Will Pakistan’s Economy Improve After the IMF Loan?

[khail007]

It was PMIK's decision to go to IMF. He could have said no to the choice he made. He must have decided what serves Pakistan's national interests the best.

Thanks for the info ... but here I am not discussing the political aspect on right or wrong about loan but just an economical aspect of loan from IMF.
IMO with an example upon how to utilise it in improving the economy rather than to improve the methods of return of loan which are not going to affect upon overall improvement of economic situation of Pakistan.

 

[VCheng]

Thanks for the info ... but here I am not discussing the political aspect on right or wrong about loan but just an economical aspect of loan from IMF.
IMO with an example upon how to utilise it in improving the economy rather than to improve the methods of return of loan which are not going to affect upon overall improvement of economic situation of Pakistan.

Again, I am not being political, but it is up to the government to use the present bailout as it sees fit in improving the economy or not. It has the money to improve the economic situation by implementing the structural reforms needed, as it has promised to do.

 

[Pakistansdefender]

The choice of what to do is with Pakistan, of course.

If choice is given they would still not do it .
Imf would withdraw if we do not meet their requirements. So you see we have to .
Read the full imf agreement when it is released on 3rd of July .

 

[VCheng]

If choice is given they would still not do it .
Imf would withdraw if we do not meet their requirements. So you see we have to .
Read the full imf agreement when it is released on 3rd of July .

I am waiting for the agreement to become public after due process. We shall soon know.

 

[JohnWick]

May be but dollar high rate is the real issue in these days....

 

[VCheng]

May be but dollar high rate is the real issue in these days....

These are just temporary jitters that will settle down once the IMF program is known and starts being implemented by the government.

 

[khail007]

Again, I am not being political, but it is up to the government to use the present bailout as it sees fit in improving the economy or not. It has the money to improve the economic situation by implementing the structural reforms needed, as it has promised to do.

You are right overall definitely it is government's decision.
Here the question is about how to effectively utilising it in improving overall economic situation of Pakistan and for that I had given an example. Rest economists/planners know better than us the ways of improvement.

 

[Pakistani Fighter]

The Pakistan economy is going through some hard times and it is due to receive financial support from the IMF in the following weeks. The fiscal year 2018-2019 did not work how the PTI (Pakistan Tehreek-e-Insaaf) government expected, with most of the economic indicators well below their estimates.

GDP much lower than anticipated

Real GDP growth for the ongoing fiscal year dropped to 3.29%, well below an already revised estimate of 5.4%. The provisional GDP expansion was initially expected to come at 5.8% but the incumbent regime constituted a committee that revised downward the estimates.

Agriculture, manufacturing, and the construction sector, which had been the main drivers for growth until last year, performed well below their estimates. In US dollar terms, the Pakistan economy shrunk to $291 billion this year, as compared to $315 billion in the previous fiscal year.

View attachment 565607

Source: pixabay.com

Alt text: Pakistan economy 2019

The budget deficit is expected to reach new highs, estimated at 7.6% as a percent of the GDP, due to expenditures overrun.

Trading (not just online through FINQ or other brokerage companies) is expected to suffer and the only hope lies in the financial aid which is due to being received from the IMF, one that could have a meaningful impact on the government’s ratings.

$6 billion from the IMF

PTI’s government will receive a $6 billion loan from the IMF in the next few weeks, as it literally has no place to turn for financial support. The incoming financial assistance will be one of the potentially bad implications for the government in Pakistan.

Imran Khan, the country’s prime minister, had built a campaign discourse against international institutions like the IMF, and now, due to his team’s lack of knowing the country’s limits, he needs to accept help from the very institution he condemned.

The International Monetary Fund is in a better position in the negotiation process, and for the next few years, it will be able to implement an economic policy that will hardly be under government’s control.

Whether the government will manage to survive the rise of inflation and unemployment is still uncertain. However, the IMF program must put the economy back on its track, so the country won’t need new assistance three years later when the bailout package ends. In the meantime, uncertainty is expected to increase as pressure will be high on the current PTI government.

No it wont. Niazi has sold us to IMF. SBP head is IMF man now

 

[VCheng]

You are right overall definitely it is government's decision.
Here the question is about how to effectively utilising it in improving overall economic situation of Pakistan and for that I had given an example. Rest economists/planners know better than us the ways of improvement.

