Tag: Economic crisis

  • ‘Mere aziz hum watno’: Shahid Khaqan says today’s situation is complete script for martial law

    Pakistan Muslim League-Nawaz (PML-N) senior leader and seasoned politician Shahid Khaqan Abbasi has warned of the possibility of martial law in Pakistan, citing political polarisation and economic crisis.

    Speaking on Dawn News‘ English show ‘Spotlight’, Khaqan said that the country “has never witnessed a more severe economic and political situation before. In much less severe circumstances the military has taken over.”

    The former Prime Minister (PM) hoped that the military isn’t considering taking over Pakistan, however, he said that “when they are left with no choice then the old famous speech, ‘mere aiziz hum watno’, if you read the situation today it’s a complete script for a speech like that.”

    He clarified that if the army were to take over, it would make things worse instead of doing any good.

    “When the system fails, when there is no interaction between the institutions, and when there is a conflict between them, then martial law always remains a possibility”, he said.

    He stressed the importance of dialogue and strong leadership but stated that the environment has become so toxic that even the parliament doesn’t discuss national issues.

    According to him, elections are not the kind of solution they used to be in the past.

    Pointing out that dialogues were supposed to have a purpose, Abbasi stated if they benefited only one political party, they would defeat their purpose. “If the intent is just to decide a date for the elections or the political benefits of one, it’s not a proper dialogue.”

    “Dialogue in media is all about abusing each other”, said the politician.

    According to him, it is unfortunate that his own party isn’t ready for dialogue. He said that he fears today that even the “youth has become delusional with this whole system” adding that Pakistanis themselves don’t recognise the potential of their country.

    At the last, he again stressed the responsibility of leadership, and that they should try to step in.

  • Pakistan shares plan with IMF to bridge $3 billion financing gap

    Pakistan shares plan with IMF to bridge $3 billion financing gap

    The coalition government of Pakistan has revealed its plan to the International Monetary Fund (IMF) for obtaining an additional $3 billion to fill the financing gap as it tries to persuade the lender to release the next loan tranche.

    In order to conclude talks with Pakistan regarding its delayed bailout, the IMF required “necessary” financing guarantees as soon as possible. Pakistan was asked to raise $6 billion in external financing, which is required by the country until June to avoid a potential default.

    This figure was determined on the assumption that the current account deficit would remain at around $7 billion in the current fiscal year. The IMF welcomed the recent announcement of financial support from key bilateral partners, but this support is inadequate for Pakistan’s requirements.

    Islamabad informed the IMF about its plan to secure a $450 million second Resilient Institutions for Sustainable Economy (RISE-II) budget support loan, as well as its plans to obtain $1 billion from the Asian Infrastructure Investment Bank (AIIB) and other commercial banks, and to materialise pledges made at the Geneva moot. According to sources, once the staff-level agreement is signed with the IMF, it will become easier for Pakistan to obtain financing.

    Pakistan’s foreign exchange reserves have fallen to cover barely a month of imports following the stall in IMF funding in November, which was later complicated by snags over fiscal policy adjustments after officials from the lender visited Islamabad for talks in February. The fiscal policy adjustments were part of the ninth review exercise on a bailout package agreed upon in 2019, whose resumption is crucial for Pakistan to avoid the risk of defaulting on external payment obligations.

    Pakistan will receive another disbursement of more than $1 billion from the IMF programme before it ends in June, which will unlock other bilateral and multilateral financings for the country, helping to ease its financial difficulties.

    Programme loans from other multilateral agencies await completion of the IMF review, as reported by central bank governor Jameel Ahmad during the spring meetings of the lender and the World Bank in Washington.

  • Punjab govt imposes ‘complete ban’ on departmental iftar parties due to economic situation

    Punjab govt imposes ‘complete ban’ on departmental iftar parties due to economic situation

    The Services and General Administration Department (S&GAD) of Punjab has recently released a notification that prohibits government departments from organising Iftar parties.

    According to The News, the reason behind this move is the economic crisis faced by the country, and therefore, the government has advised against giving expensive gifts to departmental delegations during Ramzan. The notification, however, exempts diplomats and foreign guests from these bans.

    The notification highlights the significance of simplicity during the holy month and emphasizes the government’s commitment to celebrate it simply. It is essential to recognise Pakistan’s current economic circumstances and avoid hosting costly Iftar celebrations that might put a strain on the country’s financial resources.

    As a result, all government offices have been advised to follow these guidelines and avoid preparing lavish presents for local delegates. The administration acknowledges the importance of observing Ramzan in a more simple and conscientious manner that is consistent with the country’s economic position.

    This move by the Punjab government demonstrates a responsible and prudent approach towards managing the country’s resources during these challenging times. By promoting modest celebrations during Ramzan, the government aims to set an example for citizens and encourage them to prioritise their spending wisely.

