Innocent question about IMF loans

[fisher1]

Maybe it's just me but i don't understand something. Maybe someone else especially PTI supporters can enlighten me.

From what I've heard on TV (i can't confirm it personally because i see the elites still enjoying) is that Pakistan is on the verge of bankruptcy and increase taxes and suck blood out of Pakistanis and previous governments etc etc..

What i wonder is that after taking moarr loans from IMF on interest with payment due in 3 years, increasing inflation further, devaluing rupees further, will PTI magically pay back the IMF loans plus interest plus previous loans plus start flowing rivers of happiness in 3-4 years?

I smell bullshit and the very stinky kind by PTI. It seems like PTI agenda is to survive the 5 years term then let the next government suffer?

Economic growth is rushing towards the negative, the buying power of consumers has taken a huge hit, millions have become jobless and inflation and dollar prices still aren't stable and will degrade further in coming months.

So what kind of magical beast is this IMF and these 3 billion? Or 6 billion? Or 12 billion dollars that will suddenly turn things around in 3 years. Can someone enlighten me please? What is the government going to do to change things around so quickly?

https://tradingeconomics.com/pakistan/external-debt

 

[valkyr_96]

Maybe it's just me but i don't understand something. Maybe someone else especially PTI supporters can enlighten me.

From what I've heard on TV (i can't confirm it personally because i see the elites still enjoying) is that Pakistan is on the verge of bankruptcy and increase taxes and suck blood out of Pakistanis and previous governments etc etc..

What i wonder is that after taking moarr loans from IMF on interest with payment due in 3 years, increasing inflation further, devaluing rupees further, will PTI magically pay back the IMF loans plus interest plus previous loans plus start flowing rivers of happiness in 3-4 years?

I smell bullshit and the very stinky kind by PTI. It seems like PTI agenda is to survive the 5 years term then let the next government suffer?

Economic growth is rushing towards the negative, the buying power of consumers has taken a huge hit, millions have become jobless and inflation and dollar prices still aren't stable and will degrade further in coming months.

So what kind of magical beast is this IMF and these 3 billion? Or 6 billion? Or 12 billion dollars that will suddenly turn things around in 3 years. Can someone enlighten me please? What is the government going to do to change things around so quickly?

https://tradingeconomics.com/pakistan/external-debt

Devaluation of the rupee has got nothing to do with taking more loans. It is a way to make our exports competitive and make imports costly. It almost always have a positive effect on BoT but can have a positive effect on BoP as well. This is called the J curve effect.

The loan will be used to spread out the impending payments (this is managing the default). It may yet be used to subsidize any further increase in fuel costs as the international prices increase.

If you could smell bullshit than you would have said this some five years back when the PMLN government came because it was PMLN whose agenda was to survive the 5 years term, then let the next government suffer. Now you are in the shit. BTW Pakistan is bankrupt, it does not have much reserves of its own and most of what it has now is borrowed form friendly countries. Once again this is managing the default.

The government will not turn around much but it will be on a path to recovery. There is no voodoo magic or out of the box thinking that will turn around Pakistan. I would suggest you to watch Ishaq Dar videos before he came in government boasting that he will finish the circular debt. All the analyst said "are you going to park it in gov securities" he said just wait and see and that is exactly what he did. Look at the circular debt now. Will anyone take PMLN to task on the issue? Probably not after the bribes that were paid under the guise of government ads.

The NFC award and 18th Amendment was a problem for PMLN too and they would've proposed changes to it too. This is what I heard when we were unable to carve out federal receipt (asset based) for a international Sukuk.

Also if you still believe that the last government left Pakistan better off, maybe the smell of shit is the one you have for a brain.

 

[VCheng]

So what kind of magical beast is this IMF and these 3 billion? Or 6 billion? Or 12 billion dollars that will suddenly turn things around in 3 years. Can someone enlighten me please? What is the government going to do to change things around so quickly?

The real magic is not in the amount of the bailout, but in the conditionalities that come attached with it.
if the government can complete them as prescribed, things will indeed get better. But it will be tough to get through the time period that the adjustments are being made, no doubt. Some conditions are probably beyond the ability of the government to even contemplate, let alone implement.

 

[fisher1]

Devaluation of the rupee has got nothing to do with taking more loans. It is a way to make our exports competitive and make imports costly. It almost always have a positive effect on BoT but can have a positive effect on BoP as well. This is called the J curve effect.

The loan will be used to spread out the impending payments (this is managing the default). It may yet be used to subsidize any further increase in fuel costs as the international prices increase.

