Pakistan Federal Budget FY 2020-21: Analysis and Discussion Thread

[Patriot forever]

lower the interest rate , lower defense spending , get rid of loss making entities ,like private sector the pension bomb has to be taken care off ,for India we have nuke and its more then enough

Interest rates are determined by inflation, has to be set higher. We saw a peak in inflation due to stabilizing dollar rate to market value, no way we could keep subsidizing the dollar this policy had caused enough destruction already. Had to be done. But now the economy has absorbed the impact over the year inflation is now in single digits so is the interest rate.
2ndly yes we should have just fired a nuke on India on 27th Feb, and told the world we did because that is the only thing we could afford. Be rational you cannot sustain a 6.5 lack nuclear equipped army in less than 8 billion.
Rest I agree with, will take time. A bit late in starting but going in the right direction now.
And yes the actual spending of PSDP was 796 billion by plmn. Out of which a substantial portion was FEC.

 

[volatile]

Interest rates are determined by inflation, has to be set higher. We saw a peak in inflation due to stabilizing dollar rate to market value, no way we could keep subsidizing the dollar this policy had caused enough destruction already. Had to be done. But now the economy has absorbed the impact over the year inflation is now in single digits so is the interest rate.
2ndly yes we should have just fired a nuke on India on 27th Feb, and told the world we did because that is the only thing we could afford. Be rational you cannot sustain a 6.5 lack nuclear equipped army in less than 8 billion.
Rest I agree with, will take time. A bit late in starting but going in the right direction now.
And yes the actual spending of PSDP was 796 billion by plmn. Out of which a substantial portion was FEC.

your post seems emotional here are few examples 1971 BD exports 40 Billion US $ ,3 Billion Defence ,25 year pack with India ,Dollar is devalued and whose fault is this ? PTI itself subsidized dollar and till today it is done by all Govt

 

[Patriot forever]

your post seems emotional here are few examples 1971 BD exports 40 Billion US $ ,3 Billion Defence ,25 year pack with India ,Dollar is devalued and whose fault is this ? PTI itself subsidized dollar and till today it is done by all Govt

I do not know where you saw an emotional component in my post. Its just plain facts. Can't say the same thing about you, you are hell bent on proving something which is irrational.
Haha INDIA doesn't threaten to take part of Bangladesh territory, neither are we lead by an eunuch like Hasina. Your words are like a fantasy dream of Sharif who always wanted to get rid of army and walk on all 4's to appease India. No offence intended.
And yes Bangladesh defence budget has little to do with it rather it is better off then us because they run a balanced economy instead of an import based model like Sharif, care to quote us their trade deficit?
I think you have no idea of effect what subsidizing dollar to such an extent has on local economy or industry. The only think pti did was gradually lower the rupee over a period of 6 months instead of doing it overnight. Now its very much inline with market value.

 

[volatile]

I do not know where you saw an emotional component in my post. Its just plain facts. Can't say the same thing about you, you are hell bent on proving something which is irrational.
Haha INDIA doesn't threaten to take part of Bangladesh territory, neither are we lead by an eunuch like Hasina. Your words are like a fantasy dream of Sharif who always wanted to get rid of army and walk on all 4's to appease India. No offence intended.
And yes Bangladesh defence budget has little to do with it rather it is better off then us because they run a balanced economy instead of an import based model like Sharif, care to quote us their trade deficit?
I think you have no idea of effect what subsidizing dollar to such an extent has on local economy or industry. The only think pti did was gradually lower the rupee over a period of 6 months instead of doing it overnight. Now its very much inline with market value.

you must be 12 , Cheers

 

[CriticalThought]

Interest rates are determined by inflation, has to be set higher. We saw a peak in inflation due to stabilizing dollar rate to market value, no way we could keep subsidizing the dollar this policy had caused enough destruction already. Had to be done. But now the economy has absorbed the impact over the year inflation is now in single digits so is the interest rate.
2ndly yes we should have just fired a nuke on India on 27th Feb, and told the world we did because that is the only thing we could afford. Be rational you cannot sustain a 6.5 lack nuclear equipped army in less than 8 billion.
Rest I agree with, will take time. A bit late in starting but going in the right direction now.
And yes the actual spending of PSDP was 796 billion by plmn. Out of which a substantial portion was FEC.

Interest rates are NOT determined by inflation, they are determined by money supply. If the central bank determines that money supply has increased throughout the economy, leading to increased inflation, only then interest rates are increased. This puppet government is setting interest rates on the commands of IMF who has only one aim: get the loans and interest back that it is owed. The interest rates have only been lowered during the COVID pandemic and I hypothesize it is because the economy could not sustain the double whammy of COVID and high rates. The IMF wants to keep Pakistan around so it can receive more interest in the future, which is why interest rates have been lowered.

