What's new

Govt moves to ‘cool down’ an ‘over heating’ economy


As I said 7.5 is not a bad number. The good or the bad, the normal folks on the ground are not going to compare what inflation is around the region.
As I said 7.5 is not a bad number. The good or the bad, the normal folks on the ground are not going to compare what inflation is around the region.

Today inflation is way high, and people are not believing whatever justifications PTI fanboys are giving. If tomorrow (highly doubtful), PTI reverses the trend, no matter how much more better it is in other countries, folks are going to be content.
 
Our interest rate is at 7.25%. India is at 4%, others lower.

We are managing inflation better than other countries due to not passing down international commdoty prices to consumers.
Wrong that is why Inflation is causing more it has created demand. When demand is more than that it creates more artificial demand like Petrol prices.


If they had adjusted the prices from May 2021 than Inflation in Pakistan would been in 6% but now they are fixing the prices, creating shortages and giving subsidy is a disaster in the making and it will create more inflation because it will create demand and we importing this all, which will impact on exchange rate. Exchange rates goes down than all there subsidy will not matter 1 bit.


India interest rate is 4 because their inflation is 5 to 6% and our inflation is more than 9%. India fiscal policy is tight and they more than 12 months of import cover and we have only 3.2 months of import cover.
Reason of inflation and why it has already overheated?

Shaukat tarin has created artificial demand, which has to redone and whole the budget has to readjust, which i said in June 2021

 
Last edited:
Wrong that is why Inflation is causing more it has created demand. When demand is more than that it creates more artificial demand like Petrol prices.


If they had adjusted the prices from May 2021 than Inflation in Pakistan would been in 6% but now they are fixing the prices, creating shortages and giving subsidy is a disaster in the making and it will create more inflation because it will create demand and we importing this all, which will impact on exchange rate. Exchange rates goes down than all there subsidy will not matter 1 bit.


India interest rate is 4 because their inflation is 5 to 6% and our inflation is more than 9%. India fiscal policy is tight and they more than 12 months of import cover and we have only 3.2 months of import cover.

That is why we are tightening as a pre emptive measure not response. Due to international inflationary policy we can not afford the same amount of imports as before at the same time accommodating Vaccine and TERF rollout.

Our overall inflation is also lower than 9.7% as you posted. Quite the same for India.

Our is at 8.35% for both July and August, predicted is around the same level for September as well.

Do not quote last year's june number when calculating this years fiscal policy.

@Norwegian. Adjustments were made keeping going to imf and international commodity prices in mind. We can not afford $76+ crude. We need to keep the balance while preserving growth momentum.
 
Last edited:
That is why we are tightening as a pre emptive measure not response. Due to international inflationary policy we can not afford the same amount of imports as before at the same time accommodating Vaccine and TERF rollout.

Our overall inflation is also lower than 9.7% as you posted. Quite the same for India.

Our is at 8.35% for both July and August, predicted is around the same level for September as well.

Do not quote last year's june number when calculating this years fiscal policy.
Reza Baqir said Inflation will be 9% from October onward that why he increased the rate due to Inflation will increase he said the devaluation of 11% and CAD of 2.3 billion is the reason behind it.
 
Reza Baqir said Inflation will be 9% from October onward that why he increased the rate due to Inflation will increase he said the devaluation of 11% and CAD of 2.3 billion is the reason behind it.

Do not twist your words, you quoted June numbers to mislead. Accept it.

Yes that's what I said in my post. These are preemptive measures. Give a link to where he said that, so we can all see the complete context of what he said.

@Norwegian shameful that you tried to endorse someone who quotes figures out of context to do propaganda.
 
Last edited:
Do not twist your words, you quoted June numbers to mislead. Accept it.

Yes that's what I said in my post. These are preemptive measures. Give a link to where he said that, so we can all see the complete context of what he said.
They are no preemptive measures.

This is only option and now growth and the whole budget has gone in dustbin


 
They are no preemptive measures.

This is only option and now growth and the whole budget has gone in dustbin



Where is the 9% figure by Baqir?
Where did he say whole budget is in dustbin.

Growth will be sustainable.

Typical propagandist.
 
Where is the 9% figure by Baqir?
Where did he say whole budget is in dustbin.

Growth will be sustainable.

