immediate disbursement of about $476 million. The IMF executive board also approved about $1.4 billion under its newly created Resilience and Sustainability Facility for climate investments for Bangladesh, the first Asian country to access it.

==

So our nalaiq so called government is still trying to convince IMF.
 
daytrader said:
pdm
Click to expand...
Thank you. Do you think Pakistani people have any responsibility for where Pakistan stands today. Or is it all foreign powers acting in bad faith or our own parties acting against the national interests . What about the points I listed to someone else. He refused to answer.

Yes the USA also
1: forced Pakistanis to have kids they are the problem for over population.
2: the west also forced Pakistanis to force women to sit at home and not work and contribute to the economy.
3 the west also forced Pakistani to spend all the money on defense and almost nothing on education.
4: the west also forced us to spend money on the lmkat stupid things ( 5 day weddings, building mansions) and not on education and Infrastructure.
5 the west taught us not to pay our share of taxes
Look within within yourself before pointing fingers


Pdm is a train wreck in my opinion. But I would say majority of the responsibility falls on our own shoulders . We should stop blaming others for the mess we are in .
 
This is beyond the reach of this government.

==

The International Monetary Fund (IMF) asked Pakistan on Wednesday to plug unbudgeted Rs675 billion power subsidies with a mix of electricity tariff increase and other revenue enhancing measures, while finding serious deficiencies in the revised ‘Circular Debt Management Plan’ (CDMP) of Rs952 billion.

During the first review of the revised plan that was prepared by the Power Division, the IMF team also asked Pakistan to withdraw the unbudgeted electricity subsidies for exporters and other sectors, according to sources privy to the ongoing discussions.

The Power Division prepared the revised plan to eliminate the Rs975 billion circular debt that it had now projected as against the earlier commitment to the IMF to keep the flow zero. However, the plan did not pass through the IMF scrutiny due to faulty assumptions and heavy reliance on getting Rs675 billion more subsidies.

The IMF’s first set of observations may increase the troubles for the government that is eying to satisfy the lender with a mix of tariff increase and additional subsidies. Pakistan’s economic survival hinges on the success of these 10-day long talks after it could not receive any support from foreign nations.

The IMF’s view was that due to almost negligible fiscal space, there was no room for any additional subsidies, therefore, it asked the government to bridge this Rs675 billion gap with increase in electricity prices and other measures, said the sources.

The global lender asked the government to come up with a proposal to increase tariffs, including withdrawal of the exporters package, which is estimated to cost Rs143 billion in this fiscal year. Out of Rs143 billion, Rs123 billion are unfunded, the sources said.

Prime Minister Shehbaz Sharif had announced the preferential untargeted subsidy for exporters in October, which has now created more troubles for his government and the people.

At the time of the budget, the government kept only Rs355 billion power subsidies for the current fiscal year. In order to manage the flow of the additional circular debt, the Power Division has now sought Rs675 billion more subsidies, bringing the total needs to over Rs1.03 trillion.

However, this did not go well with the IMF. The Express Tribune reported on Wednesday that the revised CDMP revealed that a staggering Rs952 billion more would be added to the circular debt in a ‘business-as-usual’ move.

The government has proposed the imposition of three separate quarterly tariff adjustments, ranging from 69 paisas per unit to Rs3.21 per unit from February to May this year to reduce a gap of Rs73 billion, details showed.

The plan appeared unrealistic, as it had been made on the assumption that the rupee-dollar exchange rate was Rs232 per dollar and 16.84% Karachi Interbank Offered (KIBOR) rate. The current exchange rate stands at Rs270 and KIBOR is close to 18%.

The sources said that the IMF did not appear satisfied with the Power Division’s performance that could not improve the sector’s finances during the past six months. Instead of honouring commitments, the Plan showed about Rs223 billion to Rs275 billion further increase in the circular debt despite increasing tariffs in coming weeks.

The circular debt was Rs2.253 trillion at the end of the last fiscal year – a matter of concern for the IMF. After the exchange rate, the power sector is the second non-negotiable area for the IMF where the government may not be able to get any major relief against its many failures that also date back to the PTI era.

The government has given a gradual implementation plan for the removal of agriculture tube-wells subsidies, which seeks their complete withdrawal by mid of 2025. However, the IMF did not agree to this plan.

Since fiscal 2018-19, the K-Electric has stopped making payments against power purchases due to lapse of the Power Purchase Agreement. The K-Electric’s outstanding payables to the government have increased to Rs490 billion as of December 2022. The estimated addition in the circular debt due to non-payment of K-E dues during the current fiscal year is Rs172 billion, according to the Power Division.

The IMF and the World Bank are pushing Pakistan to sign the agreement with the K-E but the Power Division informed the IMF that the deal could be signed in the fourth quarter of this fiscal year. The Fund was told that the gap in the consumer reference rate and projected cost of supplying power would be mitigated through timely tariff increases.

The IMF was told that only 0.58% improvement is expected in the line losses, which are now estimated at 16.27% and would result in mere Rs12 billion saving.

Compared to 16.27% projections, the Nepra has set the target at 11.7%. The government is showing the total average 0.58% improvement in areas where its writ is very weak.

After the recoveries of the bills dipped to 83%, the government assured the IMF that it will be able to increase the ratio to 90% by end of this fiscal year. Still, the Iesco recovery, once considered very efficient, is shown at 86.4%.

The Qesco recovery is shown only at 33.7%, Sepco 63.8% and Hesco 75%. Due to low recoveries by the power distribution companies, the government sustained Rs180 billion losses in the previous fiscal year.

The revised plan claims that the monthly circular debt reports are published on the Power Division on 18th of every month. Ironically, the last report that is available on the ministry’s website is from October 2021.

The government informed the IMF that It would impose quarterly surcharges to reduce another Rs73 billion in the flow of the circular debt. In any given time from now till June, there will be an additional Rs3.62 to Rs6.14 per unit surge in the cost of electricity, excluding the impact of the pending FCAs.

Earlier, the government had planned that circular debt will be lowered to Rs1.526 trillion through a blend of reductions – Rs284 billion in the old stock and further reducing the flows.

DAWN
 
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<blockquote class="twitter-tweet"><p lang="en" dir="ltr">I dont recognise this Imported Govt installed thru conspiracy & horse trading. How can SS be so shameless given his govt's destruction in 10 mths of our economy & democracy with brazen fascism,end of fundamental rights & rule of law; & allowing terrorism to spread under its watch <a href="https://t.co/RayXmy6PDC">pic.twitter.com/RayXmy6PDC</a></p>— Imran Khan (@ImranKhanPTI) <a href="https://twitter.com/ImranKhanPTI/status/1621360138752761859?ref_src=twsrc%5Etfw">February 3, 2023</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
 
MenInG said:
This is beyond the reach of this government.

==

The International Monetary Fund (IMF) asked Pakistan on Wednesday to plug unbudgeted Rs675 billion power subsidies with a mix of electricity tariff increase and other revenue enhancing measures, while finding serious deficiencies in the revised ‘Circular Debt Management Plan’ (CDMP) of Rs952 billion.

During the first review of the revised plan that was prepared by the Power Division, the IMF team also asked Pakistan to withdraw the unbudgeted electricity subsidies for exporters and other sectors, according to sources privy to the ongoing discussions.

The Power Division prepared the revised plan to eliminate the Rs975 billion circular debt that it had now projected as against the earlier commitment to the IMF to keep the flow zero. However, the plan did not pass through the IMF scrutiny due to faulty assumptions and heavy reliance on getting Rs675 billion more subsidies.

The IMF’s first set of observations may increase the troubles for the government that is eying to satisfy the lender with a mix of tariff increase and additional subsidies. Pakistan’s economic survival hinges on the success of these 10-day long talks after it could not receive any support from foreign nations.

The IMF’s view was that due to almost negligible fiscal space, there was no room for any additional subsidies, therefore, it asked the government to bridge this Rs675 billion gap with increase in electricity prices and other measures, said the sources.

The global lender asked the government to come up with a proposal to increase tariffs, including withdrawal of the exporters package, which is estimated to cost Rs143 billion in this fiscal year. Out of Rs143 billion, Rs123 billion are unfunded, the sources said.

Prime Minister Shehbaz Sharif had announced the preferential untargeted subsidy for exporters in October, which has now created more troubles for his government and the people.

At the time of the budget, the government kept only Rs355 billion power subsidies for the current fiscal year. In order to manage the flow of the additional circular debt, the Power Division has now sought Rs675 billion more subsidies, bringing the total needs to over Rs1.03 trillion.

However, this did not go well with the IMF. The Express Tribune reported on Wednesday that the revised CDMP revealed that a staggering Rs952 billion more would be added to the circular debt in a ‘business-as-usual’ move.

The government has proposed the imposition of three separate quarterly tariff adjustments, ranging from 69 paisas per unit to Rs3.21 per unit from February to May this year to reduce a gap of Rs73 billion, details showed.

The plan appeared unrealistic, as it had been made on the assumption that the rupee-dollar exchange rate was Rs232 per dollar and 16.84% Karachi Interbank Offered (KIBOR) rate. The current exchange rate stands at Rs270 and KIBOR is close to 18%.

