IMF warns Pakistan economy deteriorating

[karan.1970]

IMF warns Pakistan economy deteriorating | DAWN.COM

WASHINGTON: The International Monetary Fund (IMF) said Thursday that Pakistan’s economic situation was worsening and faces a return to double-digit inflation as the government prints money to finance its deficit.

In a mission report, the IMF said Islamabad urgently needed to address deep problems in its energy sector, including costly subsidies and poor distribution, while boosting growth to meet a rapidly growing population.

“Pakistan faces a challenging economic outlook. GDP growth in 2012/13 is projected to be in the 3-3.5 per cent range, which needs to accelerate in order to absorb the growing labour force,” the IMF said.

“Inflation has fallen recently but is expected to be back in double digits by the middle of next year if corrective measures are not taken to reverse monetary financing of the fiscal deficit.” It said the country’s external accounts are deteriorating, with incoming investment slowing and the central bank’s reserves dropping.

“Decisive and far-sighted action is needed to address this challenging outlook,” including raising taxes and cutting expenditures, especially subsidies, the IMF said.

It warned that allowing inflation to rise is hurting the population at large.

“Underlying inflation remains high and represents a regressive tax that disproportionately hurts the poor,” the IMF said.

 

[farhan_9909]

while inflation is in single digit
stock exchange Close to 16k points
adb revised growth rate to 3.7%
zardari curse is about ko end in 3-4 months

i dont see any reason pak growth below 4.5% next year

 

[luckycharm]

while inflation is in single digit
stock exchange Close to 16k points
adb revised growth rate to 3.7%
zardari curse is about ko end in 3-4 months

i dont see any reason pak growth below 4.5% next year

What worries me is the budget deficit, which is the reason the Pakistani government is printing more money, which is causing the inflation in the first place.

 

[Azazel]

while inflation is in single digit
stock exchange Close to 16k points
adb revised growth rate to 3.7%
zardari curse is about ko end in 3-4 months

i dont see any reason pak growth below 4.5% next year

Pakistan inflation is far from single digit.According to Pakistani economists Pak govt is manipulating Pakistan's inflation rate to desired level in view of nearing elections.Manipulating such a key macroeconomic indicator will be very damaging for pak economy.

Manipulating inflation - Dr Ashfaque H Khan

 

[India defense]

IMF should have warned much earlier...It is too late

 

[Azazel]

IMF should have warned much earlier...It is too late

It doesn't make much difference.Pakistan leaders don't care what happens to their economy,they know how ever bad it is International community will bail them out.If they really cared they would've implemented IMF bailout conditions last time.Next year another bailout is almost certain.Even though Pakistan won't meet any of the bail out condition some one will bail them out,because Pakistan's bankruptcy will have horrible consequences.

 

[regular]

IMF should have warned much earlier...It is too late

I guess our govt. is bribing IMF executives too.....

 

[veekysingh]

these facts are raw made.

 

[KRAIT]

Pakistan invested $ 500 million in Afghanistan for strategic purposes while it could be used for energy crisis which is affecting the industries hence economy.

It could ave used this money for its current projects for energy generation which are hanging in middle.

Prioritization and optimization is what is lacking.

Pakistan can provide alternative help to Afghan people for strategic purposes. It can work with China and do the development as Pakistan knows the Afghanistan and its people the best while China provide the money. Chinese won't be as welcomed as Pakistanis by Afghans. For them, Chinese are foreigners too and Pakistan is like their brother.


There is need for change of approach. India's investment in Afghanistan directly is due to lesser commonality with Afghans and aren't supported that much.

P.S. Kindly don't bring India's poverty to negate India's investment. After decades, India finally has got the chance to be in A-stan so its using the opportunity.

 

[Pioneerfirst]

PPP will leave nothing in the county, its election time.Enjoy so called "democracy"

 

[Safriz]

Musharraf the Dictators Era was much much better in economic terms than Zardari the Democrat...
Enjoy democracy

 

[illusion8]

Pakistan invested $ 500 million in Afghanistan for strategic purposes while it could be used for energy crisis which is affecting the industries hence economy.

