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Pakistan’s external debt, liabilities increase 12.3% to $85b

Same or similar
IND and PK have similar total debt of 52.3% and 58.5% of GDP respectively while BD has only 25.9% debt to GDP ratio. BD's debt is less than half in percentage points of PK and IND. External Debt is only 12% for BD while 20% and 26% for IND and PK respectively. BD seems to have significantly lower debt than both IND and PK.

Source: Wiki
https://en.wikipedia.org/wiki/List_of_countries_by_public_debt
https://en.wikipedia.org/wiki/List_of_countries_by_external_debt
 
Lolx.. What Imran khan has to do with it ? On topic! Time to write a letter to Swiss bank.
 
Dude we are 2 trillion dollars economy already with 400 billion as foreign reserves. So yes we can spend another 200 billion for imports of weapons incase of war. And wont go broke like 5 billion yearly deficit like ur country.

Modi is doing great for Indians. 240 million people dint have electricity for many decades. Modi dint cut the fuse for ur information


Having money doesn't mean one should spend it irresponsibly. India is a 2 trillion dollar economy, but it also has a population of 1.3 billion, which means that while it has a slightly larger economy than the UK, its per capita GDP is only $1700, while UK stands at $40000. According to these figures, India is actually closer to Pakistan which has a per capita GDP of $1400. India actually has the world's largest population of people living in abject poverty, which actually means that 270 million Indians are living below subsistence level and that is even larger than the entire population of Pakistan.

So kindly stop day dreaming.

Keep hoping on CPEC. Now entire Pakistan's future depends upon someone's lending not Pakistan's industries. Good job? I wonder how can u be so cool about it.

U earn 100 rupees u have loan of 105 rupees to pay? And add that most if ur properties are already kept in several banks for 1 lac rupees loan... Will u be hoping on me if i promise you to lend another 80,000 rupees?

Are u ok bro?

What an immature explanation. Do you even know any economics? Do you even know your own history? India actually collapsed in 1991. Pakistan's economy is only weak because we have withstood American sanctions.

Please educate yourself;

http://www.thehindu.com/business/Ec...hat-changed-India-forever/article14505003.ece
 
Having money doesn't mean one should spend it irresponsibly. India is a 2 trillion dollar economy, but it also has a population of 1.3 billion, which means that while it has a slightly larger economy than the UK, its per capita GDP is only $1700, while UK stands at $40000. According to these figures, India is actually closer to Pakistan which has a per capita GDP of $1400. India actually has the world's largest population of people living in abject poverty, which actually means that 270 million Indians are living below subsistence level and that is even larger than the entire population of Pakistan.
India has smaller economy than the UK, not larger. UK has larger GDP.
 
Modi government has started addressing this problem. As soon as they came in to power they made a commitment to electrify every village and household in India by 2019 and created a portal which is updated every week for real time tracking, any individual can see the progress the govt is making.

http://garv.gov.in/dashboard

Your point brings us back to my original comment. The difference between Pakistan and India us that while Pakistan has commissioned power plants and reduced load shedding, Modi has effectively marketed non-achievements to fawning supporters.

It doesn't matter what has been promised or what dashboard has been uploaded. What matters is what has been done. Modi has only done Demonetization.

India has smaller economy than the UK, not larger. UK has larger GDP.

A few million here and there don't matter to me, but I can't stand Indians crying about this. So I gave him lollipop to keep him happy.
 
Having money doesn't mean one should spend it irresponsibly. India is a 2 trillion dollar economy, but it also has a population of 1.3 billion, which means that while it has a slightly larger economy than the UK, its per capita GDP is only $1700, while UK stands at $40000. According to these figures, India is actually closer to Pakistan which has a per capita GDP of $1400. India actually has the world's largest population of people living in abject poverty, which actually means that 270 million Indians are living below subsistence level and that is even larger than the entire population of Pakistan.

So kindly stop day dreaming.



