Pakistan Debt

[ejaz007]

Agreed. Do you want to see luxury imports. Kindly visit our parliament both national and provincial.

In 21st century the seventh biggest population of the world is importing engines. Even Steel is being imported rather than iron ore.

Consumables such as tea amounts to 400 million of import bill. Our nation classify tea as necessity. But is it a necessity?

More than imports it is about export. During PMLN tenure our supports declines significantly, from 25 billion dollars to 20 and then raised back upto 23 billion which is criminal negligence on part of PMLN economic team

Just stand for an hour on the road and you shall see luxury imports. Imported vehicles costing in access of PKR 3 million running as if we are first world country.

Then visit a cash and carry shop. Imported drinks, cheese, fruits and kids stuff all available at very high prices. People buying the stuff as if it was produced in Gawal Mandi.

And then we come to know that we have a current account deficit.

Its peoples fault. Every one buys the stuff and then complaints about bad shape of the economy.

 

[The Accountant]

Just stand for an hour on the road and you shall see luxury imports. Imported vehicles costing in access of PKR 3 million running as if we are first world country.

Then visit a cash and carry shop. Imported drinks, cheese, fruits and kids stuff all available at very high prices. People buying the stuff as if it was produced in Gawal Mandi.

And then we come to know that we have a current account deficit.

Its peoples fault. Every one buys the stuff and then complaints about bad shape of the economy.

Cant agree more on this. Its our fault

 

[ejaz007]

The debt bomb

Listen

From 1947 to 2008:over the 61-year period we had four governor-generals, nine presidents and twenty-three prime ministers. All of them put together managed to accumulate a mere Rs6 trillion in debt. In 2008, our per capita debt stood at Rs36,000.

2008-13: Over the five-year period we had Asif Ali Zardari as president and two prime ministers – Yousaf Raza Gilani and Raja Pervez Ashraf. The three of them managed to take our debt from Rs6 trillion to Rs16 trillion. Over the five-year period we added a colossal Rs10 trillion worth of debt. Over the five-year period, on average, we were taking on Rs5.5 billion worth of debt every single day.

Over the 5-year period, the PPP government increased our per capita debt from Rs36,000 to Rs88,000. Imagine: it took us 61 years to accumulate Rs36,000 worth of debt on a per capita basis but a mere five years to more than double it to Rs88,000.

2013-2018: Over the 5-year period we had Mamnoon Hussain as president and two prime ministers – Mian Nawaz Sharif and Shahid Khaqan Abbasi. The three of them managed to take our debt from Rs16 trillion to Rs30 trillion. Over the five-year period we added a colossal Rs14 trillion worth of debt. Over the five-year period, on average, we were taking on Rs7.5 billion worth of debt every single day.

Over the five-year period, the PML-N government increased our per capita debt from Rs88,000 to Rs144,000.

2018-2019: over the one year period we had Dr Arif Alvi as president and Imran Khan as prime minister. The two of them have managed to take our debt from Rs30 trillion to Rs41 trillion. Over the one year period we have added a colossal Rs11 trillion worth of debt. Over the one year period, on average, we have taken on Rs30 billion worth of debt every single day. Imagine: we accumulated Rs30 trillion worth of debt in 71 years and an additional Rs11 trillion just in one year.

Over the one year period, the PTI government has managed to increase our per capita debt from Rs144,000 to Rs187,000. Alarmingly, debt taken on over a 71-year period now comprises 73 percent of our total debt and debt taken on over the past year now comprises 27 percent of our total debt.

The PTI’s mathematicians claim that they have taken on debt to pay off previous debt. Al-Khwarizmi, the Muslim mathematician during the Golden Age of Islam, is puzzled: if you have paid off previous debt then the final figure should be lower not higher. How come it is Rs11 trillion higher?

To be certain, PTI has simply taken on Rs11 trillion worth of additional debt. Yes, there is an element of devaluation in it but the same element of devaluation is present in all the previous calculations as well. We must compare apples with apples.