The sources said that the IMF did not appear satisfied with the Power Division’s performance that could not improve the sector’s finances during the past six months. Instead of honouring commitments, the Plan showed about Rs223 billion to Rs275 billion further increase in the circular debt despite increasing tariffs in coming weeks.

The circular debt was Rs2.253 trillion at the end of the last fiscal year – a matter of concern for the IMF. After the exchange rate, the power sector is the second non-negotiable area for the IMF where the government may not be able to get any major relief against its many failures that also date back to the PTI era.

The government has given a gradual implementation plan for the removal of agriculture tube-wells subsidies, which seeks their complete withdrawal by mid of 2025. However, the IMF did not agree to this plan.

Since fiscal 2018-19, the K-Electric has stopped making payments against power purchases due to lapse of the Power Purchase Agreement. The K-Electric’s outstanding payables to the government have increased to Rs490 billion as of December 2022. The estimated addition in the circular debt due to non-payment of K-E dues during the current fiscal year is Rs172 billion, according to the Power Division.

The IMF and the World Bank are pushing Pakistan to sign the agreement with the K-E but the Power Division informed the IMF that the deal could be signed in the fourth quarter of this fiscal year. The Fund was told that the gap in the consumer reference rate and projected cost of supplying power would be mitigated through timely tariff increases.

The IMF was told that only 0.58% improvement is expected in the line losses, which are now estimated at 16.27% and would result in mere Rs12 billion saving.

Compared to 16.27% projections, the Nepra has set the target at 11.7%. The government is showing the total average 0.58% improvement in areas where its writ is very weak.

After the recoveries of the bills dipped to 83%, the government assured the IMF that it will be able to increase the ratio to 90% by end of this fiscal year. Still, the Iesco recovery, once considered very efficient, is shown at 86.4%.

The Qesco recovery is shown only at 33.7%, Sepco 63.8% and Hesco 75%. Due to low recoveries by the power distribution companies, the government sustained Rs180 billion losses in the previous fiscal year.

The revised plan claims that the monthly circular debt reports are published on the Power Division on 18th of every month. Ironically, the last report that is available on the ministry’s website is from October 2021.

The government informed the IMF that It would impose quarterly surcharges to reduce another Rs73 billion in the flow of the circular debt. In any given time from now till June, there will be an additional Rs3.62 to Rs6.14 per unit surge in the cost of electricity, excluding the impact of the pending FCAs.

Earlier, the government had planned that circular debt will be lowered to Rs1.526 trillion through a blend of reductions – Rs284 billion in the old stock and further reducing the flows.

DAWN
Click to expand...

That’s a big ask by IMF
 
SalimBhai said:
Thank you. Do you think Pakistani people have any responsibility for where Pakistan stands today. Or is it all foreign powers acting in bad faith or our own parties acting against the national interests . What about the points I listed to someone else. He refused to answer.

Yes the USA also
1: forced Pakistanis to have kids they are the problem for over population.
2: the west also forced Pakistanis to force women to sit at home and not work and contribute to the economy.
3 the west also forced Pakistani to spend all the money on defense and almost nothing on education.
4: the west also forced us to spend money on the lmkat stupid things ( 5 day weddings, building mansions) and not on education and Infrastructure.
5 the west taught us not to pay our share of taxes
Look within within yourself before pointing fingers


Pdm is a train wreck in my opinion. But I would say majority of the responsibility falls on our own shoulders . We should stop blaming others for the mess we are in .
Click to expand...

I agree that we are to blame for our own misery. Our people sadly have tolerated corruption for 4-5 generations that it has become part of our blood. Right and wrong have no meaning in Pakistan. It's a society of might is right. Hard to see a way out of this mess especially with PDM at helm.

As for your questions, they're vast topics. Post to relevant threads and we can try to get a discussion going
 
Last edited:
IMF: entering day 4 unprepared
Govt first proposed cash settlement then book adjustments for circular debt

Pakistan has presented self-contradictory solutions to the International Monetary Fund (IMF) to resolve gas sector circular debt of over Rs1.6 trillion, showing a lack of in-house consensus in a matter that could create hurdles in the coming days.

The disclosure came amid Prime Minister (PM) Shehbaz Sharif’s admission that the IMF was “giving Finance Minister Ishaq Dar and his team a tough time”. In order to satisfy the IMF’s demands, the government is also considering a proposal to increase federal excise duty rates on international air travel and cigarettes as part of the plan to bridge the fiscal gap.

During a session on the government’s plan to settle the gas sector circular debt, the Pakistani authorities first proposed settling over Rs540 billion in circular debt through cash in a single day, sources told The Express Tribune.

...
https://tribune.com.pk/story/2399332/imf-entering-day-4-unprepared
 
daytrader said:
IMF: entering day 4 unprepared
Govt first proposed cash settlement then book adjustments for circular debt

Pakistan has presented self-contradictory solutions to the International Monetary Fund (IMF) to resolve gas sector circular debt of over Rs1.6 trillion, showing a lack of in-house consensus in a matter that could create hurdles in the coming days.

The disclosure came amid Prime Minister (PM) Shehbaz Sharif’s admission that the IMF was “giving Finance Minister Ishaq Dar and his team a tough time”. In order to satisfy the IMF’s demands, the government is also considering a proposal to increase federal excise duty rates on international air travel and cigarettes as part of the plan to bridge the fiscal gap.

During a session on the government’s plan to settle the gas sector circular debt, the Pakistani authorities first proposed settling over Rs540 billion in circular debt through cash in a single day, sources told The Express Tribune.

...
https://tribune.com.pk/story/2399332/imf-entering-day-4-unprepared
Click to expand...

PDM incompetence personified. I wonder why the likes of [MENTION=135038]Major[/MENTION] and [MENTION=131701]Mamoon[/MENTION] have gone Awol.
 
Savak said:
PDM incompetence personified. I wonder why the likes of [MENTION=135038]Major[/MENTION] and [MENTION=131701]Mamoon[/MENTION] have gone Awol.
Click to expand...

Think that is because they are speechless.

We knew PDM were bad but no one suspected it to be this incompetent.
 
Savak said:
PDM incompetence personified. I wonder why the likes of [MENTION=135038]Major[/MENTION] and [MENTION=131701]Mamoon[/MENTION] have gone Awol.
Click to expand...

Where did i not say ishaq dar was buffon and pmln made a grave mistake of letting moftah ismail go?.

I am an affirm believer that follow IMF, and you will be good.
 
‘Things to remain tight’ even after IMF deal, Miftah Ismail warns

Miftah foresees Pakistan's economy remains "tight for a while".
"For future we have to figure out a way to export more, ex-finmin says.
Miftah says he doesn't see how snap polls can solve immediate economic problems.
Former finance minister Miftah Ismail has predicted that things on the economic front would “remain tight” even if the government manages to secure the International Monetary Fund's (IMF) bailout programme.

Pakistan — with a $350 billion economy — is seeking a crucial instalment of $1.1 billion from the IMF to avoid default.

“Things will be tight for a while but we can get enough loans for now that we will get some room,” Miftah replied to a question asked by Geo.tv during a question and answer session held by the former financial czar on the popular microblogging site, Twitter, on Sunday.

...
https://www.geo.tv/latest/469261-th...ah-predicts-as-govt-struggles-to-win-over-imf
 
GOVT REVISES UP ISLAMIC NAYA PAKISTAN CERTIFICATES’ RATES OF RETURN

The federal government on Tuesday revised up the rates of return for various currencies denominated Islamic Naya Pakistan Certificates over different maturities.

According to a notification issued by the Finance Division, the rate of return for US dollar denominated Islamaic Naya Pakistan Certificates (INPCs) with maturity of three months has been revised up from previous 5.5 percent to 7.00pc while that with maturity period of six month has been raised from 6.00pc to 7.20pc.

The rate of return for a period of one year has been revised up from 6.5pc to 7.5pc while that for a period of three years and five years has been increased to 8pc whereas the previous rate of return was 6.75% and 7.00% respectively.

Meanwhile, the rate of return for PKR denominated Islamic Naya Pakistan Certificates with maturity of three months has been revised up from previous 9.50 percent to 15.0pc while with maturity period of six month has been raised from 10.00pc to 15.25pc.

...
https://arynews.tv/govt-revises-up-islamic-naya-pakistan-certificates-rates-of-return/
 
Bloomberg article:

==

As Pakistan lurches from one crisis to another, citizens are taking to the streets to protest a duel economic and political meltdown with little precedent in the nation's post-independence history.

For months, the world's fifth most populous country has edged closer to a debt default, echoing the cautionary tales of other developing economies, including Sri Lanka and Venezuela. Inflation is at a 48-year high. Foreign currency reserves cover less than a month of imports. The bill for billions in damage from last year's devastating floods continues to sting, highlighting the financial consequences of a warming planet.

Talks for bailout money from the International Monetary Fund failed to yield a deal this week and will continue, providing no immediate reprieve. However, the amount on the table — part of a $6.5 billion loan program — is still far from enough to replenish Pakistan's depleted coffers.

Fighting between Prime Minister Shehbaz Sharif's government and Imran Khan, the ousted former leader, has cleaved the country. National elections expected in the second half of 2023 could turn messy. And a recent suicide bombing in the city of Peshawar killed more than 100 people, illustrating the risks of Islamabad's continued links to the Taliban, who've tightened their control in neighboring Afghanistan.