    Furthermore, exempting foreign guests and diplomats from the ban ensures that Pakistan’s image remains positive while still taking necessary measures to address economic challenges.

  • Ministry of Finance halts clearing of bills including salaries due to deteriorating financial condition

    Ministry of Finance halts clearing of bills including salaries due to deteriorating financial condition

    The Ministry of Finance and Revenue has instructed the Accountant General Pakistan Revenues (AGPR) to stop clearing bills, including salaries, due to the current economic crisis and the deteriorating financial situation of the country. The ministry has also directed the halt of clearings of attached departments until further notice.

    According to The News, official sources have confirmed that operational cost-related releases have faced difficulties due to the economic hardships of the country. However, attempts to obtain a comment from Finance Division officials were unsuccessful, and the Minister for Finance Ishaq Dar promised to respond after confirming the report’s accuracy, which he had not done by the time of the report’s filing.

    Sources who went to the AGPR office for clearance of their outstanding bills were informed that the Ministry of Finance had directed them to stop clearing all bills, including salaries, due to the prevailing financial difficulties. The reasons for the immediate stoppage of the clearance of bills were not ascertained.

    The lingering financial difficulties are considered to be a significant reason for this move. However, salaries and pensions of defence-related institutions have already been cleared for the following month.

    During a meeting with a delegation of M/s Rothschild & Co on February 22, Finance Minister Ishaq Dar said that the government is committed to steering the economy towards stability and growth, and completing the International Monetary Fund (IMF) programme, and fulfilling all international obligations.

    To this end, on February 20, the National Assembly unanimously approved the Finance (Supplementary) Bill 2023, or ‘mini-budget’, which is mandatory for seeking the $1.1 billion tranche of the IMF. The bill increases sales tax from 17 to 25 per cent on imports ranging from cars and household appliances to chocolates and cosmetics, while a general sales tax was raised from 17 per cent to 18 per cent.

    As the bill was passed, the minister told the lower house of parliament that the prime minister would unveil austerity measures in the next few days, adding, “we will have to take difficult decisions.”

    UPDATE:

    The Finance Ministry has rejected the rumours that the government has instructed to stop payment of pay and pension.

    The ministry stated in a press release, “There are rumours floating around that Government has instructed to stop payment of pay, pension, etc. This is completely false as no such instructions have been given by Finance Division, which is the concerned federal ministry. AGPR has confirmed that pay and pension have already been processed and will be paid on time. Further, other payments are being processed as per routine.”

  • Rev up your budget: Atlas Honda hikes motorcycle prices by up to Rs35,000 amid economic crisis

    Rev up your budget: Atlas Honda hikes motorcycle prices by up to Rs35,000 amid economic crisis

    The two-wheeler segment’s largest player in Pakistan, Atlas Honda, has raised motorcycle prices following a significant hike in car prices.

    This marks the company’s second rate hike in February, as they already increased the prices of their motorcycles by an amount ranging between Rs7,400 and Rs30,000 earlier this month.

    The new prices became effective on February 15.

    Model Old Prices (Rs) New Prices (Rs) Hike (Rs)
    CD 70 128,900 137,900 9,000
    CD 70 Dream 137,900 147,500 9,600
    Pridor 170,900 181,500 10,600
    CG 125 194,900 205,900 11,000
    CG 125 Special Edition 230,900 243,900 13,000
    CB 125 F 303,900 330,900 25,000
    CB 150 F 383,900 418,900 35,000
    CB 150 F SE 387,900 422,900 35,000
    Latest Honda Bike Price Feb 2023

    During the Finance (Supplementary) Bill 2023, Finance Minister Ishaq Dar announced a rise in the general sales tax (GST) rate to 18%, which is expected to lead to price hikes for various industries and sectors.

    Amidst Pakistan’s ongoing economic crisis, the automobile sector has been significantly impacted due to the depletion of foreign exchange reserves and a weakening rupee, leading to issues with opening letters of credit.

  • Pakistan’s forex reserves increase by 9%, cross $3 billion mark

    Pakistan’s forex reserves increase by 9%, cross $3 billion mark

    After declining for three weeks in a row and losing a cumulative $1,685 million during that period, the foreign exchange reserves held by the State Bank of Pakistan (SBP) have rebounded, according to a statement from the central bank.

    As of February 10, SBP’s foreign currency reserves totaled $3,192.9 million, which is up $276 million from the previous week. This increase represents a gain of over 9 per cent and has broken the streak of declining reserves.

    However, even with this increase, the amount is still only enough to cover one month of imports. Meanwhile, the net forex reserves held by commercial banks are $5,509.3 million, which is $2,316.4 billion more than SBP, bringing the total liquid foreign reserves of the country to $8,702.2 million. The statement did not provide a specific reason for the increase in SBP-held reserves.

    Pakistan’s economy is in dire straits due to a balance-of-payments crisis, political chaos, and deteriorating security. The government has banned all but essential food and medicine imports until it receives a crucial loan tranche from the International Monetary Fund (IMF), which could unlock other sources of funding for the country.