In 1971, every Pakistani man, woman and child owed Rs500. The same has since gone up to Rs187,00 in 48 years. Excessive public debt means higher rates of interest and a higher risk perception. A higher risk perception means investors will not invest or will demand a higher rate of return. All that means is little or no economic growth. Yes, excessive public debt is like “driving a car with the emergency brake on”.

The writer is a columnist based in Islamabad.

Email: farrukh15@hotmail.com Twitter: @saleemfarrukh

https://www.thenews.com.pk/print/576863-the-debt-bomb

 

[ziaulislam]

The debt bomb

Listen

From 1947 to 2008:over the 61-year period we had four governor-generals, nine presidents and twenty-three prime ministers. All of them put together managed to accumulate a mere Rs6 trillion in debt. In 2008, our per capita debt stood at Rs36,000.

2008-13: Over the five-year period we had Asif Ali Zardari as president and two prime ministers – Yousaf Raza Gilani and Raja Pervez Ashraf. The three of them managed to take our debt from Rs6 trillion to Rs16 trillion. Over the five-year period we added a colossal Rs10 trillion worth of debt. Over the five-year period, on average, we were taking on Rs5.5 billion worth of debt every single day.

Over the 5-year period, the PPP government increased our per capita debt from Rs36,000 to Rs88,000. Imagine: it took us 61 years to accumulate Rs36,000 worth of debt on a per capita basis but a mere five years to more than double it to Rs88,000.

2013-2018: Over the 5-year period we had Mamnoon Hussain as president and two prime ministers – Mian Nawaz Sharif and Shahid Khaqan Abbasi. The three of them managed to take our debt from Rs16 trillion to Rs30 trillion. Over the five-year period we added a colossal Rs14 trillion worth of debt. Over the five-year period, on average, we were taking on Rs7.5 billion worth of debt every single day.

Over the five-year period, the PML-N government increased our per capita debt from Rs88,000 to Rs144,000.

2018-2019: over the one year period we had Dr Arif Alvi as president and Imran Khan as prime minister. The two of them have managed to take our debt from Rs30 trillion to Rs41 trillion. Over the one year period we have added a colossal Rs11 trillion worth of debt. Over the one year period, on average, we have taken on Rs30 billion worth of debt every single day. Imagine: we accumulated Rs30 trillion worth of debt in 71 years and an additional Rs11 trillion just in one year.

Over the one year period, the PTI government has managed to increase our per capita debt from Rs144,000 to Rs187,000. Alarmingly, debt taken on over a 71-year period now comprises 73 percent of our total debt and debt taken on over the past year now comprises 27 percent of our total debt.

The PTI’s mathematicians claim that they have taken on debt to pay off previous debt. Al-Khwarizmi, the Muslim mathematician during the Golden Age of Islam, is puzzled: if you have paid off previous debt then the final figure should be lower not higher. How come it is Rs11 trillion higher?

To be certain, PTI has simply taken on Rs11 trillion worth of additional debt. Yes, there is an element of devaluation in it but the same element of devaluation is present in all the previous calculations as well. We must compare apples with apples.

In 1971, every Pakistani man, woman and child owed Rs500. The same has since gone up to Rs187,00 in 48 years. Excessive public debt means higher rates of interest and a higher risk perception. A higher risk perception means investors will not invest or will demand a higher rate of return. All that means is little or no economic growth. Yes, excessive public debt is like “driving a car with the emergency brake on”.

The writer is a columnist based in Islamabad.

Email: farrukh15@hotmail.com Twitter: @saleemfarrukh

https://www.thenews.com.pk/print/576863-the-debt-bomb

Writer might be mathematician but has 3rd grade skills on economics

Everyone knows you have to account for adjustments namely inflation devaluation.

Real test will be from this year on ward..what fiscal deficit would be retained

The only indicator of debt is % of GDP or % of revenues..

 

[shah_123]

Writer might be mathematician but has 3rd grade skills on economics

Everyone knows you have to account for adjustments namely inflation devaluation.