What an immature explanation. Do you even know any economics? Do you even know your own history? India actually collapsed in 1991. Pakistan's economy is only weak because we have withstood American sanctions.

Please educate yourself;

http://www.thehindu.com/business/Ec...hat-changed-India-forever/article14505003.ece

Are u kidding me or kidding urself dude? World told the same to China look. Where they are. As an Indian i will assure you thats things are moving fast. All states competing each other with new projects and industrial development in all sectors. Only difference between India and China is that China zoom passed and its economy isn't that sustainable. Where as India growing slowly but steadily taking all together. As you said 1.3 billion people. Its not an easy task.

We are discussing India China or Pakistan?
 
The External and internal Debt are at unsustainable levels. This thread is not a comparison about Pak vs India. Its about Pakistan again being at the brink of approaching IMF and what can be done to avert the situation. Btw, this would be the 7th time Pakistan would have approached IMF seeking a bail out. I dont think any pakistani wants to approach an IMF controlled by Donald Trump.

But some posters here run away from the reality by making irrelevent comparisons which serve no purpose. Pakistan's Net reserves are 8 billion dollars. Your external debt is approximately 90 billions dollars. Printing money wont help here. Your public debt debt is 75-80% of the GDP. Fact is Pakistan will approach the IMF if it does not take corrective action. And the discussion here should be on those corrective actions.
 
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A few million here and there don't matter to me, but I can't stand Indians crying about this. So I gave him lollipop to keep him happy.
Difference of $200 billion. Almost the size of BD economy. Not exactly few million. Suppose I get your point though.

The External and internal Debt are at unsustainable levels. This thread is not a comparison about Pak vs India. Its about Pakistan again being at the brink of approaching IMF and what can be done to avert the situation. Btw, this would be the 7time Pakistan would have approached IMF seeking a bail out. I dont think any pakistani wants to approach an IMF controlled by Donald Trump.

But some posters here run away from the reality by making irrelevent comparisons which serve no purpose. Pakistan's Net reserves are 8 billion dollars. Your external debt is approximately 90 billions dollars. Printing money wont help here. Your public debt debt is 75-80% of the GDP. Fact is Pakistan will approach the IMF if it does not take corrective action. And the discussion here should be on those corrective actions.
Calm down. India is not far behind Pakistan on debt. Sri Lanka also has much higher debt to GDP ratio. Quite surprising only BD have very low debt among IND PK and BD. Far below or less than half of percentage than IND and PK.

What percentage does it take to approach IMF anyway?
 
Irrelvant dribble needs to be ignored.

‘Govt needs to shun IMF’s role in policymaking’

LAHORE: Pakistan’s economy is inching towards point of no return due to interference by the International Monetary Fund (IMF) into policy making, an official said on Saturday.

“I had identified 25 sectors to overcome trade deficit. I am working day in and day out to help jack-up exports and curtail imports,” LCCI President Malik Tahir Javaid said.

Industry is the main victim of deepening economic crisis, he said, adding that the rupee devaluation is adding to the economic miseries of the country and all these ills produced just because of awful interference of the IMF in the Pakistan’s economic matters and dictations to the policymakers for taking harsh measures.

The LCCI president said
Pakistan is the “most frequent customer” of the IMF and Pakistani governments often depends on borrowing from the IMF and accepted stringent conditions, despite the fact that this institution is merciless money lender, which always forced Pakistan to adopt bad policies such as rupee devaluation and massive increase in the electricity and gas tariffs.

“How a country can take independent decisions and grow its economy when it is carrying the burden of over $85 billion debt and utilising huge part of the federal budget for debt servicing?” The LCCI president said.

Pakistan would be a loser in many heads, if immediate measures are not taken to get rid of the massive loans, which are the mother of most of the economic ills, Javaid said.

Meanwhile, LCCI office-bearers Malik Tahir Javaid, Senior Vice President Khawaja Khawar Rashid and Vice President Zeeshan Khalil also demanded appointment of a permanent finance minister.