Typical propagandist.
I am saying the whole budget will be in dustbin because we have signed the budget with IMF that our CAD will be 2.3 billion dollar in whole FY not in just 2 months.

IMF will stop the growth at once, super interest rate hike, electricity prices hike, fiscal policy tight because it consumption growth and in Kamaran Khan show ,which you saw he said that our export is only 9% of GDP this year ,however, last FY our export was 10% of GDP and import is more than 20% means that it is causing 6% of CAD of GDP.

That whole budget redone because it was a pro import growth budget as simple as that because they give super concession on import of cars and luxury items and devaluation will not stop at any cost.


 
Govt moves to ‘cool down’ an ‘over heating’ economy
Finance Minister Tarin announces restrictive measures t slow down growth
Shahbaz Rana| September 23, 2021

finance minister shaukat tarin photo express

Finance Minister Shaukat Tarin. PHOTO: EXPRESS

Finance Minister Shaukat Tarin announced on Wednesday to take restrictive measures to “cool down” an “over heating” economy, marking the beginning of reversal of expansionary fiscal policies after external sector vulnerabilities exposed sooner than expected.
“It has been decided to introduce a 100% cash margin requirement for imports and impose regulatory duties to curb imports of non-essential items,” Tarin told a press conference – his second in less than 10 days to respond to increasing criticism over higher inflation.
“If [the new] measures are not taken, the economy could grow at more than 5% rate and this is the time to control the growth rate, the finance minister told the reporters, while explaining the reasons behind taking these measures.
“My concern is that the economy may overheat and there could be exchange rate related problems if the GDP growth rate exceeds above 5% annually,” he added, while responding to a question from The Express Tribune.
Before the budget, Tarin had been cautioned about the adverse impact of expansionary fiscal policies but the minister at that time had opined that the economy can sustain over 6% growth rate, finance ministry sources said.
Introduction of cash margins –where the importers are required to deposit cash in dollars in advance—and regulatory duties are considered import restrictive measures that are usually discouraged by the International Monetary Fund (IMF).
The government decided to take these steps after the two-month import bill exceeded $12 billion and the central bank called for urgent measures. The State Bank of Pakistan (SBP) has already increased the discount rate by 0.25% while also signalling a further increase at an appropriate time.
The SBP policy statement also pointed out things that the federal government has to do to minimise threats to external sector stability.
The message in the central bank’s monetary policy statement was that so far the reliance was only on exchange rate too and there was also a need to use monetary policy and fiscal policy tools “to cool down” the economy, said the finance minister.
“The fiscal side acceleration needs to be reduced to lower the heat and we are now closely monitoring the fiscal policy,” Tarin added. He said that fiscal operations were in line with the projections during the current fiscal year but the finance ministry was monitoring the situation.


Doubtful petrol prices comparison
Tarin and Special Assistant to Prime Minister on National Food Security Jamshed Cheema claimed during the press conference that petrol prices were the cheapest in Pakistan compared to the region. Compared with Rs123 per litre price in Pakistan, “the petrol price in India is 250 rupees per litre and 198 in Bangladesh”, Tarin said.
“The per-litre petrol price in Mumbai is Rs105.92,” an Indian journalist, who is a member of the South Asian Society for Economic Reporters (SASER), said. The SASER is an association for business and economic reporters of South Asia.
“It’s 90 taka per litre in Bangladesh,” said another SASER member journalist from Bangladesh. One litre petrol price is 157 rupees in Sri Lanka , according to a SASER member from Sri Lanka. The Nepalese SASER member said that the petrol was being sold at 129 in local rupee.
In order to avoid growing criticism, the government gave controversial figures by translating regional countries’ petrol prices by applying rupee-dollar parity. The Pakistani rupee closed at Rs168.68 to a dollar on Wednesday, compared with around Rs74 to a dollar Indian price. Even Afghani rupee is far stronger than Pakistani rupee.
The finance minister said that it has also been decided to slash taxes on edible oil to reduce their prices by Rs45 to Rs50 per kg. “The government will offer direct food subsidies to 40 to 42% people on the edible items,” he said.
Sugar will be available at Rs89.75 per kg across the country and wheat flour at Rs55 per kg for everyone and Rs43 for the poor people, said Cheema.
While commenting on the IMF talks, Tarin said that the power sector will be an issue and “we will try to find a solution to that”. He added: “There is no prior action on the power sector and everything will be discussed during these talks.” He again said that increasing tariffs was not a solution to the power sector’s problems.
The minister said that the government has shown progress in the revenue collection during the current fiscal year and it would expand the tax base by using technology. “Pakistan and the IMF are expected to begin programme review talks from October 4.”
Responding to a question about his six months ministerial term that is going to end on October 15th, the finance minister said, “I am not going anywhere and I have trust in the prime minister’s promise of getting me elected as senator.”
However, Imran Khan has not yet announced a schedule for his election, as it will require at least 23 days from the point of getting a seat vacated by a sitting senator and electing a new senator in his place.