We will soon know during the rest of the term of the present government. The IMF plan is only for three years and PMIK still has more time left in his term than three years.

No it wont. Niazi has sold us to IMF. SBP head is IMF man now

No. PMIK has decided in the best interests of Pakistan.

 

[BHarwana]

The Pakistan economy is going through some hard times and it is due to receive financial support from the IMF in the following weeks. The fiscal year 2018-2019 did not work how the PTI (Pakistan Tehreek-e-Insaaf) government expected, with most of the economic indicators well below their estimates.

GDP much lower than anticipated

Real GDP growth for the ongoing fiscal year dropped to 3.29%, well below an already revised estimate of 5.4%. The provisional GDP expansion was initially expected to come at 5.8% but the incumbent regime constituted a committee that revised downward the estimates.

Agriculture, manufacturing, and the construction sector, which had been the main drivers for growth until last year, performed well below their estimates. In US dollar terms, the Pakistan economy shrunk to $291 billion this year, as compared to $315 billion in the previous fiscal year.

View attachment 565607

Source: pixabay.com

Alt text: Pakistan economy 2019

The budget deficit is expected to reach new highs, estimated at 7.6% as a percent of the GDP, due to expenditures overrun.

Trading (not just online through FINQ or other brokerage companies) is expected to suffer and the only hope lies in the financial aid which is due to being received from the IMF, one that could have a meaningful impact on the government’s ratings.

$6 billion from the IMF

PTI’s government will receive a $6 billion loan from the IMF in the next few weeks, as it literally has no place to turn for financial support. The incoming financial assistance will be one of the potentially bad implications for the government in Pakistan.

Imran Khan, the country’s prime minister, had built a campaign discourse against international institutions like the IMF, and now, due to his team’s lack of knowing the country’s limits, he needs to accept help from the very institution he condemned.

The International Monetary Fund is in a better position in the negotiation process, and for the next few years, it will be able to implement an economic policy that will hardly be under government’s control.

Whether the government will manage to survive the rise of inflation and unemployment is still uncertain. However, the IMF program must put the economy back on its track, so the country won’t need new assistance three years later when the bailout package ends. In the meantime, uncertainty is expected to increase as pressure will be high on the current PTI government.

My opinion on what IMF loan will do to Pakistan.

Pakistani economy has a major problem and what is that? Trade deficit.

There is a huge gap between imports and exports. This gaps results in depleting the foreign reserves further. Now what will IMF loan do IMF loan will help both IMF and Pakistan. How? Pakistan has taken loans from IMF to facilitate this balance of payments in past and if IMF don't provides more loan Pakistan will default like any other country which has balance of payments difference. Like India has a similar problem like Pakistan but on a much bigger level and India has taken many loans to facilitate that balance of payments difference.

Pakistan needs to make sure that it's current economic policy continues in current track with high crack down on imports and focus on exports. The IMP loan is just a helping hand for making these policies work and facilitate important sectors.
End line keep economy in the current state for another year and reduce the trade deficit to zero and the IMF loan will help and make sure the trade deficit is never allowed to grow no matter how much foreign reserves we have and our economy will never have to suffer again.

 

[VCheng]

End line keep economy in the current state for another year and reduce the trade deficit to zero

It will take much longer than one year to reduce the deficit to zero, or even anywhere close to that.

 

[KhanBaba2]

And then, after that, things will get better.

In Sha Allah. Everything is In Sha Allah. The current state of the economy, when it will get better. Who becomes PM. Who became PM. Who runs the country. Everything.

 

[VCheng]

In Sha Allah. Everything is In Sha Allah. The current state of the economy, when it will get better. Who becomes PM. Who became PM. Who runs the country. Everything.

Please read the opening lines of the Objectives Resolution. Everything flows naturally from that.

 

[Syed1.]

Nothing will happen until we start building and exporting higher tech products and move out of the low-tech, low income textile industry while the textile barons haven't even invested any money to improve their own standards and conquer new markets. Need more focus on IT and engineering exports.

 

[khail007]

We will soon know during the rest of the term of the present government. The IMF plan is only for three years and PMIK still has more time left in his term than three years.

No. PMIK has decided in the best interests of Pakistan.

Let's weight and see how this government will separate the wheat from the chaff, provided if they will able to secure their term.