Real test will be from this year on ward..what fiscal deficit would be retained

The only indicator of debt is % of GDP or % of revenues..

The same third grader was appointed PTi's spokesperson on economy .......

 

[ziaulislam]

The same third grader was appointed PTi's spokesperson on economy .......

how come stating % GDP makes me a PTI supporter
PTI has done worse than nay other party in first year
it does make you illiterate..as i would expect any 10 th grader to know this

 

[ejaz007]

The same third grader was appointed PTi's spokesperson on economy .......

Ouch....

 

[ejaz007]

‘Govt took $10 bn loan from 24 countries, global lenders’

Listen

ISLAMABAD: The government has admitted to have obtained a total of $10.37 billion debt from different countries and international lenders up till September 30, this year.

In a written reply to a question in the National Assembly, Minister for Economic Affairs Hammad Azhar said the PTI government secured $10.37 billion from various governments and international institutions from August 14, 2018 to September 30, 2019.

The government during this period received $1.54 billion from China, $151.79 million from Saudi Arabia, $68.6 million from France, $0.4 million from Germany, $62.48 million from Japan and $0.01 million from Kuwait.

The government also obtained a total of $991.2 million loan so far from International Monetary Fund (IMF) during this period.

The government received a total $2.751 billion from multilaterals including $997.45 million from Asian Development Bank (ADB), $23 million from Asian Infrastructure Investment Bank (AIIB), $155.04 million from International Bank for Reconstruction and Development (IBRD), $556.05 million from International Development Association (IDA), $6.14 million form Islamic Development Bank (IDB), $922.84 million from IDB (short terms), $42.24 million from International Fund for Agricultural Development (IFAD), $8.36 million from Organisation of Petroleum Exporting Countries (OPEC Fund), and $39.8 million form ECOT/BANK.

The government obtained $4.805 billion loan from commercial banks including $365 million from Ajman Bank, $2.235 billion from Consortium of Chinese banks (ICBC, CDB, BOC), $150 million from Citibank, $410 million from DIB/Noor, $195 million from DIB, $500 million from Emirates NBD, $300 million from ICBD and $650 million from Credit Suisse.

https://www.thenews.com.pk/print/578798-govt-took-10-bn-loan-from-24-countries-global-lenders

 

[ejaz007]

Debt, liabilities soar to Rs 41.49 trillion
By ZAHEER ABBASI on February 1, 2020

Pakistan's total debt and liabilities have stood at Rs 41,489 billion on September 2019, reflecting an increase of Rs 11,610 billion over fiscal year 2018, according to Finance Ministry. Debt policy statement for fiscal year 2019-20 uploaded by the Finance Ministry on its website on Friday stated that total debt and liabilities stood at 94 percent of the GDP in fiscal year 2019 as opposed to 86.3 percent of the GDP in fiscal year 2018.

Total public debt has increased to Rs 34,241 billion at the end of September 2019 (77.8 percent of the GDP) from Rs 24,953 billion (72.1 percent of the GDP) and total debt of the government increased to Rs 29,300 billion in September 2019 from Rs 23,024 billion in fiscal year 2018.

Total public debt increased by Rs 7,755 billion during fiscal year 2018-19, out of which;(i) Rs 3,635 billion (47 percent) was borrowed for meeting the federal budget deficit;(99) Rs 3,061 billion (39 percent) was due to currency depreciation;(iii) Rs 927 billion (12 percent) was offset by higher cash balances necessary for effective cash management as the government is committed to zero borrowing from SBP in future; and;(iv) Rs 132 billion (2 percent) is difference between the face value (which is used for recording of debt) and the realized value (which is recorded as budgetary receipt) of Pakistan Investment Bonds issued during the year.

According to Finance Ministry, one of the developments from debt management perspective in fiscal year 2018- 19 was the re-profiling of domestic debt, where government re-profiled the existing stock of SBP borrowing from short term (6 months) to medium to long term (1 to 10 years). The re-profiling took into effect in the month of June 2019, which increased the share of long-term debt (permanent and unfunded) in total domestic debt from 46 percent at end June 2018 to 73 percent at end June 2019.