@Desprado the most laughed at member here is proven right once again

@Patriot forever @AZ1 @Path-Finder @Del @Dual Wielder @ziaulislam @Mav3rick @farok84
Did our economy crashed?
As i said being preemptive is the job of the govt
This simply means that for the first time the govt and state bank ks doing its job..a job it never did in last 20 years

As i said the magical number is 2% of deficir or 6b$ deficit though in covid era you may allow more wiggle room due to transitory items like vaccines and medical equipment

This also means we need more export cover more rapid growth something that was in negative in last 10 years

@Desprado you were right PMLN did a crappy job with lower exports and remittances.
 
Did our economy crashed?
As i said being preemptive is the job of the govt
This simply means that for the first time the govt and state bank ks doing its job..a job it never did in last 20 years

As i said the magical number is 2% of deficir or 6b$ deficit though in covid era you may allow more wiggle room due to transitory items like vaccines and medical equipment

This also means we need more export cover more rapid growth something that was in negative in last 10 years

@Desprado you were right PMLN did a crappy job with lower exports and remittances.
Wrong. They are going to fire shaukat tarin regretting to fire Hafeez sheik and delayed IMF program.

It was pure stupid and expected outcome.

You just wait and see what kind condition IMF will give to Shaukat Tarin when he show that CAD of 2.3 billion was suppose to be done in whole FY but he just done in 2 months.

When you are IMF program than they do not allow CAD to exceed, which is why they choke the demand of economy now because of Shaukat Tarin blunder.

Imran Khan was desperate for early election, which backfired and due to that he paused IMF program, which also backfired same time.


Our economy is back to same level as 2019.

CDS Risk and Government uptake is same level as 2018 in just 5 months Shaukat Tarin.
 
I am saying the whole budget will be in dustbin because we have signed the budget with IMF that our CAD will be 2.3 billion dollar in whole FY not in just 2 months.

IMF will stop the growth at once, super interest rate hike, electricity prices hike, fiscal policy tight because it consumption growth and in Kamaran Khan show ,which you saw he said that our export is only 9% of GDP this year ,however, last FY our export was 10% of GDP and import is more than 20% means that it is causing 6% of CAD of GDP.

That whole budget redone because it was a pro import growth budget as simple as that because they give super concession on import of cars and luxury items and devaluation will not stop at any cost.


Will Shall,would future tense.
Wrong. They are going to fire shaukat tarin regretting to fire Hafeez sheik and delayed IMF program.

It was pure stupid and expected outcome.

You just wait and see what kind condition IMF will give to Shaukat Tarin when he show that CAD of 2.3 billion was suppose to be done in whole FY but he just done in 2 months.

When you are IMF program than they do not allow CAD to exceed, which is why they choke the demand of economy now because of Shaukat Tarin blunder.

Imran Khan was desperate for early election, which backfired and due to that he paused IMF program, which also backfired same time.


Our economy is back to same level as 2019.

CDS Risk and Government uptake is same level as 2018 in just 5 months Shaukat Tarin.
how much reserve we had in 2019?
 
Will Shall,would future tense.
See my June 2021 statement and i have never been wrong.

Imran Khan got wrong suggestion of early election in 2022, which was the reason to delay IMF program and fire Hafez Shiek. All backfired at the same time and now they go for a mini budget in late October and maybe without Shaukat Tarin because he is the one that bluffed PM we will have super high FDI, exports and RDA, which did not happen and FDI was only less 200 million dollar in whole 2 months.
 

Pakistan Defence Latest Posts

Back
Top Bottom