    Inflation has risen sharply, the rupee has declined, and the country is struggling to afford imports, which has caused a severe decline in its industry. Pakistan is no longer issuing letters of credit, except for essential food and medicine, since January, which has led to a backlog of raw material imports that the country can no longer afford.

    According to Geo, the rupee devaluation and the logjam have resulted in a significant decline in manufacturing, including textiles and steel, and building projects.

    While the IMF cash injection alone will not be enough to rescue Pakistan, the government hopes that it will boost confidence and pave the way for other friendly countries like Saudi Arabia, China, and the UAE to offer additional loans.

  • Ministers decide to give up salaries amid economic crisis

    Ministers decide to give up salaries amid economic crisis

    A total of 12 federal ministers and three state ministers have decided to give up their salaries and work on voluntary basis due to the worsening economic crisis in the country.

    The ministers themselves proposed to Prime Minister (PM) Shehbaz Sharif that they will work without pay. The Premier has approved the request and appreciated their concern for the nation.

    This will be the very first time that such a large number of cabinet members will be serving without getting paid.

    It has also been reported that the Members of the National Assembly (MNAs) have decided to donate one-month salary each to the earthquake victims in Turkiye and Syria.

  • The petrol hike might make you cry but at least these hilarious memes won’t

    The petrol hike might make you cry but at least these hilarious memes won’t

    How do Pakistanis start a Sunday morning?
    Apparently, by learning about how their budgets will be stretched out even further.
    Pakistanis woke up on Sunday morning to learn that a new petrol hike had announced by the Finance Minister, Ishaq Dar. In a press conference, he revealed that a Rs 35 increase would be applied from 11 am on that very day.
    Well how do Pakistanis deal with the crashing economy, no electricity and crushing debt? With some killer memes.

    Well how do Pakistanis deal with the crashing economy, no electricity and crushing debt? With some killer memes.

    It sparked some ideas about some creative ways to travel.

    The superior gender FTW.

    *wink wink*

    Get her a diamond ring? Taking her on a date to an expensive restaurant? Ditch all of that because a better idea dropped.

    BRB learning how to speak in Korean

    PLEASE

    In other words:

  • World Bank cuts Pakistan’s GDP growth forecast from 4% to 2%

    World Bank cuts Pakistan’s GDP growth forecast from 4% to 2%

    Due to the unstable economy and floods, the World Bank predicted that Pakistan’s economic growth would drop by half, falling by 4 per cent to 2 per cent, during the current fiscal year.

    According to the Bank’s latest report, “Global Economic Prospects,” Pakistan is experiencing growing economic woes, especially those caused by the recent flooding as well as ongoing policy and political uncertainties.

    “Pakistan faces mounting economic difficulties and Sri Lanka remains in crisis. In all regions, improvements in living standards over the half-decade to 2024 are expected to be slower than from 2010-19,” the World Bank stated in Global Economic Prospects released on Tuesday.

    Pakistan’s currency declined by 14 per cent between June and December, and its national risk premium climbed by 15 per cent over this same time frame due to the nation’s low foreign exchange reserves and rising sovereign risk.

    It went on to say that growth is anticipated to pick up to 3.2 per cent in the fiscal year 2023–24 (FY24), still under previous forecasts, as the country implements policy measures to stabilise macroeconomic conditions, inflationary pressures subside, and reconstruction after the floods gets underway.

    According to the analysis, Pakistan’s recent floods are thought to have cost the country damage equal to 4.8 per cent of GDP.

  • ‘Irresponsible’: Fawad Chaudhry lashes out at govt after Miftah-Ishaq clash

    ‘Irresponsible’: Fawad Chaudhry lashes out at govt after Miftah-Ishaq clash

    Pakistan Tehreek-e-Insaf (PTI) leader Fawad Chaudhry took to Twitter to comment on the conflict between new Finance Minister Ishaq Dar and his predecessor Miftah Ismail over the recent Rs12.63 per litre petrol price cut by the government.

    Chaudhry said, “The irresponsible and contradictory statements of Dar and Ismail have complicated matters further regarding the IMF programme”, adding that the federal government comprises of the “most idiotic team” in the country’s history.

    Fawad further stated that the economic team of the country is “totally confused”.

    The PTI leader claimed that “Their [govt] politics have been buried. If [the government] is working, it is working to end their NAB cases.”

    Earlier, former finance minister Ismail said that the government’s decision to not increase the Petroleum Development Levy (PDL) this month without International Monetary Fund’s (IMF) approval is “reckless”.

    While the incumbent finance minister Dar said, “I have to handle the International Monetary Fund (IMF), so from now on, neither Miftah nor anybody else has to worry about anything.”

    On September 26, Dar landed in Pakistan after five years and took the charge of the finance ministry right after Ismail’s resignation.