If you could smell bullshit than you would have said this some five years back when the PMLN government came because it was PMLN whose agenda was to survive the 5 years term, then let the next government suffer. Now you are in the shit. BTW Pakistan is bankrupt, it does not have much reserves of its own and most of what it has now is borrowed form friendly countries. Once again this is managing the default.

The government will not turn around much but it will be on a path to recovery. There is no voodoo magic or out of the box thinking that will turn around Pakistan. I would suggest you to watch Ishaq Dar videos before he came in government boasting that he will finish the circular debt. All the analyst said "are you going to park it in gov securities" he said just wait and see and that is exactly what he did. Look at the circular debt now. Will anyone take PMLN to task on the issue? Probably not after the bribes that were paid under the guise of government ads.

The NFC award and 18th Amendment was a problem for PMLN too and they would've proposed changes to it too. This is what I heard when we were unable to carve out federal receipt (asset based) for a international Sukuk.

Also if you still believe that the last government left Pakistan better off, maybe the smell of shit is the one you have for a brain.

Stop assuming things about me to justify something. I didn't have anything to do with politics and i hated every government. This chuteya (for lack of better word) Imran Khan showed up on my social media, among discussions in my college/university friends and showed me greener pastures and what kind of angel he was. I don't remember anyone ever saying anything good about Nawaz Sharif or Zardari, they were corrupt then, they're corrupt now.

But here's what i remember of the previous governments. Everything wasn't as expensive as it is today. Whether it's items of necessities or items of technology or gas or electricity or petrol. In PMLN government, i enjoyed 68-70 rupees petrol too.They took IMF loans too and they were corrupts too. My life as a citizen was bearable despite corrupt harami government.

Under the saaf pakeeza halal Islamic honest Riasatee Medina leadership of Imran Khan, hamari tou phat gayi hai.

And this isn't the end. Moarr loans, more devaluation, moar saaf halal taxes and relief is nowhere to be found.

What magic will IMF loans do that PTI will turn things around. All I hear in response to this from PTI is look at the previous government. Look at others, don't look at me.

Do you understand that IMF is giving loans not charity and Pakistan will be in much worse condition when we have to pay billion dollars of loans further?

Do you understand that poor aren't made of money and economy has slowed down because people can't effin buy anything anymore?

I was thinking of upgrading my PC, buying a new mobile phone but i said Astaghfirullah when i saw the prices. I can't buy anything anymore, i will sit quietly until prices drop which they never will. Do you understand this?

Under corrupt leadership of previous government, people still bought things. There was economic growth.

How will your business run when people don't buy anything?

As for my harsh language against Imran Khan, i voted for him when I've never for anyone else in my life. So he will have to bear abuses now from the people just like previous governments did. I am angry that i fell for his lies. I regret bringing this economic hitman on my beautiful country which despite corruption was progressing and life was bearable.

Life is unbearable in Pakistan when you're not filthy rich.

The real magic is not in the amount of the bailout, but in the conditionalities that come attached with it.
if the government can complete them as prescribed, things will indeed get better. But it will be tough to get through the time period that the adjustments are being made, no doubt. Some conditions are probably beyond the ability of the government to even contemplate, let alone implement.

At what cost? The conditions will further slow down economic growth not improve it?

The target of taxes and inflation so far has been the very people who drive the economy. The buying power is slowly diminishing.

Even auto industry of Pakistan is reporting losses which has never happened in its history.

 

[VCheng]

At what cost? The conditions will further slow down economic growth not improve it?

The target of taxes and inflation so far has been the very people who drive the economy. The buying power is slowly diminishing.

Even auto industry of Pakistan is reporting losses which has never happened in its history.

As I said, the costs associated with the IMF conditionalities will be tough to get through, no doubt about it, but they are the only way to atone for the accumulated economic sins of the past if there is to be a better future. IF the government can complete them. IF.

 

[Abdussamad]

IMF isn't there to manage our country for us. It's there for emergency lending and stabilization of the economy. After that we have a responsibility to manage our economy better. Since we rarely complete an IMF program much less undertake reforms after it we have to keep going back to them. In 5 years time the economy should be growing pretty well. But how long that will last without leading to a fresh balance of payments crisis is the real question. Generally whenever we start growing its on the back of import led consumption which throws everything out of whack very soon. Also the PTI will likely spend freely before the elections so that should also do a lot of damage to the economy. IK can't even stop spending when things are bad. Imagine how he will behave when the reins have been loosened?