To understand the crisis, Bloomberg News spoke to Pakistanis across the country. Here are their stories:

Muhammad Rashid, restaurateur

In Karachi, a bustling port city, surging inflation has battered local businesses. Muhammad Rashid, the owner of Rashid Seafood, said sales at his restaurant are down 50% this winter.

Middle class customers, in particular, are staying away — bringing into focus sharpening inequality as the prices of staples such as bread and meat jump.

“Now, our customer base is mostly from the business class,” Rashid said. “The rich are having no problem and continue to come here and eat seafood.”

Irfan Ali, gas station manager

Diesel is another sore spot in Pakistan. The government raised prices last month to over 262 rupees per liter, leading many to cut back on commuting.

The lanes are emptier at Total Parco Pakistan Ltd., a gas station in a busy part of Karachi. Irfan Ali, the manager, said he used to sell 15,000 liters a day when petrol went for 200 rupees a liter. Now, with the fuel at almost 250 rupees a liter that number is down to 13,000. He said competition for business is fierce.

“We are managing from our margins, so we don't lay off any of our staff,” Ali said. “Inflation will increase unemployment for sure.”

Farzana, housekeeper

Many ordinary Pakistanis are taking out loans to afford basic necessities.

Farzana, who works as a maid in one of Karachi's poshest neighborhoods, said she's been forced to borrow 5,000 rupees a month to keep up with a surge in the cost of living.

Her electricity and gas bills have doubled and a recent gallbladder surgery cut into the family's savings. To meet monthly expenses, Farzana's 16-year-old son took a job at a restaurant and stopped attending school.

“Life has become very tough, but what can one do?” Farzana said. “I have even sold all my jewelry to manage our house expenses.”

Mohammad Rashid, farmer

In rural parts of the country, farmers have weathered especially heavy losses, as high fuel and electricity costs cut into their profits.

Mohammad Rashid, who grows wheat, sugarcane, pulses and cattle fodder on a small 20-acre farm in Punjab's Khushab district, said labor costs have increased enormously over the last couple of years.

Last summer, flooding killed more than 1,300 people in another part of Pakistan, causing more than $30 billion in damage.

Officials have pushed wealthier nations to cover the bill. Pakistan is classified as the world's eighth most vulnerable country to climate change, but it contributes just 1% to global emissions.

“We don't have enough to spend on food,” Rashid said. “So how can we manage things like clothes, education, electricity?”
 
PUNJAB FLOUR MILLERS OBSERVE STRIKE FROM TODAY

Punjab Flour Mills Association is observing a strike for an indefinite period from today (Monday), halting sup*plies to the market from Feb*ruary 14, ARY News reported.

On Sunday, the Punjab flour millers announced to go on strike from Monday against the suspension of the wheat quota of over 100 flour mills by the province’s food department.

The differences between the flour mills association and the Punjab food department have intensified after the govt’s move of suspending the wheat quota.

Chairman Punjab Flour Mills Association in his statement said the flour mills will not receive wheat from govt quota from today, while the provision of cheaper flour to the market will be halted.

The association chairman also asked the food department to provide proofs about black sheep in their ranks.

...
https://arynews.tv/punjab-flour-millers-observe-strike-from-today/
 
In midnight offensive, govt raises GST to 18%
FED on cigarettes hiked by 153% after President Alvi declines to issue ordinance

The government on Tuesday increased the general sales tax (GST) rate to 18% and drastically enhanced taxes on cigarettes with immediate effect to collect Rs115 billion out of the planned Rs170 billion mini-budget.

The federal cabinet took the step to implement another condition set by the International Monetary Fund (IMF) for the revival of the derailed $6.5 billion programme after President Arif Alvi refused to promulgate an ordinance sent by the government.

But the global lender will accept only permanent tax measures, which the government will ensure by getting the nod of parliament.

While exercising its administrative authority, the federal cabinet increased the GST rate by 1% to 18% and also enhanced the federal excise duty (FED) rates on cigarettes to give effect to Rs115 billion new taxes from midnight, Finance Minister Ishaq Dar told The Express Tribune after the cabinet meeting.

It is for the first time ever, the government made a real dent to the tobacco sector by massively increasing the taxes on cigarettes.

The Federal Board of Revenue (FBR) notified the FED increase on expensive brands from Rs6.5 per cigarette to Rs16.5 – an increase of 153%. For less expensive brands, per stick increase is from Rs2.55 to Rs5.05 – an increase of 98%.

...
https://tribune.com.pk/story/2401280/in-midnight-offensive-govt-raises-gst-to-18
 
FBR aims to buy 155 luxury vehicles
Plans to make purchase from World Bank’s $400m revenue raising project

Disregarding the prime minister’s austerity policy, the Federal Board of Revenue (FBR) has planned to buy 155 luxury vehicles, at a cost of over Rs1.6 billion, in the name of taxpayers’ facilitation out of a foreign loan meant to upgrade its obsolete information technology system.

The estimated cost of Rs1.63 billion for the purchase of vehicles is equal to 8.6% of the funds that the FBR had secured for the upgradation of its obsolete hardware and software, showed official documents. The more glaring aspect of the plan is that a World Bank loan will be used to buy these vehicles in the name of taxpayers’ facilitation.

A couple of years ago, the FBR suffered one of the worst-ever data hacking incidents in its history – and yet, it has not been able to upgrade its data network.

Details show that the FBR has submitted documents to the Ministry of Planning for the Investment Project Financing (IPF) component, worth Rs19.6 billion, under the World Bank’s $400 million Pakistan Raises Revenue project.

A deeper dive into these documents revealed that the FBR is going to procure 155 vehicles of 1,500 cc to 3,000 cc – the engine capacity that the FBR itself has described as ‘a luxury’ and being subject to heavy taxation. The FBR has not explained the make of the vehicles in the documents.

According to details, of the Rs19.6 billion that the FBR has demanded, a big chunk of Rs1.63 billion or 8.6% will be spent on buying these vehicles. In a meeting held recently, however, the planning ministry opposed the purchase. Another meeting to acquire the ministry’s approval ahead of the Central Development Working Party (CDWP) meeting will take place today (Thursday).

The FBR has estimated each vehicle to cost about $47,000 or Rs10.3 million, at the old exchange rate of Rs220 to a dollar. After the rupee devaluation, and recent increase in prices by car assemblers, the total cost of the purchase might exceed much more than even Rs1.63 billion.

Prime Minister Shehbaz Sharif has announced plans to implement an austerity policy due to the pressing economic conditions in the country. While Finance Minister Ishaq Dar, on Wednesday, announced a Rs170 billion mini-budget, his revenue arm seems to be keen on purchasing cars and using taxpayer money for its personal benefits.

...
https://tribune.com.pk/story/2401447/fbr-aims-to-buy-155-luxury-vehicles
 
Rs170b mini-budget approved
Senate panel endorsed budget with razor-thin 3-2 majority, gave suggestions

A Senate panel on Thursday endorsed the Rs170 billion mini-budget with a razor-thin 3-2 majority but recommended the government reduce the proposed federal excise duty rates on juices by half aimed at addressing the concerns of the industry.

The Senate Standing Committee on Finance also opposed a move to give authority to the Federal Board of Revenue (FBR) to increase the tax burden through notifications without first seeking approval from the Parliament.

Pakistan Peoples Party (PPP) Senator Saleem Mandviwalla chaired the meeting and admitted that the supplementary finance bill “will only burden the taxpayers,” proposing the government take measures to bring non-taxpayers under the ambit of the FBR.

Only three committee members attended the meeting in addition to the chairman. The committee approved the bill with a 3-2 majority, as the Pakistan Tehreek-i-Insaaf (PTI) Senator Mohsin Aziz opposed the mini-budget with some modifications.

Finance Minister Ishaq Dar had tabled the Finance Bill in the National Assembly (NA) a day earlier with an aim to get the NA’s approval to the budget being introduced as part of the understanding with the International Monetary Fund (IMF).

...
https://tribune.com.pk/story/2401628/rs170b-mini-budget-approved
 
Pakistan has defaulted, says minister
Defence minister says all the solutions to country's problems lie within the country and not with the IMF

As Pakistan grapples with the economic crisis, Defence Minister Khawaja Asif said on Saturday that the cash-strapped nation had “already defaulted” and everyone, including the establishment, bureaucracy and politicians, was responsible for it.

The senior Pakistan Muslim League-Nawaz (PMLN) leader, while addressing a convention at a private college in Sialkot, stressed: “The country has defaulted. We live in a state that has defaulted.”

The defence minister said all the solutions to the nation’s problems lie within the country and not the IMF — whose crucial $1.1 billion loan Pakistan is desperately trying to secure. He said that everyone, including the establishment, bureaucracy and politicians, are to blame for the current economic mess as the law and Constitution are not followed in Pakistan.

Pakistan’s economy is in dire straits, stricken by a balance-of-payments crisis as it attempts to service high levels of external debt amid political chaos and deteriorating security. Inflation has rocketed, the rupee has plummeted and the country can no longer afford imports, causing a severe decline in the industry.

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

...
https://www.thenews.com.pk/print/1042138-pakistan-has-defaulted-says-minister
 
Deeper and deeper we go.