This structural shift has reduced the refinancing risk for the government as average time to maturity of domestic debt portfolio increased from 1.6 years at end June 2018 to 4.2 years at end June 2019 which is very close to the long-term target set by the government for its domestic debt portfolio, added the Ministry.

The government domestic debt has increased from Rs16, 416 billion in fiscal year 2018 to Rs 22, 650 billion in September 2019. The increase in domestic debt was Rs 1,918 billion during first quarter of fiscal year 2019-20 while government borrowing for financing of federal fiscal deficit from domestic sources was only Rs 308 billion during the period.

The Ministry stated that remaining increase in domestic debt was on account of increase in cash balances of the government by around Rs 1,610 billion. In the wake of government commitment to zero borrowing from SBP, a cash buffer is being maintained to meet short term liquidity needs of the government.

The size of the cash buffer keeps changing in line with the liquidity requirements. This is the normal cash management practice which is followed throughout the world whereby cash buffers are built in anticipation of the upcoming maturities/contingencies. The size of cash buffer has reduced significantly by end December 2019. Government borrowing for financing of federal fiscal deficit from external sources was Rs 166 billion during first quarter of fiscal year 2019-20 while external public debt stock decreased by Rs 385 billion.

The impact of exchange rate was favorable during first quarter of current fiscal year which decreased the rupee value of external public debt stock at end September 2019; Total Debt of the Government (Net Debt) decreased by Rs 221 billion during first quarter of FY 2019-20 which indicates that exchange rate gains on account of appreciation of Pak Rupee against US Dollar more than offset the increase caused by financing of fiscal deficit.

External debt and liabilities (EDL) stood at US$ 106.3 billion by end June 2019, registering an increase of US$ 11.1 billion. One half of the increase in EDL was due to rise in State Bank of Pakistan (SBP) liabilities in the form of deposits placed by bilateral partners (Saudi Arabia, the UAE, and Qatar). These deposits only provide balance of payments support, add to foreign currency reserves and do not come as an extra resource in the budget.

External public debt increased by US$ 3.2 billion during fiscal year 2018-19 compared with the increase of US$ 7.7 billion during fiscal year 2017-18. A sizeable repayment (US$ 7.4 billion) reduced the pace of external public debt accumulation during fiscal year 2018-19; PSEs external debt increased by US$ 1.3 billion mainly driven by development loans obtained by concerned PSEs; and private sector loans recorded an increase of US$ 1.2 billion, stated Finance Ministry.

https://www.brecorder.com/2020/02/01/567064/debt-liabilities-soar-to-rs-4149-trillion/

 

[ejaz007]

ADB approves $500m loan for social protection plans
ISLAMABAD: The Asian Development Bank (ADB) has approved a $500 million loan to help the Government of Pakistan...

Recorder Report June 11, 2020

ISLAMABAD: The Asian Development Bank (ADB) has approved a $500 million loan to help the Government of Pakistan deliver social protection programmes to the poor and vulnerable, expand health sector capabilities, and deliver a pro-poor fiscal stimulus to boost growth and create jobs as the country fights the coronavirus pandemic.

"The Covid-19 pandemic hit Pakistan at a critical point in its ongoing economic recovery programme," said ADB President Masatsugu Asakawa.

"We are fully committed to supporting Pakistan through this difficult period. This loan will help plug selected funding gaps as the government implements its countercyclical development plan, including strengthening the country's social safety net and health sector capacity."

The Covid-19 is expected to lead to a sharp decline in growth, revenue collection, and significant job losses in Pakistan. The country's health response is hampered by a low number of health workers relative to the population, and inadequate availability of hospital beds. The ADB's Covid-19 Active Response and Expenditure Support (CARES) Programme will support various government initiatives, including cash assistance payments to three million daily wage workers, of whom approximately 23 percent are women, and cash grants to 7.5 million families under the Kifalat Social Protection Programme.

