Category: Economy

Pakistan should announce tax holiday for new investments in medical devices, food processing, agri-tech, textiles, electronics, chemicals, plastics, renewable, leather, footwear, engineering, furniture, ceramics & automobile etc. The message should be loud and clear: invest more, create jobs and re-industrialize. This is 3rd budget of PTI, transformation has to start now or now. Covid-19 has… Continue reading Budget should be job-creating, tax rationalizing, export boosting & import substituting!

State Bank of Pakistan released the much-awaited remittances data today. Inbound remittances for Pakistan plummeted by 6% M/M and rose by 1.1% Y/Y in Apr’20. In absolute terms, remittances for April’20 stood at $1790mn. For the 10MFY20, remittances stand at $18.8bn, an increase of 6% Y/Y. In terms of regional composition, remittances from USA registered… Continue reading Remittances plummet by 6% M/M during Apr’20 amid oil crises & economic slowdown

Rates have already been cut 425 bps in two months. Covid-19 shock necessitated relief to the economy. The businesses had to be kept afloat & liquidity needed to be pumped to ensure that businesses don’t die nor are wiped out. Aggregate demand needs to be pulled & jobs protected to avoid cascading domino effect. Host… Continue reading SBP Monetary Policy Committee 15th May : Expect another 50-75bps cut

$27bn worth of Fiscal adjustment is a lot, painful but necessary. The sharpest of all is tripling VAT from 5% to 15%. This would be inflationary but adjusts the economic balance sheet away from Oil revenues. This is a medium term thumbs up! The government didn’t wait for next year for this. Similarly, the monthly… Continue reading Saudi Arabia diversifies away from Oil Economy: Bold, timely & progressive move!

~100,000 people stranded in Middle East are coming home. A chunk of those are being laid off or have had serious pay cuts. The plunge in oil prices have compelled the rich Arab countries to cut development & their want of smart cities is rendering expats jobless. With very young population, Arab countries are belatedly… Continue reading Pakistan’s life-line being risked – Pardesis are coming!

On March 17th 2020, when Pakisan had less than 500 cases Prime Minister Imran Khan appealed for debt relief. Either, Pakistan could see foresee collapse the economy or it was legitimate diplomatic play. Since then, the testing per day has gradually increased & expected to peak end May & June. Meanwhile, Pakistan has secured $1.4bn… Continue reading Pakistan lobbies hard for debt-relief!

Pakistan’s hard holding cash accounts for 30% of the M2(currency in circulation+bank deposits) as of Apr’20. That is amongst the highest compared to other developing countries. People in Pakistan prefer to hold cash instead of keeping deposits in banks. One can infer multiple reasons for such high rate. From the top of the head, generally… Continue reading Cash over bank deposits-Informal economy or knowledge deficit?

“Past performance is not a guarantee of future performance”. This is the disclaimer investment managers give in their recommendations. If there is any one who worries most about this is IMF. Corona virus has scrambled the textbook economics. The tax revenues are crumbling, central banks are firing shots & trade has collapsed. Increased sovereign debt… Continue reading Pakistan’s ScoreCard is out – Corona upended the past!

Trade deficit for the month of April worsened by 42% M/M. Exports declined by 47% M/M and imports declined by 7% M/M in April’20. On yearly basis, exports registered a decline of 54% from $2,089mn in Apr’19 to $957mn in Apr’20. Imports shrinked by 34% Y/Y from $4,714mn in Apr’19 to $3,088mn in Apr’20. Worsening… Continue reading Trade deficit worsens amid Corona lockdowns