Pakistan tops list of 26 countries from emerging markets: IMF

[S_O_C_O_M]

Pakistan tops list of 26 countries from emerging markets: IMF​

Mehtab Haider
Friday, October 19, 2012
From Print Edition


ISLAMABAD: Where gross financing needs are concerned, Pakistan tops the list of 26 countries from emerging markets, says an IMF report. According to the Fiscal Monitor 2012 released this month, Pakistan needs finances worth 31 percent of its GDP in order to cover a budget deficit of 7.2 percent and meet its short-term borrowing obligations.



Significantly, the IMF’s data sheet estimates the country’s budget deficit at 7.2 percent of GDP for FY 2013, despite Islamabad’s continued insistence that it will meet its desired target of just 4.7 percent of GDP.



According to finance ministry estimates for FY13, one percent of GDP will be worth some Rs236 billion. Accordingly, if – in line with IMF projections – the size of the budget deficit comes to 7.2 percent of GDP, the government will need to cough up some Rs 1.7 trillion to finance it.



However, claims the reports, the biggest blow to the government’s finances will be its obligations pertaining to its short-term borrowing. Over the course of the financial year, the maturation of short term instruments such as T-bills will lead to a net drain of approximately Rs 4 trillion. Add the long term obligations of the government and the domestic debt repayments for the year go to Rs5.62 trillion (or 23.8 percent of GDP).



“The gross financing needs of the country will be even higher than the total outlay of the consolidated budget for FY13, which was Rs4.72 trillion or 20 percent of GDP,” a senior official of the finance division confirmed to The News on Thursday.



Comparatively, the average for financing needs in these 26 countries is just 7.8 percent of GDP. The total financing needs for Brazil stood at 17 percent of GDP, Hungary 18.9 percent, India 11.3 percent, Morocco 13.5 percent, Poland 11.6 percent, Mexico 10.4 percent, Romania 10.6 percent, Ukraine 14.3 percent, Philippine 9.9 percent, Turkey 10.3 percent, Thailand 9.1 percent, Lithuania 8.4 percent, China 5.6 percent, Argentina 6.8 percent, Malaysia 6.3 percent, Jordan 5.6 percent, South Africa 5.6 percent, Latvia 5.7 percent, Colombia 6.4 percent, Indonesia 3.4 percent, Bulgaria 3.4 percent, Chile 1.8 percent, Russian Federation 1.9 percent, Peru negative 0.4 percent and Kazakhstan negative 2.1 percent of GDP.



Meanwhile, former finance ministry adviser Dr Ashfaque H Khan says that even the IMF budget deficit estimate of 7.2 percent of GDP may be on the conservative side.



“I think the deficit will be higher than eight percent of GDP, given that this is an election year and there will be slippages on both the revenue and expenditure side,” he said.



Further, points out Khan, the bulk of this amount is related to the maturing of T-bills. “We’ve seen a shift in domestic borrowing, which has moved from long-term instruments to short-term instruments,” he argues. “This has created immense vulnerability within debt management and the conduct of monetary policy. In the second quarter alone, T-bills worth some Rs 1.13 trillion will be maturing, which is equivalent to $12 billion.”


Pakistan tops list of 26 countries from emerging markets: IMF - thenews.com.pk

 

[au090419]

funny thread............hahahhahahahahah

 

[Jade]

"Where gross financing needs are concerned, Pakistan tops the list of 26 countries from emerging markets, says an IMF report"

Is not it bad - topping the list where your probability of default and bankruptcy is the highest among all emerging markets. Seems S_O_C_O_M could not understand the article

 

[Spring Onion]

From where the govt will cough up Rs 1.7 trillion to finance the budget deficit of 7.2 percent of GDP??

seems more IMF unjust demands and poor Pakistanis in the grind mill

 

[illusion8]

"Where gross financing needs are concerned, Pakistan tops the list of 26 countries from emerging markets, says an IMF report"

Is not it bad - topping the list where your probability of default and bankruptcy is the highest among all emerging markets. Seems S_O_C_O_M could not understand the article

looks like it, but why does Pakistan need 31% of GDP - that's about 70-80 billion $ to cover 7.2% fiscal deficit? - some economist care to explain pls?

 

[Jade]

looks like it, but why does Pakistan need 31% of GDP - that's about 70-80 billion $ to cover 7.2% fiscal deficit? - some economist care to explain pls?

The financing needs include deficit+short term borrowing+long term borrowing, hence 31%(7.2%+23.8%)

 

[Bobby]

Pakistan tops in its pathetic situation.......that's what report says......

 

[kam83]

Pakistan tops in its pathetic situation.......that's what report says......