<blockquote class="twitter-tweet" data-partner="tweetdeck"><p lang="en" dir="ltr">Rupee slaughtered - lost over 62% or 110/$ in 11 months of PDM. This has increased public debt alone Rs 14.3 trn & historic 75 yr high inflation 31.5%. Pakistanis paying heavy price of regime change conspiracy where a bunch of criminals have been foisted upon nation by ex COAS. <a href="https://t.co/xVkqxg6IN6">pic.twitter.com/xVkqxg6IN6</a></p>— Imran Khan (@ImranKhanPTI) <a href="https://twitter.com/ImranKhanPTI/status/1631217422849003521?ref_src=twsrc%5Etfw">March 2, 2023</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
 
MenInG said:
Deeper and deeper we go.

<blockquote class="twitter-tweet" data-partner="tweetdeck"><p lang="en" dir="ltr">Rupee slaughtered - lost over 62% or 110/$ in 11 months of PDM. This has increased public debt alone Rs 14.3 trn & historic 75 yr high inflation 31.5%. Pakistanis paying heavy price of regime change conspiracy where a bunch of criminals have been foisted upon nation by ex COAS. <a href="https://t.co/xVkqxg6IN6">pic.twitter.com/xVkqxg6IN6</a></p>— Imran Khan (@ImranKhanPTI) <a href="https://twitter.com/ImranKhanPTI/status/1631217422849003521?ref_src=twsrc%5Etfw">March 2, 2023</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Delusional PDM supporters still think it's PTI policies which brought Pak here. They will blame everyone except their dheet leaders

https://www.dawn.com/news/1740095

Most of the insiders Dawn spoke to saw a link between the country’s political situation and economic instability. They had hoped that Wednesday’s Supreme Court decision would diffuse the situation, leading ultimately to elections and a stable government that the IMF and other financial institutions felt comfortable with.

“But this did not happen. Nothing seems to work. And this is hurting the national economy,” one of them said.
 
Within two hours of being posted Maryam, whose party was in power for the last nine months, took to Twitter to respond. “Mighty audacious of you to criticise those who’re undoing your mess created through ruthless plunder, incompetence, misplaced priorities, cruel deal that you stuck with the IMF and then its breach that plunged the country into economic turmoil, so sit down.”

Hitting out at the judiciary, she wrote: “Let’s not forget to thank all those for this mayhem who handpicked and fed you for four years, as well as the remnant of their influence in judiciary that you are now banking on. Won’t let that happen.”

In the light of the recent Supreme Court’s decision that had foiled government’s attempt to delay the elections in K-P and Punjab, it seems that Maryam’s tweet also indicates a revolt against the decision.

Her party in power since the announcement of the court order has been trying to cast doubt over the actual decision, by drawing a wishful interpretation of the court order.

Iqbal in his tweet blamed the recent SC verdict for the rupee devaluation. Former PML-N finance minister Miftah Ismail talking to a TV channel minced no words in blaming incumbent finance czar Ishaq Dar’s ambivalence approach in dealing with the IMF.

He said that the situation in the country would have been much better if the IMF conditions were implemented late last year.

Dar also took to Twitter to reply to the PTI chief’s remarks. “Imran Khan, you alone are responsible for this economic disaster. You brought Pakistan to the brink of economic collapse, but Allah saved Pakistan from you. We are trying our best to fix the damage caused by you. Nation will get good news soon, Inshallah.”

Dar immediately after taking charge of the finance ministry, elbowing out Miftah Ismail from office, made tall and pompous claims regarding his experience and abilities in dealing with the IMF. He had vowed to bring the dollar under Rs200, which now was touching a scary high of Rs300. He had also ensured the country of his ability to wrestle with the IMF. However, Dar was not alone in making such tall claims prior to ousting the PTI government, PM Shehbaz Sharif, too, promised to turn the economic situation of the country around in six months.

Express Tribune
 
Govt to borrow Rs7tr from banks in three months
Rs5.5 trillion to be used to return old maturing debt

The cash-strapped government has planned to pile up debt by a net Rs1.5 trillion in three months (March-May 2023) mainly to make the ever-growing interest payment on debt, finance loss-making State-Owned Entities (SOEs) and pay monthly salaries and pensions among other expenditures.

In gross, the government is targeting to borrow almost Rs7 trillion from commercial banks in the next three months. A big chunk of around Rs5.5 trillion will be used to return old maturing debt. Speaking to The Express Tribune, Arif Habib Limited Head of Research, Tahir Abbas said, “The government’s reliance on domestic debt is on the rise – especially to meet its growing budgeted-expenditure (fiscal deficit) after foreign financing dried up in wait of the International Monetary Fund (IMF)’s programme being revived.

“Debt servicing (interest payment on debt) has become one of the single largest heads of government expenditures,” added Abbas. Global rating agency, Moody’s Investors Service said in late February that “Pakistan has very weak debt affordability (foreign debt in particular). Moody’s estimates that interest payments will increase to around 50% of government revenue in fiscal 2023.”

“The government has budgeted interest payments at Rs3.9 trillion (4.7% of the GDP) for the current fiscal year 2023. It is anticipated to grow to around Rs5.5 trillion (6.5% of the GDP) in the year,” observed Abbas, adding that the aggressive hike of 300bpts in the central bank’s key policy rate in March inflated the size of the interest payment.

...
https://tribune.com.pk/story/2405666/govt-to-borrow-rs7tr-from-banks-in-three-months
 
Cabinet members shy away from austerity plan

Despite a strict austerity policy announced by Prime Minister Shahbaz Sharif last month, his cabinet colleagues and subordinate senior officers have given a hoot to the fiscal restraint measures.

A meeting of the monitoring committee on implementation of austerity measures presided over by Finance Minister Ishaq Dar was informed that more than half of the luxury vehicles given to cabinet members, parliamentary secretaries and chairmen of standing committees had not been returned to the cabinet division that maintains the federal government’s central pool.

Not staying behind, many senior bureaucrats were also using official sports utility vehicles (SUVs) and sedan cars above 1800cc despite the austerity policy approved by the federal government in February. The policy has not even impressed the senior judiciary and parliamentary forums, noted the meeting that did not discuss implementation of austerity measures in the armed forces.

Takht-i-Babri workshop

Separately, the petroleum division has rather gone a step further by convening a three-day retreat at the historic Takht-i-Babri (Kallar Kahar) for a workshop on “Strategic Roadmap for Petroleum Sector”.

It has called between 40-80 of the who’s who of the public sector’s oil and gas entities and companies to fly in from as far as Karachi and Quetta while from Islamabad the entire petroleum division and its attached departments would participate.

To spread out the expenditure, all the executives have been asked to spend out of their respective entities’ accounts for air-travel, logistic support and accommodation.

Petroleum division spokesperson retired Captain Shahbaz confirmed that the strategic roadmap development workshop would be a closed event by invitation to petroleum division organisations.

...
https://www.dawn.com/news/1742075/cabinet-members-shy-away-from-austerity-plan
 
Chinese bank to 'refinance $500m loan'

Pakistan seeks assurances from friendly nations to unlock IMF loan.
An official from Finance Division says Chinese loan will come soon.
Chinese banks have provided re-financing of $1.2bn in commercial loans.
ISLAMABAD: A Chinese bank has assured Pakistan it will provide another refinanced $500 million loan within the next few days, bringing the total of commercial loans up to $1.7 billion out of the total committed amount of $2 billion, The News reported Thursday.

The Pakistani authorities are running from pillar to post to get 100% confirmation from friendly donor countries and multilateral creditors before moving toward striking a staff-level agreement with the International Monetary Fund (IMF).

It was the unwritten condition of the IMF that Pakistan must secure the refinancing of commercial loans as well as a rollover on deposits from China during the programme period, which is scheduled to expire in June 2023.

“Another $500 million commercial loan is coming from a Chinese bank,” a top official of the Finance Division confirmed on Wednesday and added that it would be done soon.

Chinese banks have already provided re-financing of $1.2 billion in commercial loans in the past few weeks, and now Beijing has given an assurance on another $500 million in loan re-financing in the next few days.

It is relevant to mention that Pakistan had also requested to grant rollover on the Chinese SAFE deposit of $2 billion within the ongoing month.

...
https://www.geo.tv/latest/476595-chinese-bank-to-refinance-500m-loan
 
Does anyone have the slightest of idea how these loans will be repaid?
 
Govt vows no compromise on nukes amid IMF deal delay

• Dar says nobody can dictate what missiles, N-weapons Pakistan should have
• Rabbani laments Senate not taken into confidence on IMF conditions
• Shehbaz admits tough decisions led to unrelenting inflation

ISLAMABAD: The premier and the finance minister asserted on Thursday that there would be “no compromise” on the country’s nuclear and missile programme and they are “jealously guarded by the state”.

The statements from the top came amid concerns raised by some quarters after the visit of the International Atomic Energy Agency’s (IAEA) head to Pakistan last month and the government’s failure to strike a deal with IMF to resume a stalled loan programme, which would offer a critical lifeline to avert an economic meltdown.

A statement issued by the Prime Minister’s Office on Thursday noted that press releases, queries and various assertions regarding Pakistan’s nuclear and missile programme were being circulated on social and print media.