 

[Pakistan Space Agency]

The real magic is not in the amount of the bailout, but in the conditionalities that come attached with it.
if the government can complete them as prescribed, things will indeed get better. But it will be tough to get through the time period that the adjustments are being made, no doubt. Some conditions are probably beyond the ability of the government to even contemplate, let alone implement.

So, basically what you're saying is PTI came to power just to cry for five years because no matter what they do, they're more than likely to fail.

 

[Abdussamad]

So, basically what you're saying is PTI came to power just to cry for five years because no matter what they do, they're more than likely to fail.

Yes and the weird thing is that everyone who follows the economic news of Pakistan new that the situation was dire. Somehow this hadn't filtered through to IK. Umar himself talked about an IMF bailout. He knew what was going on but his boss remained delusional.

 

[criticalerror]

Yes and the weird thing is that everyone who follows the economic news of Pakistan new that the situation was dire. Somehow this hadn't filtered through to IK. Umar himself talked about an IMF bailout. He knew what was going on but his boss remained delusional.

If everyone knows the economic situation is dire, why all the knives are out? Will it be fixed overnight? And Asad Umar paid for his foolish optimism. He had no idea and was sent packing. Appreciate that instead of making that yet another talking point.

 

[Sugarcane]

IMF will dictate you to stop wasting forex in artificially keeping Rupee high, increase revenues, cut expenses to decrease budget deficit. Reduce imports and increase export to reduce CAD. In short words, stop spending more than your income. Had you followed the prescription last time you went to IMF then you wouldn't be going again.

 

[criticalerror]

IMF will dictate you to stop wasting forex in artificially keeping Rupee high, increase revenues, cut expenses to decrease budget deficit. Reduce imports and increase export to reduce CAD. In short words, stop spending more than your income. Had you followed the prescription last time you went to IMF then you wouldn't be going again.

This is what we fail to realize. We just take loans every time and forget the rest. I hope this time the government does the necessary reforms after taking the unavoidable IMF loans.

 

[Pakistan Space Agency]

IMF will dictate you to stop wasting forex in artificially keeping Rupee high, increase revenues, cut expenses to decrease budget deficit. Reduce imports and increase export to reduce CAD. In short words, stop spending more than your income. Had you followed the prescription last time you went to IMF then you wouldn't be going again.

Last time? You mean the 12th time?

IMF is not there to turn any nation into a developing country. It is only there to provide emergency funds to the tune of whatever a country requires.

 

[BHarwana]

Maybe it's just me but i don't understand something. Maybe someone else especially PTI supporters can enlighten me.

From what I've heard on TV (i can't confirm it personally because i see the elites still enjoying) is that Pakistan is on the verge of bankruptcy and increase taxes and suck blood out of Pakistanis and previous governments etc etc..

What i wonder is that after taking moarr loans from IMF on interest with payment due in 3 years, increasing inflation further, devaluing rupees further, will PTI magically pay back the IMF loans plus interest plus previous loans plus start flowing rivers of happiness in 3-4 years?

I smell bullshit and the very stinky kind by PTI. It seems like PTI agenda is to survive the 5 years term then let the next government suffer?

Economic growth is rushing towards the negative, the buying power of consumers has taken a huge hit, millions have become jobless and inflation and dollar prices still aren't stable and will degrade further in coming months.

So what kind of magical beast is this IMF and these 3 billion? Or 6 billion? Or 12 billion dollars that will suddenly turn things around in 3 years. Can someone enlighten me please? What is the government going to do to change things around so quickly?

https://tradingeconomics.com/pakistan/external-debt

Pakistan is not on the verge of bankruptcy but every country is almost on the verge of bankruptcy if your still mport bill is bigger than you export bill. Now what PTI is doing? PTI is doing nothing and PTI cannot do anything other than make policies and administer that those policies are implemented.
How you save your country from bankruptcy is by reducing deficit and PTI is doing a good job in that. When deficit is being reduced it makes business environment a bit tense but this is the bitter pill we need to swallow so take a break and make your self a drink but our economy is being healed in reality.

 

[VCheng]

So, basically what you're saying is PTI came to power just to cry for five years because no matter what they do, they're more than likely to fail.

Well, miracles do happen. Pakistan itself is a miracle, please remember that.

 

[Sugarcane]

Last time? You mean the 12th time?

IMF is not there to turn any nation into a developing country. It is only there to provide emergency funds to the tune of whatever a country requires.

IMF kya phopho ka bank hai jo jab dil chahy, jitney chahay paisay lainay chalay jaao. Every lender first ensure that you can payback before giving loan.