Business community understands that there is no overnight solution to the economic problems, but there is a dire need to set directions and to introduce economic reforms in the favour of trade and industry, they said, adding that the country should have a permanent finance minister.

The country faced various economic challenges last year, including decline in exports and foreign direct investment, lowest tax-to-GDP ratio and inefficiency of the public sector entities, but these challenges can be coped through meaningful partnership and dialogues between the government and the private sector.

Giving formula for economic independence, the LCCI office-bearers said there are a number of issues that must be tackled on a priority basis. The biggest problem is how to keep the momentum of growth in the wake of a less-than-targeted growth of the agriculture and manufacturing sectors.

Likewise, the widening gap between exports and imports could be contained by enhancing exports, they said, adding that the government would also have to focus on agriculture, manufacturing, education, water, human resources, minerals, public health, tax collection system.

Agriculture is the largest sector of Pakistan as around 43 percent labour depends on this sector.

This largest sector needs revolutionary reforms on war footings, they said, adding that the growth of agriculture sector would not only ensure food security and provision of raw material to the textile industry, but would also generate huge revenue for the government and vast employment opportunities.

The country’s population is growing at the rate of 2.10 percent every year and, if this growth continues for the next two decades, the population would cross the mark of 240 million. Pakistan needs to increase the yield/acre on steady pace; therefore, the government should plan to bring around nine million hectares of fertile land under cultivation, which remained useless just because of water shortage.

The LCCI office-bearers also stressed on the construction of Kalabagh Dam.

Pakistan is enriched with mineral resources worth trillions of dollars that can make the dream of economic stability come true, they said, adding that these resources should be fully utilised for economic uplift of the country, and local companies should be given priority for mining.

The office-bearers said the Lahore Chamber of Commerce and Industry would continue to play its due role and supplement the government endeavours aimed at economic revival of the country and had already started spade work, in this regard, to identify the challenges being faced by the trade and industry.

They also stressed the need for developing regional, product-specific and target-oriented marketing strategy.

New markets and new products need to be explored to reduce the country’s dependence on a few commodities and countries.

Pakistan’s exports are highly concentrated in a few items. Such concentration in a few markets can also become a source for instability in export earnings, they said.

The Trade Development Authority of Pakistan (TDAP) should be revamped and private sector representation should be there to enhance exports, they added.


https://www.thenews.com.pk/print/256937-govt-needs-to-shun-imf-s-role-in-policymaking

Finally an article not only recognizing the imperious situation Pakistan is in , but also suggesting corrective measures which need to be taken.
 
Difference of $200 billion. Almost the size of BD economy. Not exactly few million. Suppose I get your point though.


Calm down. India is not far behind Pakistan on debt. Sri Lanka also has much higher debt to GDP ratio. Quite surprising only BD have very low debt among IND PK and BD. Far below or less than half of percentage than IND and PK.

What percentage does it take to approach IMF anyway?

India is already larger than UK given indian rupee appreciation over the last year. You'll find India is fifth largest economy by early next year.
 
Pakistan’s economic fortunes now in the hands of the IMF

WIth Islamabad running out of funds to service its debt payments and current account deficit, talks are underway with regard to a bailout package

With Pakistan’s foreign-currency reserves falling 29% this year to US$12.6 billion by the end of October and the country’s trade deficit ticking ever upward, Islamabad has found itself back at the International Monetary Fund (IMF) to discuss a bailout.

First on the IMF’s checklist is devaluation of the Pakistani rupee. The State Bank of Pakistan (SBP) loosened its grip on the currency on December 8, resulting in a downward adjustment in its exchange rate in interbank and open market transactions. It quickly shed over 5% against with the US dollar. Discussions regarding policy-level measures are ongoing.