It could ave used this money for its current projects for energy generation which are hanging in middle.



.

Dude Zardari hasn't released the 1 million he promised to Ajmer Durgah yet - you think he would have released 500 million to Afghanistan it was all hog wash. Lene ki aadat ho gayi hai dene ki nahi.

 

[KRAIT]

Dude Zardari hasn't released the 1 million he promised to Ajmer Durgah yet - you think he would have released 500 million to Afghanistan it was all hog wash. Lene ki aadat ho gayi hai dene ki nahi.

Zardari ne apne logon ko diye promises poore nahin kiye,
US ko diye hue promises poore nahin kiye,
China ko diye hue promises poore nahin kiya...

Aur kya hum expect kar sakte hain ki woh India ko diye hue promises poore kare...

 

[Pfpilot]

Pakistan invested $ 500 million in Afghanistan for strategic purposes while it could be used for energy crisis which is affecting the industries hence economy.

It could ave used this money for its current projects for energy generation which are hanging in middle.

Prioritization and optimization is what is lacking.

Pakistan can provide alternative help to Afghan people for strategic purposes. It can work with China and do the development as Pakistan knows the Afghanistan and its people the best while China provide the money. Chinese won't be as welcomed as Pakistanis by Afghans. For them, Chinese are foreigners too and Pakistan is like their brother.


There is need for change of approach. India's investment in Afghanistan directly is due to lesser commonality with Afghans and aren't supported that much.

P.S. Kindly don't bring India's poverty to negate India's investment. After decades, India finally has got the chance to be in A-stan so its using the opportunity.

The problem of inefficiency is key of course, but that is so for most third world nations (essentially why nations are ever poor in the first place). Where Pakistan compounds the problem and generally falls flat is in the generation of money; revenue generation has long been a massive disaster for governments, both democratic and military throughout Pakistani history. Ignoring the implementation of proper taxation greatly limits the available funds. On the other hand, the old British socialist economic system is still continued without the proper resources. The large number of crown corporations, nationalized mainly in the 70s, have absorbed the little money the government does have. If you are going to promise people health and education and then not deliver; not have money to properly equip and train your police; and cant afford basic infrastructure, the whole situation becomes exponentially worse. Now, not only do you have no money, you have an unhappy populous. A desperate and unhappy people are prime victims for those who prey on the needs of the public to further their own political and other other misguided aims, hence the growing extremist problem.

It is all interrelated, but as you rightly pointed out, we are not even remotely efficient with our funds, which we don't have enough of, to begin with. As pointed out by another member, the safety net that the international community provides to failing nations props up the completely failed system of government and economics of Pakistan. We cannot truly fail, because nations in the world will not let it happen to safeguard their own interests. By occupying the niche of complete basket case, we have invariably secured our own future in the global hierarchy...I know, we aren't exactly aiming high here.

Pakistan, today may be doing worse than it ever has, but the common man notices it only marginally; he was poor 10 years ago, he was poor 20 years ago; and he will be poor tomorrow. The suffering is almost intangible as after a while a little bit extra doesn't really add greatly to a doomed existence...a convoluted way of applying the law of diminishing returns to suffering. So if the people aren't willing to do anything; the government is content with incoming aid dollars; and our taxpayer-run organizations continue to throw money down a black hole: we will never succeed and never fail at the same time. Consider it a state of constant or perpetual misery, the consistency of which is quite incredible.

 

[Fireurimagination]

Dude Zardari hasn't released the 1 million he promised to Ajmer Durgah yet - you think he would have released 500 million to Afghanistan it was all hog wash. Lene ki aadat ho gayi hai dene ki nahi.

He has Ajmer Sharif dargah finally receives Zardari's R 5cr donation - daily.bhaskar.com