Even a “traditional routine visit” of IAEA Director General Rafael Mariano Grossi was portrayed in a “negative spotlight”, it said.

“It is emphasised that Pakistan’s nuclear and missile programme is a national asset, which is jealously guarded by the state. The complete programme is totally secure, foolproof and under no stress or pressure whatsoever,” the statement said.

“It continues to fully serve the purpose for which this capability was developed,” it added.

...
https://www.dawn.com/news/1742660/govt-vows-no-compromise-on-nukes-amid-imf-deal-delay
 
Cost of debt servicing up to Rs3.18tr
Spending exceeds government’s net income, highlights need for debt restructuring

Debt servicing expenses peaked to Rs3.18 trillion during the first eight months of the current fiscal year – exceeding the federal government’s net income – underpinning the urgent need for debt restructuring to create the fiscal space required for other expenditures and to avoid default.

The federal fiscal operations details also revealed a Rs20 billion discrepancy in the tax collection claimed by the Federal Board of Revenue (FBR) for the July-February 2022-23 period, according to finance ministry sources.

According to the sources, the FBR reported Rs4.493 trillion tax collection till February – a figure that is Rs20 billion higher than provisionally reconciled by the Accountant General of Pakistan Revenue (AGPR).

After adjusting for the discrepancy, the tax shortfall during the first eight months of the current fiscal year stands at Rs232 billion.

...
https://tribune.com.pk/story/2406940/cost-of-debt-servicing-up-to-rs318tr
 
PM SHEHBAZ SHARIF ORDERS NO LOAD-SHEDDING DURING SEHR, IFTAR

Prime Minister (PM) Shehbaz Sharif has directed to ensure uninterrupted power supply in Ramazan, especially at Sehr and Iftar time, ARY News reported on Wednesday.

Following the directions from the PM, Minister for Power Khurram Dastagir has asked the power supply companies to ensure uninterrupted power during Sehar and iftar time.

“There will be zero-load management before and after one hour of Sehr,” the minister directed the DISCOs. Furthermore, the power companies have been asked to ensure power supply before an hour of Iftar and after three hours of Iftar so that people can perform Tarwaeh prayers.

The power companies have also been directed to constitute special teams at the division and sub-divisions level to address power-related issues during Ramazan.

...
https://arynews.tv/pm-shehbaz-sharif-orders-no-load-shedding-during-sehr-iftar/
 
Cash margin removal to lift industry
Businessmen welcome scrapping of 100% cash margin requirement

The Lahore Chamber of Commerce and Industry (LCCI) on Saturday welcomed the removal of cash margin requirement on the import of goods, terming it a step in the right direction.

In a statement, LCCI President Kashif Anwar, Senior Vice President Zafar Mahmood Chaudhry and Vice President Adnan Khalid Butt said that due to the measures taken by the government and the State Bank of Pakistan (SBP) to minimise imports, the industry was facing shortage of raw material, machinery and other inputs, which was affecting all sectors.

They said that industries and businesses were also experiencing shortage of funds due to the condition of 100% cash margin but “now the situation will take a positive turn”.

“Removal of cash margin will support ease of doing business. The government should also eliminate regulatory duty, customs duty and additional customs duty on essential raw material,” they demanded.

The LCCI office-bearers stressed that the issues of pending tax refunds and multiple audits should also be resolved besides reducing the rate of withholding tax on businesses.

“Our industries are facing problems like high policy rate, which has reached 20%, and high energy costs, due to which business costs have increased a lot,” the statement said.

“We have always insisted on widening the tax base and suggested to the government to immediately announce a declaration scheme so that the undeclared foreign reserves can become part of our economy.”

Apart from that, they said, taxpayers had to undergo multiple audits of income and sales tax. “We appeal to the government that the number of audits should be reduced.”

Existing taxpayers have to bear the burden of all audits, penalties, surcharges, inquiries, statements, returns, penalty for late filing of statements/income tax returns and many other problems.

...
https://tribune.com.pk/story/2408168/cash-margin-removal-to-lift-industry
 
ECC defers handing over airports to foreign country
Clears Rs6.2b payment as part of Reko Diq mines settlement deal

The government on Monday did not endorse an advisory service agreement with an arm of the World Bank Group for handing over Pakistan’s three international airports to a foreign country due to objections raised by some cabinet members.

The Economic Coordination Committee (ECC) of the Cabinet, which deferred the approval of the agreement, cleared Rs6.2 billion payment as part of Reko Diq mines settlement deal.

It also authorised to take Rs65 billion loan to make share payments by the federal government on behalf of the Balochistan government. Finance Minister Ishaq Dar presided over the ECC meeting.

“The ECC deferred a summary of the Ministry of Aviation on engagement of International Finance Corporation (IFC) as transaction adviser for the outsourcing of three airports,” according to the Ministry of Finance.

In 2019, Qatar had shown interest in taking over the management, operation, and development of the New Islamabad International Airport, Lahore’s Allama Iqbal International Airport and Karachi’s Jinnah International Airport.

The aviation ministry adopted a dilly-dallying approach and was delaying the transaction under different pretexts for the past many years.

In December, Prime Minister Shehbaz Sharif instructed to hire the IFC as transaction adviser and outsource the airports in three months – a deadline that had lapsed.

The sources said that some cabinet members questioned the motive behind bringing the transaction advisory service agreement in the ECC, saying it was not the right forum.

Other members objected to certain clauses of the draft agreement.

The IFC – an arm of the World Bank Group – is being hired to prepare a transaction structure for the outsourcing of the airports at a consultancy cost of around $4 million.

...
https://tribune.com.pk/story/2408572/ecc-defers-handing-over-airports-to-foreign-country
 
Gallup Pakistan Survey: 73pc complain of dwindling savings amid inflation

The high cost of living has badly affected the saving ability of Pakistani citizens as seven out of 10 persons are complaining of a decline in their savings.

It was revealed in a Consumer Confidence Index survey report issued by Gallup Pakistan and Dun & Bradstreet. As many as 2,000 respondents across the country participated in the survey.

The majority of the respondents expressed concern over shrinking savings in the survey due to inflation. Around 73 percent of Pakistani individuals complained of dwindling savings in the latest survey as compared to 60 percent, who were irked by reduction in savings amid crippling inflation.

Besides, those who had claimed an increase in their savings in the last survey, their rate also went down by 7 percent to 5 percent in the latest survey. Similarly, there was a 4 percent decrease in the tally of those who had said in the last survey that inflation did not cast any impact on their savings. In the latest survey, the savings of only 21 percent individuals remained unfazed of inflationary pressure.

...
https://www.thenews.com.pk/print/10...-complain-of-dwindling-savings-amid-inflation
 
At least 11 people, including three children, were killed in a stampede at a private charity distribution site for food ration in Karachi’s SITE industrial area on Friday, one of several such incidents in recent weeks as the population struggles with rising inflation in the country.

Rescue workers told The Express Tribune that several people, including women and children, also fell unconscious during the stampede at the ration distribution centre.

==

This is pretty shameful - May ALLAH grant Jannat Al Firdous to the deceased
 
Thousands of jobs at stake as phone makers in Pakistan close shop

Almost all of the country’s 30 mobile phone assembly units, including three run by foreign brands, have shut down as manufacturers say they have run out of raw material amid import restrictions, putting the future of some 20,000 employees at stake.

Most companies have furloughed employees after paying them half of their April salaries in advance. They have been told that they will be called back as soon as production resumes.

Talking to Dawn, a mobile phone manufacturer expressed sorrow that the companies had to send employees home in Ramazan.

“My family has three mobile production units, and all are closed,” he said and pinned the blame on “incompetent and strange policies” of the finance ministry.

He was referring to government policies that have made it difficult for an importer to get a letter of credit (LC) — a document from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. This has stopped the imports of key equipment and components used in mobile phone manufacturing.

...
https://www.dawn.com/news/1745434/thousands-of-jobs-at-stake-as-phone-makers-in-pakistan-close-shop
 
Five more injured in scuffle at flour distribution centre in Punjab

TOBA TEK SINGH: Five persons, including a woman, were injured when a scuffle broke out at the free wheat flour distribution centre in Shorkot while the people blocked a road in protest against non-availability of flour in Muzaffargarh on Saturday.

On the other hand, Punjab Caretaker Information Minister Aamir Mir has termed the reports of deaths during the flour distribution mere propaganda of the Pakistan Tehreek-i-Insaf (PTI). He said the claim of death of dozens of people during the distribution of flour was nothing but mischief but added that the lives of three valuable people were unfortunately lost due to the rush and an inquiry was going on into the matter.

In Shorkot, there was a heavy rush of free flour seekers located at the Government Elementary School in Shorkot Cantt. The scuffle occurred between policemen and the people, leading to a stampede-like situation.

As a result, five persons received injuries. They were given first aid at Shorkot Rafiqui Welfare Hospital. A man received stitches on his foot that was cut during the disorder.