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Pakistan’s economy had already been showing signs of floundering before it was reported in August
that the central bank had borrowed $5.81 billion from commercial banks under “forward and currency swap” arrangements to boost its reserves position and stabilize the currency. Excluding those loans, Pakistan’s actual foreign currency reserves would stand at a mere $6.79 billion. And they should be excluded, because they are not usable in any sense.

“The SBP did not deny the media reports, nor did the government issue any clarification which [disputes] the apprehension that the economy has gone haywire,” a senior executive at a Dubai-based exchange company told Asia Times. Pakistan’s reserves position was particularly alarming, he added, in light of the World Bank’s estimate, in October, that Islamabad will need $17 billion worth of external financing in the fiscal year ending June 30, 2018, to service its debt payments and current account deficit.

“How the government will honor its external commitments needs to be explained,” he said, adding that as far as any IMF package is concerned, it will come with painful strings attached (for one thing, devaluation means inflation). Any “stopgap” measures, he said, would make little impact on a current account deficit of $14.4 billion, or subdue an import growth rate of $5 billion per month on the back of China’s “Belt and Road” infrastructure drive.

Excluding those loans, Pakistan’s actual foreign currency reserves would stand at a mere US$6.79 billion. And they should be excluded, because they are not usable in any sense.

At the end of last month, the government launched Sukuk (Islamic bonds) and Euro bonds worth $2.5 billion, at a profit rate of 5.6% and 6.8%, respectively, again to prop up its reserves. It claimed the bidding reflected “overwhelming confidence of the global investor in Pakistan’s economy.” Independent financial analysts remained skeptical, however.

The SBP, in justifying its deregulation ploy last week, declared: “The continuation of high growth in imports led to a widening of the current account deficit, and consequently to depletion in the country’s foreign exchange reserves. These pressures have persisted, leading to an adjustment in interbank exchange rates. This movement in the exchange rate is based on demand and supply of foreign exchange in the interbank market.”

Speaking at a meeting of the Pakistan Society of Development Economists on Wednesday just after the rupee slid against the dollar, SBP governor Tariq Bajwa said the exchange rate would be determined from now on by “market forces”. The aim, he said, was for the currency to attain “equilibrium.”

In the days since, however, Peshawar’s Chowk Yadgar currency market has been directionless, with exchange companies and currency dealers hesitant to do any deals around buying or selling dollars.


http://www.atimes.com/article/pending-review-pakistans-economic-fortunes-now-hands-imf/

Ishaq Dar and SBP are misleading the General Public but cant fool International Institutuins. They should be tried in an Anti terrorist court for such grave economic manipuulation. The situaction is much more precarious then how SBP is trying to portray.
 
The SBP, in justifying its deregulation ploy last week, declared: “The continuation of high growth in imports led to a widening of the current account deficit, and consequently to depletion in the country’s foreign exchange reserves. These pressures have persisted, leading to an adjustment in interbank exchange rates. This movement in the exchange rate is based on demand and supply of foreign exchange in the interbank market.”

Speaking at a meeting of the Pakistan Society of Development Economists on Wednesday just after the rupee slid against the dollar, SBP governor Tariq Bajwa said the exchange rate would be determined from now on by “market forces”. The aim, he said, was for the currency to attain “equilibrium.”


One side of the story...better to get the other perspective as well, so as to make a balanced opinion.




The government raised $2.5 billion through two international bonds — sukuk and eurobond — a few days ago. Mr Mahmood said the bond launching team had the mandate from the federal cabinet to raise up to $3bn from the international market but did not touch that level because it could have increased the pricing.

“We have that facility available. We can go to the capital market again in a month and a half”, he said, adding that the IMF mission would submit its report on the assessment of Pakistan’s economy to the executive board by February next year, but why should the government wait for their advice.

Govt says no IMF bailout needed, mulls another bond launch

Khaleeq KianiUpdated December 15, 2017
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ISLAMABAD: Pakistan plans launching another international bond in about 45 days to manage external vulnerabilities and said it would do everything possible not to go for another IMF programme in any circumstances.