 

[Patriot forever]

Interest rates are NOT determined by inflation, they are determined by money supply. If the central bank determines that money supply has increased throughout the economy, leading to increased inflation, only then interest rates are increased. This puppet government is setting interest rates on the commands of IMF who has only one aim: get the loans and interest back that it is owed. The interest rates have only been lowered during the COVID pandemic and I hypothesize it is because the economy could not sustain the double whammy of COVID and high rates. The IMF wants to keep Pakistan around so it can receive more interest in the future, which is why interest rates have been lowered.

Inflation has a huge part in determining interest rate, if it is kept lower people will stop depositing money in banks or buy bonds because in reality they did be loosing money, the return/profit on bonds and deposits gets lower as well furthermore more people are encouraged to take loans, more money enters into the market, as a result inflation further increases. It leads to a positive cycle.
If interest is kept higher then inflation, return on saving accounts / bonds increase, people earn money in terms of actual value, this encourages them to deposit money in banks. People are discouraged to take loans. Pulls money out of market causing decrease in inflation. A negative cycle.
Hope this clears the basics for you.

 

[CriticalThought]

Inflation has a huge part in determining interest rate, if it is kept lower people will stop depositing money in banks or buy bonds because in reality they did be loosing money, the return/profit on bonds and deposits gets lower as well furthermore more people are encouraged to take loans, more money enters into the market, as a result inflation further increases. It leads to a positive cycle.
If interest is kept higher then inflation, return on saving accounts / bonds increase, people earn money in terms of actual value, this encourages them to deposit money in banks. People are discouraged to take loans. Pulls money out of market causing decrease in inflation. A negative cycle.
Hope this clears the basics for you.

I already know what you are repeating here. This has nothing to do with why IMF's puppets change interest rates.

 

[American Pakistani]

Can someone state how much is defense budget percentage. To slap bhartis who keep claiming it to be 50%.

 

[Dr-who]

Inflation has a huge part in determining interest rate, if it is kept lower people will stop depositing money in banks or buy bonds because in reality they did be loosing money, the return/profit on bonds and deposits gets lower as well furthermore more people are encouraged to take loans, more money enters into the market, as a result inflation further increases. It leads to a positive cycle.
If interest is kept higher then inflation, return on saving accounts / bonds increase, people earn money in terms of actual value, this encourages them to deposit money in banks. People are discouraged to take loans. Pulls money out of market causing decrease in inflation. A negative cycle.
Hope this clears the basics for you.

Yes the core thinking is increasing savings to gdp ratio, investment to gdp ratio and then increasing the share of industry in the gdp

 

[Patriot forever]

I already know what you are repeating here. This has nothing to do with why IMF's puppets change interest rates.

Hahaha ' Interest rates are NOT determined by inflation' , isn't this what you said?
Interest rate has a direct impact on inflation and vice versa. Interest rates are adjusted in relation to inflation, thats what the state bank did. They pulled the money out of market to decrease inflation. They have repeatedly told in their pressure's that they will constantly adjust interest rate in relation to inflation figures. Now our inflation is in single digits so is our interest rate.

On a side note, I didn't want to say this but since you said it first, PLMN was a bigger prostitute of IMF since they went multiple times.

 

[Norwegian]

your post seems emotional here are few examples 1971 BD exports 40 Billion US $ ,3 Billion Defence ,25 year pack with India ,Dollar is devalued and whose fault is this ? PTI itself subsidized dollar and till today it is done by all Govt

No PTI is following market exchange rate after orders from the IMF

Interest rates are NOT determined by inflation, they are determined by money supply. If the central bank determines that money supply has increased throughout the economy, leading to increased inflation, only then interest rates are increased. This puppet government is setting interest rates on the commands of IMF who has only one aim: get the loans and interest back that it is owed. The interest rates have only been lowered during the COVID pandemic and I hypothesize it is because the economy could not sustain the double whammy of COVID and high rates. The IMF wants to keep Pakistan around so it can receive more interest in the future, which is why interest rates have been lowered.

And kindly tell us why this puppet government was forced into IMF loans once again after delivering lands of milk and honey at 6 percent growth during pmln govt?

I already know what you are repeating here. This has nothing to do with why IMF's puppets change interest rates.

So stop doing over consumption. This will also stop govts going back to IMF again and again. Simple

Can someone state how much is defense budget percentage. To slap bhartis who keep claiming it to be 50%.

It's around 18 percent same as education budget

 

[CriticalThought]

Hahaha ' Interest rates are NOT determined by inflation' , isn't this what you said?
Interest rate has a direct impact on inflation and vice versa. Interest rates are adjusted in relation to inflation, thats what the state bank did. They pulled the money out of market to decrease inflation. They have repeatedly told in their pressure's that they will constantly adjust interest rate in relation to inflation figures. Now our inflation is in single digits so is our interest rate.