...
https://www.dawn.com/news/1745423/f...cuffle-at-flour-distribution-centre-in-punjab
 
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Pakistan makes inadequate investments in human capital: WB <a href="https://t.co/3ihJv3kq4f">https://t.co/3ihJv3kq4f</a><br>These are the REAL issues of my country, but they have taken a remote back seat in the current hysteria. Institutional & political leadership owes it to the nation to sober up, unite & deliver.</p>— Dr. Arif Alvi (@ArifAlvi) <a href="https://twitter.com/ArifAlvi/status/1642784043866664962?ref_src=twsrc%5Etfw">April 3, 2023</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
 
Centre spends ‘Rs710b’ on devolved ministries
WB says despite fiscal crunch huge spending contributing to higher public debt

Amid severe fiscal constraints, the federal government is still spending over Rs710 billion every year by retaining 17 devolved ministries and financing development projects in areas that under the Constitution fall in the provincial domain, said the World Bank.

The huge spending is contributing to higher public debt besides keeping many initiatives of the Centre under-funded.

Before the devolution, the federal government was spending 0.39% of the GDP on the 17 ministries that were subsequently devolved to the provinces under the 18th Amendment in the Constitution.

However, after some time, the PPP government and its successive ones, revived all those ministries – a move that is now resulting in a duplication of the expenditures.

The spending on these 17 ministries has increased to 0.59% of the GDP or Rs328 billion per annum as of last fiscal year, said Derek Chen, a senior economist working with the World Bank.

In its recent publications, the World Bank has advised the federal government to realign its expenses only to those subjects, which under the Constitution were its responsibility.

Under the 18th Amendment in the Constitution, the Centre had increased the provincial share by 11% to 57.5% of the federal divisible pool on the grounds that the transfer of the new subjects to the provinces would need additional resources.

However, over the period of time, all these ministries were revived to accommodate ministers and bureaucrats.

...
https://tribune.com.pk/story/2410221/centre-spends-rs710b-on-devolved-ministries
 
Investors withdraw $190m in Feb
Pull out capital from national saving schemes due to uncompetitive rate of return

Investors in Pakistan have been aggressively withdrawing investments from various national saving schemes due to significantly low rates-of-return (RoR) compared to the ones offered by banks on fixed investments. The State Bank of Pakistan (SBP) reported on Wednesday that investors withdrew Rs32.38 billion ($190 million) from saving schemes alone in February 2023, with a total disinvestment of Rs285.73 billion ($1.7 billion) in the first eight months (Jul-Feb) of the current fiscal year 2023.

Speaking to the Express Tribune on the condition of anonymity, a Central Directorate of National Savings (CDNS) official said, “Who will invest in national saving schemes at the prevailing RoR at around 12% compared to 22% on three-month T-bills (the government debt instrument)? The rate of return has become uncompetitive… it has gone dead.”

Additionally, the government also deducts 30% tax on profit from the saving schemes from non-filers, he said.

The CDNS reported that it is offering RoR in the range of 12.26% to 14.16% on saving schemes, including Defence Saving Certificates (DSC), Behbood Savings Certificates (BSC), Shuhadas Family Welfare Account (SFWA), and Regular Income Certificates (RIC). The CDNS is also offering profit in the range of 16.12% on investment in three-month Short-Term Savings Certificates (STSC), 16% on six-month paper, and offers 15.96% RoR on 12-month STSC.

...
https://tribune.com.pk/story/2410102/investors-withdraw-190m-in-feb
 
As a die hard PML-N supporter, I accept the bitter fact that our government has not performed up to the mark.

But I want people to understand the major reason this is happening. The IMF is not willing to give us a bailout package because of the previous Imran Khan government pulling out of their commitments. Our budget cannot run without the IMF loan amount.

We have little to no foreign exchange reserves. Whilst yes the PDM have not been able to find a solution, Imran also has a major hand in this economic crisis.
 
Sher Khan said:
As a die hard PML-N supporter, I accept the bitter fact that our government has not performed up to the mark.

But I want people to understand the major reason this is happening. The IMF is not willing to give us a bailout package because of the previous Imran Khan government pulling out of their commitments. Our budget cannot run without the IMF loan amount.

We have little to no foreign exchange reserves. Whilst yes the PDM have not been able to find a solution, Imran also has a major hand in this economic crisis.
Click to expand...

Fact is no foreign govt or institution trusts some of the people in PML-N. This to me is the main reason.
 
MenInG said:
Fact is no foreign govt or institution trusts some of the people in PML-N. This to me is the main reason.
Click to expand...

Even a bigger reason, maybe if the PDM head honchos and their handlers had NOT stolen all the money or mismanaged it since the 90s, we would not be in this situation.
 
Stewie said:
Even a bigger reason, maybe if the PDM head honchos and their handlers had NOT stolen all the money or mismanaged it since the 90s, we would not be in this situation.
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How long did PML-N consecutively rule over Pakistan from 90s to present? Can't look much into it when the military establishment was quick to throw down governments every 2-3 years.
 
Sher Khan said:
How long did PML-N consecutively rule over Pakistan from 90s to present? Can't look much into it when the military establishment was quick to throw down governments every 2-3 years.
Click to expand...

But they were part of the establishment, created by the establishment as their front, Just ask BB in the late 80s or the mid 90s, Do they not count. Only in Mushs era can you argue they fell out
 
Sher Khan said:
How long did PML-N consecutively rule over Pakistan from 90s to present? Can't look much into it when the military establishment was quick to throw down governments every 2-3 years.
Click to expand...

Still much much longer than PTI government which you were quick to blame, werent you? So why does it hurt so bad when others blame your party which is not even a blame, its basically facts. HEard of PAnama Leaks?
 
TERF facility offered under Imran govt : NA panel asks SBP for list of 600 people who got $3bn loans at zero markup

The National Assembly’s Standing Committee on Finance was told on Thursday that $3 billion were given out as interest-free loans in the last government’s tenure.

The revelations were made in a meeting of the committee which State Bank of Pakistan (SBP) Deputy Governor Dr Inayat Ullah also attended. The committee chairman said that the loans were issued by the SBP and claimed that the bank had a list of people the money was given.

Ruling party MNA Barjees Tahir raised the issue and sought to furnish details of 600 borrowers who secured such facility. However, the deputy governor said that the loans were issued by commercial banks under the Temporary Economic Refinance Facility (TERF) during the Covid-19 pandemic.

He also added that the loans had been given to the business community because investment had dipped during the pandemic.

Dr Nafisa Shah also asked the deputy governor to provide the terms of the loans that had been given but he declined, saying that the information was confidential and banks are bound to keep it secret.

State Minister for Finance Aisha Ghaus Pasha said that the details could be revealed in an in-camera session. Committee Chairman Qaiser Sheikh, therefore, directed the deputy governor to give a detailed briefing on the matter.

On the occasion, Forex Dealers Association’s Chairman Malik Bostan said that the biggest problem of the country was a scarcity of dollars and said that they came up to help the government in this regard through an agreement.

Such an arrangement was done in 1998 after the country faced a similar challenge following the nuclear explosions. He said that they were giving $400 million each month and could increase the amount up to $1 billion besides providing dollars to the general public. Pakistan is not getting compensation for being a calamity-hit country and has so far received only $800 million out of the total pledges made by the donors.

...
https://www.thenews.com.pk/print/1058021-600-persons-given-3bn-interest-free-loans-during-imran-govt
 
Business confidence continued its slide in the first three months of 2023 amid multiple economic crises, according to the latest edition of the Gallup Business Confidence Index released on Friday.

“Last year’s political instability has carried over to combine with various economic crises and exacerbated business insecurity,” the report said.

Wave-9 of the survey is based on interviews with around 520 business owners conducted in the first quarter of 2023 across Pakistan. The exercise consisted of three broad strands, namely the current business situation, the future business situation and the direction of the country. Index values dropped on a quarter-on-quarter basis to an all-time low in each of the three strands.

Two-thirds of the businesses surveyed said they faced bad or worse conditions than before. There was a seven per cent increase in the number of businesses reporting “very bad” business conditions. With a fall of one percentage point from the preceding quarter, the Current Business Situation Score clocked in at -32pc.

DAWN
 
IMF slashes Pakistan’s growth outlook to 0.5pc

Hinting at entre*nched high inflation, the International Monetary Fund (IMF) on Tuesday lowered its forecast for Pakistan’s economic growth rate for the current fiscal year to just 0.5 per cent, with inflation going beyond 27pc and the unemployment rate increasing to 7pc.

This showed an unambiguous deterioration of economic fundamentals over the last six months since October when the Fund forecast the country’s gross domestic product to grow by 3.5pc against 6pc for 2022 ago and inflation at 20pc against 12.1pc last year amid a slowdown in the global economy and devastating effects of floods.

Meanwhile, global headline inflation is set to fall from 8.7pc in 2022 to 7pc in 2023 on the back of lower commodity prices, but core inflation — excluding the volatile energy and food components — is likely to decline more slowly, the IMF said.

The revision in Pakistan’s growth prospects is in line with similar 0.4pc and 0.6pc projected last week by the World Bank and the Asian Development Bank, respectively. They also projected inflation at 29.5pc and 27.5pc, respectively, for the current year.

...
https://www.dawn.com/news/1747207/imf-slashes-pakistans-growth-outlook-to-05pc
 
daytrader said:
IMF slashes Pakistan’s growth outlook to 0.5pc

Hinting at entre*nched high inflation, the International Monetary Fund (IMF) on Tuesday lowered its forecast for Pakistan’s economic growth rate for the current fiscal year to just 0.5 per cent, with inflation going beyond 27pc and the unemployment rate increasing to 7pc.