This came on the conclusion of 10-day comprehensive talks with the International Monetary Fund that identified a couple of near-term challenges mostly arising out of pre-election political instability but otherwise noted strong economic growth prospects and healthy fundamentals.

The IMF welcomed recent depreciation of the rupee, noted favourable economic growth momentum supported by improved energy and security situation and infrastructure investments but called for strengthening resilience, greater exchange rate flexibility, fiscal discipline and tight monetary policy stance.

Remarks come at the end of post-programme monitoring with the fund

The “government is fully focused not to let things reach a stage where you need IMF programme. We will do every thing possible to stop that,” Secretary Finance Shahid Mahmood told journalists as the IMF mission led by Harald Finger confirmed separately that the authorities did not seek or need another bailout from the IMF.

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The government raised $2.5 billion through two international bonds — sukuk and eurobond — a few days ago. Mr Mahmood said the bond launching team had the mandate from the federal cabinet to raise up to $3bn from the international market but did not touch that level because it could have increased the pricing.

“We have that facility available. We can go to the capital market again in a month and a half”, he said, adding that the IMF mission would submit its report on the assessment of Pakistan’s economy to the executive board by February next year, but why should the government wait for their advice.

The finance secretary said the government missed targets on fiscal and external fronts last year but had made every effort to retrieve the situation, as revenues showed 19.5pc growth in five months against 8pc of last year while all areas of expenditures were being kept under tight control and all pillars of the government were being kept abreast of the situation to ensure that fiscals do not land at the last year level when it ended up 5.8pc of GDP fiscal deficit instead of targeted 3.8pc.

He declined to commit exact size or type of the bond saying instruments could be different and financing needs would vary depending on discussions with other multilateral lenders like the World Bank and the Asian Development Bank but said the new bond in the international market would be of 5, 7, 10 or 30 year tenure depending on the market situation.

In extreme circumstances, the secretary finance said the government could also arrange commercial financing but that would always be the lost resort.

Responding to a question, he said the external needs were not out of control but would depend on export growth and measures taken to control imports.

He said the exports in five months of current year have grown by 11.8pc after declining for four years continuously and imports were showing signs of contraction after imposition of regulatory duties while recent currency devaluation would also affect import growth.

Remittances on the other hand also showed 1.3pc growth in first five months after last year’s fall. He said the government had missed targets for fiscal deficit and current account deficits last year by a margin but was taking all possible measure to ensure that situation was not repeated again. He said the external needs were not out of control.

An IMF mission visited Pakistan from Dec 5-14 for the first Post-Programme Monitoring (PPM) since the end of Extended Fund Facility (EFF) in September 2016 and held detailed technical discussions with senior officials in the Ministry of Finance and State Bank of Pakistan, ministries of energy, planning, commerce, privatisation, railways, and the Federal Board of Revenue, Board of Investment and regulatory bodies like Nepra, Ogra and SECP.

Going forward, the secretary said the government would continue with fiscal consolidation without taking steps to affect economic growth that was targeted at 6pc may stay little lower. The IMF delegation put the growth forecast at 5.6pc of GDP.

The secretary finance agreed that 4.1pc limit set for fiscal deficit may slip as many factors had changed since the budget was announced in June 2017. He said it would not be advisable to restrict economic growth by cutting down on development because this could impact job creation but revenue machinery had to do a lot more during the current year for which a plan was on the prime minister’s table.

Harald Finger told journalists that continued exchange rate flexibility will be important to facilitate external adjustment to support exports and economic growth. “Strengthening the economy’s resilience will be important to maintain Pakistan’s favourable growth momentum and ensure sustainable private investment and job creation in the medium term”, he said.

But despite accelerating growth and subdued inflation, the mission noted that Pakistan faced important near-term economic challenges like surging imports that cut down on reserves despite higher external financing. The increase in the fiscal deficit last year has added to these trends.

