We are going to burn through reserves

[_Nabil_]

Damn politicians all over the Arab/Muslim world, only thinking about next election and bankrupting their countries.

We have this same cancer in Tunisia Unfortunately.

Political parties are all the same, right ,left, centrists, Brotherhood, we tried them all, with the same results. ...

Damn Democratic system if its only about elections and power ....

 

[hydrabadi_arab]

Reserves will get eaten if rupee is subsidized
And if exports lose the 10% growth moment

Things went horrible wrong(no.remittence growth negative 20% exports growth) to cause such a massive problem in 2018

2-3% of GDP comes out to be around 10b$
So that is limit of CAD that we can tolerate or around 1b/month.
Currently is running twice as high
SBP thought this is all energy related and it would improve with oil price improvement however ukraine crisis will prolong the high oil prices

If ukraine crisis goes away and iran deal is finalized expect a drop in oil since massive oil production may enter market
Both russia and iran have hsitorically pumped max amount of oil disregarding OPEC
Which leads the king (saudis) to pump out oil as well

Remeber saudis have the cheapest oil(@ less then 10-15$)

GDP is useless metric when talking about external crisis/IMF. Fact is $20b CAD will be highest ever, things not looking good for next government. Who knows maybe oil price may drop to $80 soon. It all depends.

 

[Adonis]

What if barrel price comes down?

Doesn't seems likely in wake of current geo-political situation, world opening up after Covid (more demand for oil).....amidst this, if he has reduced the oil prices in anticipation of barrel price coming down it would be utterly foolish on IK's part.

 

[Turingsage]

He has promised this till the next budget.
At $90 a barrel that will cost Pakistan $3 billion
At $100 of course this will cost more.

Who knew when IK was selected by Pakistan's real men of power that IK would leave Pakistan in a far worse state than Nawaz could ever manage.

 

[khansaheeb]

What Imran Khan has announced is basically providing subsidy for petrol. The only way I see this going forward is through burning our hard earned reserves

This will end poorly for Pakistan

https://twitter.com/x/status/1498315366392647684

Which will mean more debt.

 

[Turingsage]

Govt set to offer third tax amnesty scheme​

https://tribune.com.pk/story/2345801/govt-set-to-offer-third-tax-amnesty-scheme
Tribune express

 

[ziaulislam]

GDP is useless metric when talking about external crisis/IMF. Fact is $20b CAD will be highest ever, things not looking good for next government. Who knows maybe oil price may drop to $80 soon. It all depends.

No its not
CAD shouldnt be measured in absolute terms but as % of GDP
As 2% CAD is absorbed without any issues
Puck up global map and see how many countries are positive..you will find few

However anything south of 3% that is only going to get worse(i.e worsening exports and uncontrolled imports) will cause panic amongst lenders and thus external crisis EVEN IF YOU HAVE POSITIVE CAD as you need lenders just to roll over your prior loans

What pakistan needs is growth and stability..if SBP theory of this being transitory is true then nothing to worry about if not then pakistan will get in toruble once oil credit runs out

 

[Orca16]

What weird is when you speak to local Pakistani they refer to the price of sugar and wheat as economic indicators but don’t realize the mountain of debt we been put under from previous administrations. We need to create better industries and break through with verticals which are unique to Pakistan only. Truth be told, I know ppl hate on Musharraf but I remember reading economics magazines in university and they used to list Pakistan as an emerging economy. Lol where are we now? A fing laughing stock of the world. Also, people don’t wanna work hard they wanna be sponsored abroad. A true catch 22. There is no incentive to continue life back home.

 

[hydrabadi_arab]

No its not
CAD shouldnt be measured in absolute terms but as % of GDP
As 2% CAD is absorbed without any issues
Puck up global map and see how many countries are positive..you will find few

However anything south of 3% that is only going to get worse(i.e worsening exports and uncontrolled imports) will cause panic amongst lenders and thus external crisis EVEN IF YOU HAVE POSITIVE CAD as you need lenders just to roll over your prior loans

What pakistan needs is growth and stability..if SBP theory of this being transitory is true then nothing to worry about if not then pakistan will get in toruble once oil credit runs out

Pakistan GDP for 2021-22 is expected to be around $370b (because rupee again tanked to 177 from 160 last FY). $20b mean around CAD will be 5.5% of GDP.

 

[Ghessan]

What Imran Khan has announced is basically providing subsidy for petrol. The only way I see this going forward is through burning our hard earned reserves

This will end poorly for Pakistan

https://twitter.com/x/status/1498315366392647684

that is what opposition wanted, IK fell for it. they used to do the same when in power and make people habitual of subsidies without which they can't live any more.

the other thing they do is, spend money on elections so whatever is left is drained before new govt arrive who face the music, they know they can't be elected consecutively.

 

[nahtanbob]

Simple answer: we are getting oil on deferred payment basis. Plus subsidies don’t eat up reserves they contribute to the budget deficit.

it is foreign debt eventually. Am I missing something ?

 

[Indos]

In the past until about 3 years ago, Indonesia Eastern part needs to buy expensive oil due to logistic cost, it includes Papua island. Nevertheless, no protest and they still can live quite content

 

[bananarepublic]

What weird is when you speak to local Pakistani they refer to the price of sugar and wheat as economic indicators but don’t realize the mountain of debt we been put under from previous administrations. We need to create better industries and break through with verticals which are unique to Pakistan only. Truth be told, I know ppl hate on Musharraf but I remember reading economics magazines in university and they used to list Pakistan as an emerging economy. Lol where are we now? A fing laughing stock of the world. Also, people don’t wanna work hard they wanna be sponsored abroad. A true catch 22. There is no incentive to continue life back home.

Your answers lies in the question as to why our leaders actively prevent people from getting education.
And why our current education system is devoid of critical thinking.
If you keep your people dumb enough, they won't ask the hard questions. As in "why are we piling debt" and " why is there excessive spending".
They will ask the simpler questions as in "subsidy q nahi de rahe ho"
This is an unfortunate fact of Pakistan

 

[Enigma SIG]

He has promised this till the next budget.
At $90 a barrel that will cost Pakistan $3 billion
At $100 of course this will cost more.

Who knew when IK was selected by Pakistan's real men of power that IK would leave Pakistan in a far worse state than Nawaz could ever manage.

PTI making sure to scuttle the ship before the clown brigade comes back to power again.

 

[Ghessan]

Apparently we ain't going for the next IMF tranche since this will be unacceptable to IMF. Also i think China has agreed to have a delay in some of the cpect debt for this year. Lastly MBS is expected to visit in few weeks as well may be deferred oil payment is on the cards as well.

i think we will go to IMF we can't escape. this relieve seems some other arrangement already planned outside IMF deal. what other reason PM IK says we are on track now.

deferred payment on oil is approved already, the facility is not yet availed.

MBS is a thing good for Pakistan if we play good otherwise he is a liability.