Shiblee Kamal’s Post

In the latest episode of "How Not to Manage an Economy," Pakistan has decided to skip out on an 11% interest loan from a commercial bank. Yes, you read that right! After much thought, the Finance Ministry finally realized that taking on more insanely expensive debt might not be the best move for our already booming economy. You know, the one where inflation is through the roof, unemployment’s a new sport, and the dollar hit Rs. 335? Prime Minister Shehbaz Sharif, in what can only be described as a rare moment of clarity, has directed the Finance Minister to avoid this costly loan. Shocked? Don’t be. This is the same leadership that sold state assets for pocket change, raised fuel prices to heights that make you consider a bicycle, and mismanaged the economy with all the finesse of a sledgehammer. But don’t break out the champagne just yet. The government's master plan now? Running to the International Trade Finance Corporation and the Islamic Development Bank (IDB), begging for cheaper loans. Fingers crossed they don’t think 10.5% is a bargain. Oh, and in case you missed it, Pakistan is expecting a cool $1 billion more from the IMF this year, with another $2 billion next year. Yes, because adding more IMF loans to the pile has always worked out great for us, right? Here’s where it gets hilarious: despite the mounting loans, they have no idea how to pay them back. Maybe they’ll raise taxes again. Or better yet, hike fuel prices for the 50th time this year. Why stop at making life miserable for the public when you can really go for gold? And speaking of mismanagement, remember when Imran Khan was in power? The opposition was losing their minds over fuel prices at Rs. 150 and the dollar at Rs. 150. They marched from Karachi to Islamabad, rallying against inflation like it was the end of days. Fast forward to today – with Shehbaz Sharif and his crew in charge, we’re now seeing dollar rates at Rs. 335, and fuel prices that make you consider selling your car. But hey, no rallies now! Funny how things change. The real tragedy is that this government promised to fix everything. But instead of creating jobs for the youth, they decided to raise the age limit for government jobs to 43. Genius, right? Because what better solution to joblessness than allowing the old to compete for jobs meant for the young? With dynastic politics, corruption, and incompetence in full swing, Pakistan’s future looks as bleak as ever. The public suffers while the elite enjoy the show from their luxurious towers. #PakistanEconomy #ShehbazGovernment #PublicSuffering #LoanMadness #IMFLoans #FuelHike #PoliticalCorruption #InflationCrisis #PakistaniPolitics #EconomicMismanagement

Pakistan has decided against taking loans from a commercial bank at a higher interest rate. According to sources, the finance ministry has chosen not to proceed with borrowing from a commercial bank at an 11% interest rate. Prime Minister Shehbaz Sharif reportedly directed the finance minister to avoid taking expensive loans. Despite having previously arranged a loan with commercial banks at an 11% interest rate, the government has now decided not to accept the funds. In the event of a financing gap, the government will seek loans from other sources at lower interest rates, per sources familiar with the matter. It is also reported that Pakistan may secure up to $700 million in loans from the International Trade Finance Corporation and the Islamic Development Bank (IDB). Additionally, it is expected that Pakistan will receive $1 billion more from the IMF during the current fiscal year, with an additional $2 billion to follow next year. #Pakistan #loan #banks #tax #news

Pakistan is expected to pursue loans from institutions like the International Trade Finance Corporation and the Islamic Development Bank (IDB), potentially securing up to $700 million. Additionally, the country anticipates receiving $1 billion from the IMF during the current fiscal year, with another $2 billion expected in the following year. This strategy is aimed at managing the country’s debt more sustainably by minimizing reliance on expensive loans.

SBP Governor Jameel Ahmed reported that October remittances exceeded $3 billion, boosting foreign exchange reserves. The first-quarter FY25 remittances are up 39%, and reserves are projected to reach $13 billion by year-end, with an additional $500 million from the ADB expected this week. Despite this, Pakistan faces a $6.3 billion shortfall in debt servicing for FY25. The government is working to improve its debt profile by reducing reliance on short-term Treasury bills, which should lower interest payments, bringing the FY25 projection to Rs8.3–8.4 trillion.