Also, it expressed concern over accumulating power sector arrears and wanted the government to act decisively to address for prevent a further build up of vulnerabilities and preserve Pakistan’s hard-won macroeconomic stability.

The mission noted that a strong reform effort was needed to maintain external stability, ensure debt sustainability, and support higher and more inclusive growth in the medium term. This included pursuing medium-term fiscal consolidation driven by accelerated efforts to broaden the tax base, strengthening the monetary policy framework and autonomy of the SBP besides careful phasing in of new external liabilities to contain external stability risks, eliminating the losses of public sector enterprises, improving the business climate, and continued strengthening of the financial sector.

Published in Dawn, December 15th, 2017


https://www.dawn.com/news/1376654/govt-says-no-imf-bailout-needed-mulls-another-bond-launch
 
Yes, I posted that article as a thread here. You need to understand something. Pakistan cant keep taking loans, especially keeping in mind the limited forex and very high fiscal and current account deficit. Let see you have a debt of around 90 billion US dollars as of now. 65% of your revenue goes into debt servicing. At the same time in the first five months the trade deficit is 15 billion dollars. So you need funding to the extent of 17 billion dollars this year for budget funding. Apart from this 5 billion dollars needs to be repaid by June 2018.

There is a reason that within two weeks you have lost 1.5 billion dollars after taking a loan of 2.5 billion dollars and forex reserves stand reduced to 14.6 billion dollars. Now keeping the aforesaid in mind you will be at max taking a loan of another 2.5 billion dollar at 6% which is very expensive in comparison to 2% given by IMF and even then this 2.5 billion will not be enough. Your NET FOREX RESERVES ARE JUST 7 BILLION DOLLARS. And lets not even talk about the political instability.
 
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Yes, I posted that article as a thread here. You need to understand something. Pakistan cant keep taking loans, especially keeping in mind the limited forex and very high fiscal and current account deficit. Let see you have a debt of around 90 billion US dollars as of now. 65% of your revenue goes into debt servicing. At the same time in the first five months the trade deficit is 15 billion dollars. So you need funding to the extent of 17 billion dollars this year for budget funding. Apart from this 5 billion dollars needs to be repaid by June 2018.

Yes if the Pak financial economy is looked in the context of just deficit financing, import and exports discrepancy, budget deficit and debt servicing than it looks bad.

But that is a small part of Pakistan financial sector, a 7-8 billion USD yearly deficit is not that a big deal. Looking at the main strength of Pakistan economy, the private sector enterprise...Pakistan is all run by private sector, the banking sector in rupee deposit and credit given to private sector has risen by 100% in recent times shows the private sector belief in the rising economy.




Private-sector credit off-take doubles

Shahid IqbalUpdated December 17, 2017

KARACHI: The private sector seems to have increased its activities despite persistent political uncertainty in recent months, latest data released by the State Bank of Pakistan (SBP) shows.

The trend is reflected by the fact that the private sector doubled its credit off-take in the first five months of the current fiscal year.

The private sector borrowed Rs112 billion between July 1 and Dec 1, which is 100 per cent higher than a year ago when its borrowing amounted to Rs54bn.

Higher borrowing by the private sector reflects increased economic activities. In its last monetary policy announced in November, the SBP expressed confidence that the economy would achieve a 6pc growth rate in 2017-18.

The SBP’s third quarterly report said low interest rates are impacting the profitability of banks as their yield spread declined and gains on the sale of securities evaporated. However, their net interest income started picking up pace led by a 10.5pc increase in interest earned on advances to customers.

Higher economic activities were also reflected by 57pc growth in foreign direct investment, although most of it is coming from China under the China-Pakistan Economic Corridor (CPEC).


https://www.dawn.com/news/1377051/private-sector-credit-off-take-doubles



Just to add Pakistan gets about 21 billion USD as remittances and that USD flow to Pakistan plays a major part in helping Pakistan stash its dollar reserves, helps in deficit financing...
 

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