The programme will also help fund the acquisition of additional ventilators and Covid-19 protective kits for medical staff, including appropriately sized personal protective equipment for women.

To prevent job losses, the loan will support young entrepreneurs, including at least 25 percent women, through the government's youth entrepreneur scheme, Kamyab Jawan.

The ADB's CARES Programme will facilitate parallel financing of $500 million from the Asian Infrastructure Investment Bank, and another $500 million from the World Bank's Securing Human Investments to Foster Transformation (SHIFT) development policy credit programme.

The CARES Programme was developed in close coordination with these development partners, the International Monetary Fund (IMF), and other bilateral donors.

The loan is funded through the Covid-19 Pandemic Response Option (CPRO) under the ADB's Countercyclical Support Facility.

The CPRO was established as part of the ADB's $20 billion expanded assistance for developing member countries' Covid-19 response, announced on 13th April.

The CARES Programme is part of the ADB's integrated package of support to help the Government of Pakistan's immediate efforts to mitigate the significant negative health, social, and economic impacts of the Covid-19 pandemic.

On 19 May, the ADB approved a $300 million emergency assistance loan to strengthen Pakistan's public health response to the pandemic, and help meet the basic needs of vulnerable and poor segments of the society.

On 9th April, the ADB reallocated $30 million from the National Disaster Risk Management Fund (NDRMF) Project and the NDRMF board of directors allocated an additional $20 million to procure medical equipment to strengthen hospitals, and other medical facilities in Pakistan.

In March, the ADB approved $2.5 million in grants to help Pakistan purchase PPEs and other medical supplies.

Copyright Business Recorder, 2020

https://www.brecorder.com/news/1003357/adb-approves-500m-loan-for-social-protection-plans

 

[ejaz007]

Pak foreign debt jacks up to $113 bn: State Bank

RAWALPINDI: The State Bank of Pakistan (SBP) Monday said the foreign debt was $96 billion in 2018 and the incumbent government took $17 billion foreign loan, jacking up the debt liability of Pakistan to $113 billion on June 30, 2020, daily Jang reported.

The central bank said $7 billion were added to Pakistan’s foreign debt in one year, as it was $106 billion on June 30, 2020. The incumbent government borrowed $1.7 billion from the International Monetary Fund (IMF), $1.20 billion from commercial banks and $1.20 billion from different countries.

Pak foreign debt jacks up to $113 bn: SBP

RAWALPINDI: The State Bank of Pakistan Monday said the foreign debt was $96 billion in 2018 and the incumbent government took $17 billion foreign loan, jacking up the debt liability of Pakistan to...

www.thenews.com.pk

 

[The Accountant]

Pak foreign debt jacks up to $113 bn: State Bank

RAWALPINDI: The State Bank of Pakistan (SBP) Monday said the foreign debt was $96 billion in 2018 and the incumbent government took $17 billion foreign loan, jacking up the debt liability of Pakistan to $113 billion on June 30, 2020, daily Jang reported.

The central bank said $7 billion were added to Pakistan’s foreign debt in one year, as it was $106 billion on June 30, 2020. The incumbent government borrowed $1.7 billion from the International Monetary Fund (IMF), $1.20 billion from commercial banks and $1.20 billion from different countries.

Pak foreign debt jacks up to $113 bn: SBP

RAWALPINDI: The State Bank of Pakistan Monday said the foreign debt was $96 billion in 2018 and the incumbent government took $17 billion foreign loan, jacking up the debt liability of Pakistan to...

www.thenews.com.pk

With 11 billion current account deficit in 2019 this was expected. Given the positive trend in current account deficit i expect that to start going down in next 1 or 2 years as by then we would have suffecient reserves to start reducing the loan.

For me the bigger problem is budget deficit which is still very high and due to corona and reduced world wide trading activities is not expected to going down anytime soon.

