Pakistan economy very sick

[Matrixx]

Rather than printing money...borrow more...printing money will be suicidal....

 

[SMC]

Better trade relations with India is the only way out for Pakistan!!

 

[Jihad]

That's Zardari & his friends right there for you.
Good on the Pakistanis who basically let this man become the president together with that dimwit of a Prime Minister Gilani.
The sooner we have fresh elections the better, I mean, come on people, I cannot believe our president is the 2nd richest man of Pakistan with incredible wealth, and this bastard is corrupt to the bone, how can people in Pakistan be so stupid to let this man take charge. HE DOESN'T EVEN HAVE A DECENT COLLEGE DEGREE.

 

[DelhiDareDevil]

50% of Indians also have lack of access to toilets.

it was only a matter of time/ :L

 

[Hutchroy]

Unreliable indian source.

Reliable Pakistani source :

SBP warnings - The News

SBP warnings

The government insists that the economy is turning around and President Zardari would have us believe that milk and honey is flowing through the streets. The State Bank of Pakistan, however, begs to differ and, from the looks of its latest quarterly report, the Pakistani economy seems to be experiencing a near-death experience. The central bank has warned that risks to macroeconomic stability have increased, incessant government borrowing from the central bank is fuelling inflation and in the absence of serious measures in terms of governance, the economy is on the path of a downward spiral. A cursory reading of the report clearly indicates irresponsible government borrowing as being the major source of alarm. Government borrowing from the central bank reached Rs219.2 billion by the end of the second quarter of FY12 against the commitment of zero quarterly borrowing limit from the SBP. Interestingly, while the private sector’s demand for fixed investment loans and working capital has gone down, the profitability of commercial banks has witnessed a sharp increase, thanks to the government’s reckless borrowings. Even the most rudimentary understanding of economics is enough to know what this borrowing will do to the rate of inflation.

Additionally, the government’s GDP projection estimate of 4.2 percent is also unlikely to be realised and the figure is expected to hover between 3 and 4 percent max. Barring workers remittances, which increased to Rs6.3 billion dollars in the first half of the year, all other components of the current account deteriorated during the period under review. Export growth has slowed to 3.9 percent compared to 18.9 percent during the first half of the previous year. And the biggest challenge of all will be financing the current account deficit as both debt and non-debt inflows have declined. Add to this that energy shortage will plague production activities, especially in the industrial sector, and the scheduled repayment of IMF loans amounting to $1.1 billion during the second half of FY12 and the Pakistani economy is in royal trouble. The central bank has recommended that the achievement of the revised fiscal deficit is dependant on the realisation of envisaged surpluses from provincial governments, which are likely to be lower than expected; non-tax revenues, which depends on inflows into the Coalition Support Fund and the auction of 3G licenses; and strict control over expenditures. The government has only one option: to exercise its limited fiscal options with prudence and extreme caution. Senseless borrowing must give way to sensible planning. The burden of fuelling the economy now lies squarely on harnessing and developing domestic resources. Unfortunately, all we’ve seen is a trend of borrowing more, spending more, adding to inflation and adding to despair and there is little indication that things will change.

 

[v9s]

A reliable source tells me we're having trouble paying off the IMF Debt. Expect the PKR-US exchange rate to cross Rs.100/$ by the end of the year.

 

[Hutchroy]

Duplicate - Self Delete

 

[VCheng]

A reliable source tells me we're having trouble paying off the IMF Debt. Expect the PKR-US exchange rate to cross Rs.100/$ by the end of the year.

The loan repayment schedule is impossible to meet without continuing IMF (i.e USA) help. That was entirely predictable following the recent deterioration in this crucial bilateral relationship, but once the parliamentary review is complete, some improvement can be expected.