And they will continue to top coz everyone is busy praying for India's Economic downfall ....

 

[Azazel]

Pakistan tops list of 26 countries from emerging markets: IMF​

Mehtab Haider
Friday, October 19, 2012
From Print Edition


ISLAMABAD: Where gross financing needs are concerned, Pakistan tops the list of 26 countries from emerging markets, says an IMF report. According to the Fiscal Monitor 2012 released this month, Pakistan needs finances worth 31 percent of its GDP in order to cover a budget deficit of 7.2 percent and meet its short-term borrowing obligations.



Significantly, the IMF’s data sheet estimates the country’s budget deficit at 7.2 percent of GDP for FY 2013, despite Islamabad’s continued insistence that it will meet its desired target of just 4.7 percent of GDP.



According to finance ministry estimates for FY13, one percent of GDP will be worth some Rs236 billion. Accordingly, if – in line with IMF projections – the size of the budget deficit comes to 7.2 percent of GDP, the government will need to cough up some Rs 1.7 trillion to finance it.



However, claims the reports, the biggest blow to the government’s finances will be its obligations pertaining to its short-term borrowing. Over the course of the financial year, the maturation of short term instruments such as T-bills will lead to a net drain of approximately Rs 4 trillion. Add the long term obligations of the government and the domestic debt repayments for the year go to Rs5.62 trillion (or 23.8 percent of GDP).



“The gross financing needs of the country will be even higher than the total outlay of the consolidated budget for FY13, which was Rs4.72 trillion or 20 percent of GDP,” a senior official of the finance division confirmed to The News on Thursday.



Comparatively, the average for financing needs in these 26 countries is just 7.8 percent of GDP. The total financing needs for Brazil stood at 17 percent of GDP, Hungary 18.9 percent, India 11.3 percent, Morocco 13.5 percent, Poland 11.6 percent, Mexico 10.4 percent, Romania 10.6 percent, Ukraine 14.3 percent, Philippine 9.9 percent, Turkey 10.3 percent, Thailand 9.1 percent, Lithuania 8.4 percent, China 5.6 percent, Argentina 6.8 percent, Malaysia 6.3 percent, Jordan 5.6 percent, South Africa 5.6 percent, Latvia 5.7 percent, Colombia 6.4 percent, Indonesia 3.4 percent, Bulgaria 3.4 percent, Chile 1.8 percent, Russian Federation 1.9 percent, Peru negative 0.4 percent and Kazakhstan negative 2.1 percent of GDP.



Meanwhile, former finance ministry adviser Dr Ashfaque H Khan says that even the IMF budget deficit estimate of 7.2 percent of GDP may be on the conservative side.



“I think the deficit will be higher than eight percent of GDP, given that this is an election year and there will be slippages on both the revenue and expenditure side,” he said.



Further, points out Khan, the bulk of this amount is related to the maturing of T-bills. “We’ve seen a shift in domestic borrowing, which has moved from long-term instruments to short-term instruments,” he argues. “This has created immense vulnerability within debt management and the conduct of monetary policy. In the second quarter alone, T-bills worth some Rs 1.13 trillion will be maturing, which is equivalent to $12 billion.”


Pakistan tops list of 26 countries from emerging markets: IMF - thenews.com.pk

When I saw the title,I thought Pakistan did something great.But this is horrible,7.2% budget deficit,domestic debt repayment 23% of GDP.
I can't imagine how Pakistan's FM sleeps at night.And the most funny part is OP gave it a Thumbs Up.

 

[Spring Onion]

When I saw the title,I thought Pakistan did something great.But this is horrible,7.2% budget deficit,domestic debt repayment 23% of GDP.
I can't imagine how Pakistan's FM sleeps at night.And the most funny part is OP gave it a Thumbs Up:

thats indeed horrible . But the corresponding situation currently in Pakistan is also not favourable.

 

[S_O_C_O_M]

And the most funny part is OP gave it a Thumbs Up.

I ment to give it a thumbs down. I posted this article to highlight our nation's vast financial problems. So that we can work towards better future.

 

[SHAMK9]

And they will continue to top coz everyone is busy praying for India's Economic downfall ....

dont flatter yourself sweet heart.

 

[Baby Leone]

1% of GDP = 236 it means Pakistan nominal GDP is somewhere 250 billion Dollars...

nyways Pakistan economic managers & govt really need to work hard.....

& about some usual idiots from india who thinks tht OP is apreciating (which doesnt shows from anyway in thread) the situation or Pakistanis are enjoying india's downfall (may be cz indians always do tht) but beleive me in Pakistan no one even know whts the GDP growth in india or wht india exports..

infact IMO Op give a big moral boast to indians...