 

[FuturePAF]

With 11 billion current account deficit in 2019 this was expected. Given the positive trend in current account deficit i expect that to start going down in next 1 or 2 years as by then we would have suffecient reserves to start reducing the loan.

For me the bigger problem is budget deficit which is still very high and due to corona and reduced world wide trading activities is not expected to going down anytime soon.

We need to find avenues to generate revenue from all the infrastructure build with loans. Considering many of the projects are power generation related, and China is still growing, even during this crisis, we should try to see if we can link the power grids of Pakistan and China and sell our power to the Chinese, so vis versa, if we need more power in the future.

We need to show ROI on what has been build so far, before we should take out more debt, especially in power generation. We also need a path to profitability on all other aspects of money taken out through loans.

If any more money is to be borrowed it should be in generating more ROI then the principal and interest to at least make it sustainable. Modernizing agriculture, moving up the value added chain and finding markets for our products should be prioritized. It will help employ people and generate more tax revenue to inshallah close the budget gaps, and ease the burden on the average citizen.

 

[nahtanbob]

We need to find avenues to generate revenue from all the infrastructure build with loans. Considering many of the projects are power generation related, and China is still growing, even during this crisis, we should try to see if we can link the power grids of Pakistan and China and sell our power to the Chinese, so vis versa, if we need more power in the future.

We need to show ROI on what has been build so far, before we should take out more debt, especially in power generation. We also need a path to profitability on all other aspects of money taken out through loans.

If any more money is to be borrowed it should be in generating more ROI then the principal and interest to at least make it sustainable. Modernizing agriculture, moving up the value added chain and finding markets for our products should be prioritized. It will help employ people and generate more tax revenue to inshallah close the budget gaps, and ease the burden on the average citizen.

you got this one right - you have taken tens of billions in loans for infrastructure Try paying them back. If the coronavirus slowdown continues you are looking at financial disaster or the Chinese are looking at ten of billions in losses

 

[ejaz007]

Pakistan secures $5.688 bn external loans

ISLAMABAD: While officially confirming to have received $1 billion from China as safe deposits after paying back to Saudi Arabia, Pakistan has received a total $5.688 billion external loans during the first six months (July-Dec) of the current fiscal year 2020-21.

However, this time Islamabad managed lesser amount of $5.915 billion than the same period of the last fiscal. It indicates that Pakistan received $227 million less in the first six months of the current fiscal compared to the same period of the last financial year.

According to official figures of the Economic Affairs Division (EAD), during July-December of fiscal year 2020-21, the government received $5,688 million total external inflows from multiple financing sources, which are 46 percent of annual budget estimates of $12,233 million for the entire fiscal year 2020-21. In the corresponding period of the fiscal year 2019-20, the external inflows were $5,915 million which were also around (46 pc) of the annual budgeted amount of $12,958 million.

The total receipt of $5,688 million constitutes $1,634 million or 29pc as program, budgetary support assistance to restructure Pakistan’s economy; $2,054 million (36pc) as foreign commercial borrowing to repay maturing foreign commercial loans and $754 million (13pc) as project assistance to finance development projects activities for improving the socio-economic development of the country and for asset creation, $246 million (13pc) as commodity financing while $1,000 million (18pc) received as safe deposits from China.

Disbursement from multilateral and bilateral development partners also maintained a strong trend and stands at $2,633 million during the review period against the budgetary allocation of $5,811 million for fiscal 2020-21 on concessional terms with longer maturity. These healthy inflows have helped improve foreign exchange reserves and exchange rate stability.

Amongst the multilateral development partners, mainly the Asian Development Bank provided $1,120 million, World Bank disbursed $744 million against the budgetary allocation of $2,257 million. The bilateral sources, France, USA and China, provided $34.3 million, $70.5 million & $95.4 million res

Pakistan secures $5.688 bn external loans

ISLAMABAD: While officially confirming to have received $1 billion from China as safe deposits after paying back to Saudi Arabia, Pakistan has received a total $5.688 billion external loans during...

www.thenews.com.pk