So, here it is summed up what’s wrong with Pakistan’s economic affairs, 31% of the receipts shall be utilised to service the debts already incurred and 16% of the receipts shall go to foreign loan repayments. Interesting to note that 44% of the budgeted spending shall be filled up with further loans. So basically we are incurring more debts to repay the existing debts and interest thereon. Do you see Any hope of recovery from this situation reading these numbers #financebill2024 #pakistaneconomy

Pakistan's government has ramped up borrowing by 71% to Rs5.301 trillion between July and April, straining its budgetary balance and signaling heightened cash demands to cover deficits and debt interests. With interest costs skyrocketing to Rs4.2 trillion, consuming 61% of total revenue in the first half of FY24, analysts debate the State Bank of Pakistan's potential interest rate adjustments amidst easing inflation but looming economic adjustments per IMF discussions. Private sector loan demands remain subdued, contrasting the government's borrowing spree, as efforts towards an IMF staff-level agreement and structural reforms to boost tax revenue and manage sectoral debts take center stage. #pakistaneconomy #sbp #imf #bank #cash #liquidity #tax

I fear decline in Bank’s Profitability in the Year 2024-25 owing to below factors which may further have repercussions on Bank’s Employees Appraisal System for the respective period. 1. Expected Revocation of Court Stay orders on Additional 40% Tax on Banks Windfall income and SBP’s recent resolve to enforce additional punitive measures against Banks in this regard. Followed by latest deliberations under meeting with Senate committee on Banking and Finance. 2. Recent Surplus liquidity crisis (Followed by IMF $1.1 Billion injection to Government) might enable/compel banks to secure loans on minimum rates from autonomous/private sector  in order to circumvent additional 15% tax on non-adherence to benchmark criteria for ADR. #BanksinPakistan #EmployeesAppraisalSystem #MinistryofFinancePakistan State Bank of Pakistan (SBP) #PakistanBankersAssociation

In the last forty years, Pakistan has paid over $3.5 billion in interest on loans to the International Monetary Fund (IMF). This revelation was made during a meeting of the Senate's Standing Committee on Economic Affair, chaired by Senator Saifullah Abro, on Thursday at the Parliament House. The Ministry of Finance presented details of the loans and repayments made to the IMF so far. During the briefing by officials from the Ministry of Finance and the State Bank of Pakistan, it was disclosed that Pakistan has paid over $3.60 billion in interest to the IMF. The documents revealed that the interest paid amounts to over Rs1,000 billion in Pakistani currency. Over the past 30 years, Pakistan has borrowed approximately $29 billion from the IMF and has repaid more than $21.72 billion in the same period. In the last four years alone, Pakistan borrowed over $6.26 billion from the IMF and repaid $4.52 billion. Additionally, in the last four years, Pakistan has paid over $1.10 billion in interest to the IMF. In 2024, Pakistan borrowed $1.35 billion Special Drawing Rights (SDRs) from the IMF and repaid $646.69 million SDRs. #IMF #debt #Pakistan #news #Newspedia

Despite a #stable rupee, Pakistan’s federal government #debt surged to Rs67.8 trillion in May, with a record #increase of Rs1.73 trillion within #one month. This marks an average daily #addition of Rs56 billion, the #highest in recent #history. The State Bank of Pakistan (SBP) reported that the debt stock #rose from Rs66.1 trillion in April. The rupee's #appreciation against the US dollar helped #reduce external debt slightly from Rs22 trillion to Rs21.6 trillion over the past year. However, #domestic debt #spiked by Rs7.12 trillion in May alone, raising concerns about the finance ministry’s debt management. #Long-term debt increased by Rs1.4 trillion, while #short-term debt# grew by Rs356 billion. Interest payments on debt now consume 52% of the proposed Rs18.9 trillion budget for the fiscal year, exacerbating the country’s fiscal challenges. Additionally, the #power sector's #circular debt rose to Rs2.655 trillion, indicating ongoing financial instability despite tariff hikes. #DigitalPakistan #TechUpdate

More Debts to Repay the Existing Debts and Interest thereon..! Ultimately more taxes are implemented / applied on each budget with mainly targeting the Salaried Class ..! It seems like that worse years to come unless some rational visionary long term plans with clear outcomes are prepared, implemented and followed up.!