This showed an unambiguous deterioration of economic fundamentals over the last six months since October when the Fund forecast the country’s gross domestic product to grow by 3.5pc against 6pc for 2022 ago and inflation at 20pc against 12.1pc last year amid a slowdown in the global economy and devastating effects of floods.

Meanwhile, global headline inflation is set to fall from 8.7pc in 2022 to 7pc in 2023 on the back of lower commodity prices, but core inflation — excluding the volatile energy and food components — is likely to decline more slowly, the IMF said.

The revision in Pakistan’s growth prospects is in line with similar 0.4pc and 0.6pc projected last week by the World Bank and the Asian Development Bank, respectively. They also projected inflation at 29.5pc and 27.5pc, respectively, for the current year.

...
https://www.dawn.com/news/1747207/imf-slashes-pakistans-growth-outlook-to-05pc
Click to expand...

Yeah but Imran Niazi is evil and Bilawal and erm..Look youre a traitor so there..
 
An International Monetary Fund (IMF) report has revealed that Pakistan will miss the fiscal and debt reduction targets of this fiscal year and the situation will become worse in the next fiscal year with a budget deficit peaking at 8.3% of the size of the nation’s economy.

The Fiscal Monitor report, released on the side-lines of the IMF Spring Meetings, showed that Pakistan will miss all targets related to the reduction of the budget deficit, gross public debt, and expenditures and increasing revenues during FY2022-23 and FY2023-24.

Compared to an eight-month-old assessment of booking a budget deficit of 4.7% of the GDP, the Fiscal Monitor report showed that the deficit may widen to as high as 6.8% by June this year. There is a slippage of 2.1% of the GDP or Rs1.8 trillion, underscoring the poor performance of the incumbent government.

This also puts a question mark on the performance of the $6.5 billion Extended Fund Facility whose objectives were fiscal consolidation and putting the country on a sustainable path towards debt reduction.

The IMF report further showed that during FY2023-24, starting from July, the budget deficit can go to as high as 8.3% of the GDP. In August last year, the IMF had projected the budget deficit for the next fiscal year at 4% of the GDP. Within eight months, the IMF has shown massive deterioration in the core budget target.

Under the $6.5 billion bailout package, the IMF had targeted Pakistan achieving a primary budget surplus – a measure that shows that government revenues are higher than its expenditures excluding interest payments. The primary budget surplus had been boasted as a strategy to reduce public debt.
 
MenInG said:
An International Monetary Fund (IMF) report has revealed that Pakistan will miss the fiscal and debt reduction targets of this fiscal year and the situation will become worse in the next fiscal year with a budget deficit peaking at 8.3% of the size of the nation’s economy.

The Fiscal Monitor report, released on the side-lines of the IMF Spring Meetings, showed that Pakistan will miss all targets related to the reduction of the budget deficit, gross public debt, and expenditures and increasing revenues during FY2022-23 and FY2023-24.

Compared to an eight-month-old assessment of booking a budget deficit of 4.7% of the GDP, the Fiscal Monitor report showed that the deficit may widen to as high as 6.8% by June this year. There is a slippage of 2.1% of the GDP or Rs1.8 trillion, underscoring the poor performance of the incumbent government.

This also puts a question mark on the performance of the $6.5 billion Extended Fund Facility whose objectives were fiscal consolidation and putting the country on a sustainable path towards debt reduction.

The IMF report further showed that during FY2023-24, starting from July, the budget deficit can go to as high as 8.3% of the GDP. In August last year, the IMF had projected the budget deficit for the next fiscal year at 4% of the GDP. Within eight months, the IMF has shown massive deterioration in the core budget target.

Under the $6.5 billion bailout package, the IMF had targeted Pakistan achieving a primary budget surplus – a measure that shows that government revenues are higher than its expenditures excluding interest payments. The primary budget surplus had been boasted as a strategy to reduce public debt.
Click to expand...

No more big hoachay comments from the PDM supporters. One good thing that has come from this debacle is how so many have been exposed.
 
PTI Chairman Imran Khan said his party is developing a strategy of saving the country from default if he comes to power by negotiating with the International Monetary Fund (IMF) on a “viable way of being able to pay our debts”, it emerged on Thursday.

In an interview with the Financial Times published today, the former premier said: “We’re sitting with our economists [on] how to come up with a plan with which we can sit with the IMF and give them a viable way of being able to pay our debts.

“But at the same time, our economy should not be choked so that our ability to pay debt goes down.”

His remarks come as the country is in talks with the IMF to secure a final tranche of $1.1 billion since February, which is part of a $6.5bn bailout package.

DAWN
 
This thread title should really win the "Naivette" award if there was any such thing. All the parties that constitute PDM have individually been responsible for the current economic crisis, through their corruption and loot maar over the last 35 years. Now they have teamed up and somehow we think the results will be any better?
 
China, India , MiddleEast have indirectly helped Russia being afloat by trading with them and no wonder all of them have inflation in control down now compared to Pakistan.

Say what you want but IK’s decision to have trade with Russia was right one for his people but he got penalized by his own Establishment.
 
The International Monetary Fund (IMF) is facing a challenging question regarding whom to trust in Pakistan to revive its $7 billion loan programme for the nation.

The incumbent government, led by Finance Minister Ishaq Dar, has continued to fulfil commitments with the IMF and implement tough decisions. However, the IMF is assessing who holds power in Pakistan, not only to make future commitments but also to implement them. This has caused the loan programme to remain stalled since November 2022.

At a recent in-person and online conversation titled ‘Pakistan: Is there a way forward?’ at Princeton University, State Bank of Pakistan (SBP) Former Governor Reza Baqir expressed his concern about the IMF’s struggle to trust Pakistan’s leaders. He said, “Whatever has been said (committed with IMF) has not been delivered,” highlighting the need for reliable partners to implement necessary economic reforms.

https://tribune.com.pk/story/2412876/imf-struggles-to-find-trustworthy-partners
 
In breach of law, govt borrows Rs239bn from State Bank

In an apparent deviation from the law, the State Bank of Pakistan (SBP) is reported to have extended Rs239 billion credit to the PMLN-led coalition government in January-February to meet ballooning debt servicing requirements of the domestic commercial banks.

Under the State Bank of Pakistan Act amended in 2022 on the dictation of the International Monetary Fund (IMF), government borrowing from the central bank is prohibited. Section 9C of the law says: “Prohibition on the Government borrowing.—(1) The Bank shall not extend any direct credits to or guarantee any obligations of the Government, or any government-owned entity or any other public entity”.

An Islamabad-based economic think tank — Prime Institute (PI) — in its latest quarterly report said the government had borrowed Rs239bn from the SBP in January and February of this year as the country’s fiscal deficit overshoot amid excessive debt servicing cost of the domestic debt.

It said an excessive government footprint in the economy and public spending continued to fuel the economic crisis.

...
https://www.dawn.com/news/1748601/in-breach-of-law-govt-borrows-rs239bn-from-state-bank-think-tank
 
LAHORE (Web Desk) - The country has received $7.76 billion so far in foreign economic assistance comprising both grants and loans in the current fiscal year (2022-23).

A report titled "Disbursement Report March 2022" and compiled by the Economic Affairs Division of the Finance Ministry showed that of $7.76bn, an amount of $4.02bn has been received from multilaterals, including the Asian Development Bank (ADB) and the European Union (EU), while $1.06 billion have been given by other countries.

Per the break-up of the report, Pakistan has received $1.17bn from the International Monetary Fund (IMF) so far, followed by $1.94 billion from the Asian Development Bank (ADB) and $1,1bn from the International Development Association (a member of the World Bank).

The Asian Infrastructure Development Bank (AIDB) has provided $546.75 million.

Among friendly countries, Saudi Arabia has provided the highest amount of foreign assistance of $100 million besides an oil facility of $782.28m. China has provided $54.93m followed by Japan at $34.19m, France $28.97m and the United States at $24.27m.

The Shehbaz-led government further received $900m in loans from commercial banks and $612.3m through Naya Pakistan Certificates (NPCs.
 
PAKISTAN REPORTS CURRENT ACCOUNT SURPLUS OF $654 IN MAR 2023

Islamabad: The Current Account Balance (CAB) of Pakistan posted a massive surplus of $654 million in Mar 2023 against a deficit of $36 million in Feb 2023, ARY News reported on Wednesday, citing the State Bank of Pakistan (SBP) statement.

State Bank of Pakistan (SBP) on Wednesday announced that Pakistan’s current account surplus of $654 million in March 2023 against the deficit of $36 million in February 2023, Cumulatively Current Account Deficit (CAD) reduced to $3.4 billion in Jul-Mar FY23 against a deficit of $13.0 billion in Jul-Mar FY22.

ARY
 
BANKS TO OPEN ON APRIL 29, 30 TO FACILITATE TAX COLLECTION

All authorised branches of banks will open on April 29 and 30, 2023 (Saturday and Sunday) and observe extended working hours to facilitate the collection of taxes, ARY News reported, quoting the State Bank of Pakistan (SBP).

