Discover and read the best of Twitter Threads about #PakistanEconomicCrisis
Most recents (9)
Thread- WILL PAKISTAN DEFAULT OR NOT? Apparently, the biggest topic in Pakistan’s economy, to which everyone seems to have taken a liking, is the specter of Pakistan’s economic default. To be honest, it’s getting a bit boring by now, especially given that this issue has been 1/n
relentlessly dragged since PDM Govt. took over last year.The chances of a default last year, around this same time,were quiet high given the external and internal conditions. But Pakistan staved that off. Suddenly,out of nowhere,the issue has again gained substantial traction 2/n
, mainly due to commentary on it from some ‘well-known experts’.The publication of Khurram Hussain’s hard-to-comprehend article in DAWN dawn.com/news/1759654/s… a few days ago (link) got the tongues wagging full-time, profusely praised by none other than Atif Mian, arguably 3/n
Thread-WHAT EXPLAINS THE SHOCKING FALL IN GDP GROWTH?SOME THOUGHTS AND CONSIDERATIONS The announcement of real GDP at 0.29% for this FY set off a tweet storm on the issue. Majority of the commentary,as usual,had little to do with the matter, the issues involved what happened 1/n
to perpetuate such a precipitous fall in GDP from expected 5% at the start of the FY to 0.29%, etc. I’ll try to cut through the clutter, to understand the nuances involved, including aspects hitherto undiscussed. First and foremost, there’s good evidence that the figures are 2/n
fudged. @rogueonomist has good commentary on it here thenews.com.pk/print/1073998-… But my conviction of fudging has more to do with the history of Dar!For those who are recent followers, please read my thread on him which details his shenanigans since 1998 3/n
Despite the flaws in the system, the political elite and military leadership have failed to learn from their mistakes and continue to make decisions that are detrimental to the country's progress.
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#PakistanEconomicCrisis #PakistanArmy #Pakistan
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#PakistanEconomicCrisis #PakistanArmy #Pakistan
There is still time to rectify the situation and steer the country towards a better future, but failure to do so will have serious consequences for the entire nation. otherwise incase breakdown of law (which we all fear) and order in Pakistan would have
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consequences could lead severe and far-reaching. Civil unrest and political instability could escalate into full civil unrest,The potential for such a scenario is not to be taken lightly, as it can result destruction in every single mean.
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Real interest rates 🧵
So apparently people believe that positive real rates in 🇵🇰 will ⬇️ currency in circulation (CIC) & ⬆️ deposits.
This means ⬇️ consumption/⬆️ savings & voila the inflation bogeyman will be vanquished back to his hellhole.
1/7
#PakistanEconomicCrisis
So apparently people believe that positive real rates in 🇵🇰 will ⬇️ currency in circulation (CIC) & ⬆️ deposits.
This means ⬇️ consumption/⬆️ savings & voila the inflation bogeyman will be vanquished back to his hellhole.
1/7
#PakistanEconomicCrisis
On this basis they prescribe that rates should be jacked up to achieve positive real interest rates (RIR).
Unfortunately the data indicates otherwise and why I believe increasing interest rates at this time will be counterproductive when it comes to slowing inflation.
2/7
Unfortunately the data indicates otherwise and why I believe increasing interest rates at this time will be counterproductive when it comes to slowing inflation.
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Exhibit 1:
Between FY13 & FY20, Pakistan maintained on average positive real rates of 2.5%. During that time average CIC as a % of total money supply increased from 23.5% to 30.0%. Conversely banking deposits dropped from 76.4% to 69.8%.
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Between FY13 & FY20, Pakistan maintained on average positive real rates of 2.5%. During that time average CIC as a % of total money supply increased from 23.5% to 30.0%. Conversely banking deposits dropped from 76.4% to 69.8%.
3/7
PKR/USD🧵
Since hitting its peak of 276.6 the PKR has appreciated 4.6% against the USD.
Interestingly the REER as measured by JP MORGAN is near its all time lows of 83.2 against the 3 year average of 98.
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#PakistanEconomicCrisis #PakistanEconomy #KSE100
Since hitting its peak of 276.6 the PKR has appreciated 4.6% against the USD.
Interestingly the REER as measured by JP MORGAN is near its all time lows of 83.2 against the 3 year average of 98.
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#PakistanEconomicCrisis #PakistanEconomy #KSE100
Fundamentally the PKR seems undervalued which shows how acute the current liquidity crisis is with FX reserves exhausted at USD 3.0 billion.
The long term REER range indicates sharp reactions at 110 (depreciation) and 90 (appreciation).
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The long term REER range indicates sharp reactions at 110 (depreciation) and 90 (appreciation).
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Inflation differentials with our trading partners (US - 6.4% & China - 2.1%) will see a rapid rise in the REER if the nominal rate stabilizes here.
Ball park if you assume REER stability at 95, 🇵🇰 CPI to average 25%, then you should target a parity of ~280 by year end.
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Ball park if you assume REER stability at 95, 🇵🇰 CPI to average 25%, then you should target a parity of ~280 by year end.
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🚨 What if we told you that Americans have full control of Pakistan's nuclear installations
This happened today
This happened today
🔸 Pakistan will reduce it's military budget by 50%
🚨 Random question
If India was in a similar situation as Pakistan,
What would Pakistan have done?
Don't hold back
If India was in a similar situation as Pakistan,
What would Pakistan have done?
Don't hold back
🚨 Update
Containers at #Karachi port are unable to distribute their products
They have been stuck for more than a month
#PakistanEconomicCrisis
Containers at #Karachi port are unable to distribute their products
They have been stuck for more than a month
#PakistanEconomicCrisis
Pakistan was always doomed to be a failed state.
Excerpt from V.S. Naipaul's excellent book - Among The Believers.
[Picture Thread]
Excerpt from V.S. Naipaul's excellent book - Among The Believers.
[Picture Thread]
"Pakistan in Crisis: A Look at the Challenges Facing the Nation"
[THREAD🧵]
1) Depleting Foreign Reserves
Foreign reserves are necessary to cover the cost of imports, including nearly all of Pakistan's oil needs.
#PakistanBankrupt #PakistanEconomicCrisis
[THREAD🧵]
1) Depleting Foreign Reserves
Foreign reserves are necessary to cover the cost of imports, including nearly all of Pakistan's oil needs.
#PakistanBankrupt #PakistanEconomicCrisis
The nation currently has a remaining reserve that will last for only one month.
2) Pakistani Rupee Depreciation
The Pakistani rupee has been steadily losing value compared to the dollar, making imports more expensive.
2) Pakistani Rupee Depreciation
The Pakistani rupee has been steadily losing value compared to the dollar, making imports more expensive.
This results in increased costs for the same goods, which further diminishes the country's foreign reserves."
3) Flood
The floods that occurred in Pakistan in 2022 resulted in an estimated $30 billion in economic damages.
3) Flood
The floods that occurred in Pakistan in 2022 resulted in an estimated $30 billion in economic damages.
