Trade deficit peaks at $39.3 billion

[Wood]

Pakistan should or rather could consider framing economic policies that will use tax money to subsidize the exist sector impartially. Tax investment into unproductive sectors like RE and divert the collection into productive sectors

 

[pikkuboss]

one thing I dont understand, IMF says increase price of oil but that would be in rupees so how IMF will get benefit for this why they ask for increase in rates while we have to pay back in dollars?

Petrol price in your next door at 300 PKR should tell you that there is a big problem with Pakistan's fuel prices.

 

[Wood]

one thing I dont understand, IMF says increase price of oil but that would be in rupees so how IMF will get benefit for this why they ask for increase in rates while we have to pay back in dollars?

That is meant to reduce fiscal deficit. Reducing fiscal deficit will allow for lower external borrowing (in $) to balance budget. It is a standard IMF move that will have the side effect of increasing inflation and reducing private spend in other areas. Eventually, it may lead to economic slow down.

 

[pikkuboss]

Cut down import or go on imrannkhan path this shows what imrannkhan was going to do for pakistan

import oil bill monthly $1.8B. yearly around $21B. Get oil from russia 30% will save $6.5B yearly that is our IMF program for 3 years.

It's not that easy sir. How did you calculate $6.5B saving? Pakistan doesn't have any refinery that can refine Russian oil. You would need to invest 1 billion dollar to upgrade refineries before you can import Russian oil. Pakistan neither has money to invest in oil refineries and no other country will finance/build those refineries if it is for Russian oil at this moment.

That is meant to reduce fiscal deficit. Reducing fiscal deficit will allow for lower external borrowing (in $) to balance budget. It is a standard IMF move that will have the side effect of increasing inflation and reducing government spend in other areas. Eventually, it may lead to economic slow down.

Yes, I remember someone was telling that Pakistan GDP shouldn't grow at more than 3% if Pakistan wants to sustain the growth. We can understand now that 5% growth in Pakistan was at the cost of today's situation of Pakistan.

 

[Wood]

It's not that easy sir. How did you calculate $6.5B saving? Pakistan doesn't have any refinery that can refine Russian oil. You would need to invest 1 billion dollar to upgrade refineries before you can import Russian oil. Pakistan neither has money to invest in oil refineries and no other country will finance/build those refineries if it is for Russian oil at this moment.

I think that they have some refinery. One senior member made a post here that Pakistani refineries can be used to process Ural grade crude without much overhead in terms of retooling factory.

But Pakistanis here do not factor the economic cost of transport, insurance and political cost of moving completely to Russian crude. Their ideas seem to be influenced by Facebook memes that claim high numbers.

 

[Verve]

Imports bill needs to be slashed down by $5 billions immediately. Increase in Oil and gas prices is not helping infact it is the main cause of heavy import bill.

Appx $6b reduction would have come from cheaper Russian oil ..

 

[pikkuboss]

Appx $6b reduction would have come from cheaper Russian oil ..

You are talking about a scenario where Pakistan would import 100% of its oil from Russia. This is not practical, max 10% you could import as you don't have enough refineries to process Ural grade crude.

 

[Salza]

Appx $6b reduction would have come from cheaper Russian oil ..

Alas!

 

[pikkuboss]

I think that they have some refinery. One senior member made a post here that Pakistani refineries can be used to process Ural grade crude without much overhead in terms of retooling factory.

But Pakistanis here do not factor the economic cost of transport, insurance and political cost of moving completely to Russian crude. Their ideas seem to be influenced by Facebook memes that claim high numbers.

Even if that is the case, still no other countries would help Pakistan with upgradation of refineries in this situation, not even China. This is a catch 22 situation where Pakistan would have suffered both ways.

 

[Wood]

Yes, I remember someone was telling that Pakistan GDP shouldn't grow at more than 3% if Pakistan wants to sustain the growth. We can understand now that 5% growth in Pakistan was at the cost of today's situation of Pakistan.

Overheating is a possibility when GDP growth jumps abruptly.

 

[Salza]

Even Palm Oil prices rosed up in the last 1-2 years.

 

[Ssan]

The title is misleading. The trade deficit was very concerning mid to end of 2021 due to poor policies of Tareen. But then PTI already managed to control it. Right now, main issue is oil prices but trade deficit is not that high month to month. When you say 10 month, you include the period which was very bad which has already been contained.

Please note also that exports have been growing faster than imports in the more recent trend. Bottom line, on the external front, I would much rather have this situation than the situation in 2018, you can pull those figures and take a look too- that was a lot worse

 

[Salza]

Imported cars / phones / luxury items all should be banned for atleast an year. PTI govt did this successfully in 2019 where we managed to cut down our curret account deficit gap by $12 billions.

 

[AZ1]

It's not that easy sir. How did you calculate $6.5B saving? Pakistan doesn't have any refinery that can refine Russian oil. You would need to invest 1 billion dollar to upgrade refineries before you can import Russian oil. Pakistan neither has money to invest in oil refineries and no other country will finance/build those refineries if it is for Russian oil at this moment.


Yes, I remember someone was telling that Pakistan GDP shouldn't grow at more than 3% if Pakistan wants to sustain the growth. We can understand now that 5% growth in Pakistan was at the cost of today's situation of Pakistan.

https://twitter.com/i/web/status/1522193156485394432

So you are saying that pakistan shouldnt invest $1B upgrade refinery to dave $6 billion every year?

Take loan of $1B even on higher interest if it saves us $6 billion every year

 

[pikkuboss]

https://twitter.com/i/web/status/1522193156485394432

So you are saying that pakistan shouldnt invest $1B upgrade refinery to dave $6 billion every year?

Take loan of $1B even on higher interest if it saves us $6 billion every year

You are talking about a scenario where 100% of import will be from Russia which doesn't exist. India with all the hubaaloo in media imports only 1% crude from Russia. Pakistan can achieve 20% of total imports at best which is after investing huge on refineries. Now think about the retaliation, how much you will loose to American retaliation.