State Bank of Pakistan (SBP), in a statement issued here on Wednesday, informed that on the request of Federal Board of Revenue (FBR) it has been decided that all those branches of banks that remain open on Saturday including authorised branches of National Bank of Pakistan (NBP) and field offices of SBP Banking Services Corporation (SBP-BSC) shall remain open on April 29 and 30 in order to facilitate the taxpayers in payment of Government duties and taxes.

Such branches would also observe extended working hours till 06:00 p.m. to facilitate the collection of taxes through ADC’s Over-the-Counter (OTC) facility, it added.

For ensuring the same day clearing and settlement of payment instruments deposited at NBP’s authorised branches for customs collection the SBP directed National Institutional Facilitation Technologies (NIFT) to arrange special clearings at 01:00 p.m. on Saturday, April 29 and at 06:00 p.m. on Sunday, April 30 as well.

The central bank instructed all banks to keep their clearing-related branches open accordingly till such time that would be necessary to facilitate the special clearings by NIFT on April 29 and 30.

ARY
 
<blockquote class="twitter-tweet" data-partner="tweetdeck"><p lang="en" dir="ltr">Inflation stood at 12.6% when VoNC was tabled last yr. Today inflation in Pak outpaces Sri Lanka as Asia's fastest acc to Bloomberg. This imported govt has crushed the masses & esp the salaried class under record inflation in our history. Ironically their<a href="https://t.co/G0oyKHslEl">https://t.co/G0oyKHslEl</a></p>— Imran Khan (@ImranKhanPTI) <a href="https://twitter.com/ImranKhanPTI/status/1653423547287576578?ref_src=twsrc%5Etfw">May 2, 2023</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

<blockquote class="twitter-tweet" data-partner="tweetdeck"><p lang="en" dir="ltr">excuse for bringing abt regime change was to control inflation. Instead, all they have achieved is NROs for their money laundering & corruption while destroying economy & violating Constitution & all laws so that law of the jungle prevails in Pak today.<a href="https://t.co/ajPlDcuQVb">https://t.co/ajPlDcuQVb</a></p>— Imran Khan (@ImranKhanPTI) <a href="https://twitter.com/ImranKhanPTI/status/1653423552257720323?ref_src=twsrc%5Etfw">May 2, 2023</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
 
The Ministry of Finance has refused to pay for the cost of inefficiency or for clearing arrears of the China-Pakistan Economic Corridor (CPEC) energy projects and has instead proposed subsidies worth over Rs975 billion for the power sector, 37% less than the money demanded.

Sources say, after a meeting between the Ministry of Finance and the Ministry of Energy, the Q-Block has recommended over Rs975 billion in power subsidies for fiscal year 2023-24, starting from July. The recommended funds will mostly cover the cost of difference between consumer price and generation cost, and subsidies for Azad Jammu and Kashmir (AJK).

At this point in time, the finance ministry has not entertained the Power Division’s demand for Rs200 billion in CPEC arrears, said the sources, adding that the ministry has, however, agreed to give Rs48 billion to clear up to 87% of the current power generation bills of the CPEC power plants.

It is to note that the outstanding CPEC dues are one of the irritants in the way of smooth Pak-China economic relations.

Additionally, the finance ministry did not allocate any funds to bear the cost of inefficiency witnessed in Quetta Electricity Supply Company (QESCO) and in the AJK areas. Funds for the Kissan package, exporters subsidies and to compensate for the inefficiencies of the energy ministry, due to its failure to collect due electricity bills from the federal and the provincial government, have also not been proposed.

The Ministry of Energy had demanded Rs1.54 trillion in power subsidies for the next fiscal year, a colossal amount that is 70% more than this year’s revised budget. The demand was surprising since the government has twice increased electricity tariffs in the outgoing fiscal year in order to reduce subsidies and control circular debt.

The Pakistan Muslim League-Nawaz (PML-N) led coalition government has already increased electricity tariffs twice; first in July last year and then in February this year.

The proposed subsidies are Rs563 billion, or 37%, less than the initial amount demand by the energy ministry. The offered amount, however, is still Rs70 billion or 8% higher than the upward revised power sector subsidies for the current fiscal year.

Sources have said that the Rs975 billion figure is not yet final, as the matter is expected to be taken up with the finance minister and Prime Minister Shehbaz Sharif.

There are, however, transparency and accuracy related concerns about electricity subsidy claims for the erstwhile Federally Administered Tribal Areas (FATA) and the domestic and agricultural consumers of Balochistan. The Power Division had demanded subsidies worth Rs48 billion for the ex-FATA areas but the Ministry of Finance has offered Rs25 billion, with another Rs14 billion is committed to clear electricity arrears.

Since the federally administered areas have been merged with Khyber-Pakhtunkhwa (K-P) there is a need to end unlimited power subsidies. The federal government has also been picking up the additional cost to end any disparities in the economic development of the area.

The Ministry of Energy had demanded Rs164 billion as price differential subsidy for the government-run power distribution companies but the finance ministry has indicated fund worth Rs150 billion.

Apart from that, Rs170 billion is being indicated to pick up the cost of subsidies for K-Electric consumers. Similarly, Rs7 billion has been indicated to settle the arrears of the prime minister’s Industrial Support Package for KE consumers in the next fiscal year.

The finance ministry has not committed Rs195 billion requested as a special subsidy for QESCO on account of tube-wells. It has also not indicated any funds for the cost of inefficiency of the distribution company. The power division has demanded Rs65 billion as the price differential subsidy on account of less recoveries from the consumers.

The federal government has been paying its share of agriculture tube-well subsidies but the Ministry of Energy is unable to instil efficiency in the distribution company.

The ministry also sought a staggering Rs102 billion to clear arrears of AJK consumers who are already availing highly subsidised electricity. The energy ministry seems reluctant to implement a decision to charge the electricity tariffs from the AJK consumers applicable in other parts of the country. The finance ministry, however, has proposed only Rs55 billion. Against another demand of Rs62 billion for the AJK subsidy -an amount of Rs25 billion has been proposed by the finance ministry.

Strangely, the Ministry of Energy had demanded a subsidy worth Rs47 billion to clear the backlog of the federal government and the provincial governments’ bills. The finance ministry has refused these funds.

Subsidies worth Rs262 billion has been indicated to pay the dues of private power producers under a three-year-old deal.

Published in The Express Tribune, May 12th, 2023.

https://tribune.com.pk/story/2416258/rs975b-power-subsidies-proposed
 
Pakistan’s reeling economy takes new hit from protests: report

The already struggling Pakistani economy is taking a fresh hit due to ongoing protests and the suspension of mobile broadband services, following the arrest of Imran Khan.

The fallout is affecting thousands of workers in the gig economy who rely on internet connectivity for their livelihoods, like Mohammad Junaid who works for a ride-hailing service, Bykea.

Junaid told Al Jazeera, “My salary is not enough to meet expenses. I must work for Bykea to provide for my family.” The shutdown, caused by political unrest, further compounds the country’s economic woes, which include record inflation rates, dwindling remittances, and falling exports.

The current unrest is also damaging Pakistan’s international image, hindering foreign direct investment (FDI).

Wille Eerola, the chairman of the Finland Pakistan Business Council Chairman, criticised the ongoing “political circus” in Pakistan, saying it was harmful to the country’s image for international business and FDI.

Jehan Ara, a member of the Gender Advisory Council of the World Bank, echoed this sentiment, adding that the shutdown of internet and mobile services is impacting business continuity and growth.

“Our e-commerce businesses, which were growing due to the steady increase in digital adoption, have all been hit in one fell swoop — the ride-hailing services, the online marketplaces, food delivery businesses etc have all taken a hit, which includes drivers and delivery boys who depend on the daily wages they earn,” Ara explained.
 
Plan to raise $2b via Eurobonds
It will meet funding needs as foreign loans likely to remain thin

The government is planning to raise $2 billion through floating Eurobonds in the next fiscal year, as its foreign loan disbursement projections remain fluid in the absence of an International Monetary Fund (IMF) deal.

Due to the lack of clarity on the IMF front, the external debt inflows from the multilateral and bilateral creditors are estimated at only $6.2 billion for the next fiscal year, nearly 30% less than this year’s original estimate.

The estimate of $6.2 billion does not include any inflows on account of Eurobonds, commercial loans, and the IMF loan.

Sources in the Ministry of Finance said that the government was again considering raising $2 billion through Eurobonds during fiscal year 2023-24.

Its efforts to get financing from capital markets during the current fiscal year remained futile due to the junk credit rating assigned to Pakistan by three major international rating agencies.

However, Pakistan will have to win the trust of the IMF, if it wants to venture into capital markets. In the absence of IMF umbrella, it will be difficult to acquire new foreign commercial loans and issue sovereign bonds.

For the current fiscal year, Pakistan had expected the receipt of $3 billion from the IMF but it has so far got only $1.2 billion.

Sources said that during last week’s telephonic conversation with IMF Managing Director Kristalina Georgieva, Prime Minister Shehbaz Sharif floated the idea of extending the $6.5 billion loan programme. But sources said that the IMF told the premier that no further extension was possible for the current programme that would expire on June 30.

For the next fiscal year, the finance ministry is working on two scenarios,
with IMF and without IMF projections of foreign inflows.

Sources said that in the absence of an IMF scenario, the inflows would be too low and the government was placing its bets on China.

...
https://tribune.com.pk/story/2420697/plan-to-raise-2b-via-eurobonds
 
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