On a side note, I didn't want to say this but since you said it first, PLMN was a bigger prostitute of IMF since they went multiple times.

They are all losers, PML N, PPP, PTI. Let's get this out of the way.

And you have only partially quoted me. I said interest rates are increased when it is determined that an increased money supply has led to inflation. You are continuously and conveniently ignoring the money supply factor. Inflation can increase because of cartelization/monopoly/oligarchy. Should the government increase interest rates? No! Inflation can increase due to artificially created supply shortage. Should the rates be increased? No! Inflation can increase because a class division exists where an increasingly rich class is exploiting the poor and aggrandizing the resources within the country. Should rates be increased? No!!! This last one is the reality of Pakistan. Still, the puppets increased interest rates on the demands of their masters because this actually leads to increase in inflation. Just as a higher interest rate can curb inflation, an artificially high interest rate can be use to induce inflation so that the people at the top can mint more money. This is the IMF prescription which traitors on this forum shamelessly defend by saying things like "Yes, don't pay taxes then ask for XYZ", or "This is short term pain we have to go through".

Second, what you are saying about state bank 'pulled the money out of market' is absolute hogwash. The state bank has been continuously printing money which the IMF 'lord' Hafiz Shaikh tried to curb. I spoke out against that measure, because had that happened, there would be an actual shortage of money and State of Pakistan would be unable to pay salaries. This was the last straw that broke the camel's back, and Hafeez Shaikh has since taken the back seat. So although the interest rate has increased, it has led to increased inflation whereby businesses are charging consumers more for the same services. This is how IMF is making its money, as I explained in the last para as well.

No PTI is following market exchange rate after orders from the IMF


And kindly tell us why this puppet government was forced into IMF loans once again after delivering lands of milk and honey at 6 percent growth during pmln govt?


So stop doing over consumption. This will also stop govts going back to IMF again and again. Simple


It's around 18 percent same as education budget

I never said it is solely PTI's fault. I am saying PTI is continuing the campaign of slavery started by their predecessors. All of them answer to the same foreign masters. And the dead giveaway is the complete and unconditional capitulation to IMF demands by Imran Khan. Pakistani negotiators were not even allowed to present their case properly, and the final agreement signed with IMF has become a 'matter of national security'. What an absolute joke!!!! This is saying in so many words that they have given the country over to IMF, but the illiterate population in the country cannot understand what is being done to them and their future generations.

 

[Norwegian]

The state bank has been continuously printing money

Hence increasing inflation

And the dead giveaway is the complete and unconditional capitulation to IMF demands

So don't go to IMF again and again. You think Pakistan is some exceptional heroic nation that must not accept IMF demands. Why? IMF don't need you. Pakistan does.

This is saying in so many words that they have given the country over to IMF

Stop this bull crap. Why don't you answer the original question why Pakistan keeps going back to IMF again and again and again? If other poorer nations can stand on their own feet without IMF, why Pakistan can't do that?

Pakistan is least hit after China due to coronavirus and yet opposition, liberal, lifafas crying end of the world

 

[CriticalThought]

Hence increasing inflation


So don't go to IMF again and again. You think Pakistan is some exceptional heroic nation that must not accept IMF demands. Why? IMF don't need you. Pakistan does.


Stop this bull crap. Why don't you answer the original question why Pakistan keeps going back to IMF again and again and again? If other poorer nations can stand on their own feet without IMF, why Pakistan can't do that?

Pakistan is least hit after China due to coronavirus and yet opposition, liberal, lifafas crying end of the world
View attachment 641384

A broke government printing money doesn't increase inflation, it is trying to make ends meet to pay salaries to employees a majority of whom are poor. Of course, in the past, we have heard about politicians receiving bags of money and that was one contributing factor in increasing the class division. I will repeat for your benefit that the Pakistani population is largely poor with no money in pocket and no money in the bank. It cannot earn benefits from increase interest rates, and it cannot create an increased demand. The common man on the streets does not want foreign make up, clothing, food, jewellery, etc. The common man is striving day by day to eek out a living.

Finally, keep your attitude in check and go ask you leader Imran Khan why he didn't commit suicide and instead went begging to the IMF. And even if he did, there was no reason to agree unconditionally to every single demand. The traitor needed an excuse, and the excuse was provided by the previous traitors. The whole lot is corrupt and sold to foreign masters.

Pakistan is least hit because when they did try to impose lockdown it led to unacceptable signs in the economy because of which they are not imposing the lockdown. So we are going to keep toiling hard to pay back IMF loans.

 

[Norwegian]

A broke government printing money doesn't increase inflation

Tell that to Venezuela or Argentine

Finally, keep your attitude in check and go ask you leader Imran Khan why he didn't commit suicide and instead went begging to the IMF.

By not going to IMF, Pakistan would have defaulted on its foreign debts and end up with hyper inflation situation just like Argentine and Venezuela these days