Not all doom and gloom
Not all doom and gloom
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Good Evening!
The Acting Governor of the State Bank of Pakistan, Dr Murtaza Syed, appeared on a podcast on Thursday to reassure the country: we are not about to become a Sri Lanka. I don’t know which part of that statement I find more concerning—that we’re being compared to a debt-riddled country on the verge of bankruptcy, or that our top banker has become a podcaster.
While comparisons to Sri Lanka are unlikely to assuage people’s concerns, Dr Syed did lay out some progress that Pakistan has been able to make in the past few years, which is a welcome change from the doom and gloom surrounding the economy these days. From 2019 to 2022, Pakistan’s public debt to GDP ratio improved from 77% to 71%. In that time, its net foreign exchange reserves also jumped from -USD 1 billion to +USD 6 billion (in layman terms, net forex reserves = forex reserves - future spending obligations).
While this is undoubtedly positive news, the governor did note that things can quickly take a turn for the worse if countries pursue reckless policies like burning through forex reserves to artificially maintain their exchange rate. It’s just as well then that the new PML-N government has no track record of doing any such thing…oh wait.
On another note, the Macro Pakistani team is taking a well-deserved break for the next few weeks, so there will be a temporary pause in our newsletter and social media content. However, our website will continue to be updated with the latest economic data, so please do check that out until then.
WEEKLY DATA WATCH
KSE-100 fell this week, as concerns rose over inflation and a future interest rate hike. PKR appreciated slightly this week, as the government edged closer to a resumption of the IMF programme. Local gold prices fell this week.
The annual change in the Sensitive Price Index rose significantly to 20.04% vs. 16.97% last week. The poorest of the country (Q1) experienced a change of 16.67% vs. 21.68% for Q5. On a weekly basis, prices rose for all quintiles by 2.00%.
Increase in prices of Petrol (+19.9%), Ghee (+4.59%) and Potatoes (+9.08%) contributed to weekly inflation. A fall in the price of Chicken (-4.68%) and Wheat (-1.91%) helped moderate inflation this week.
What Else We’re Reading (Local)
With Airlift and Swvl both laying off employees in recent weeks, has Pakistan’s start-up bubble burst? (Profit)
Pakistan’s trade deficit in the first 11 months of this fiscal year hit an all-time high of USD 43 billion. (Dawn)
What Else We’re Reading (International)
The UK government has made plans to send asylum seekers to Rwanda, with the first flight scheduled for 14 June. (Guardian)
South Korea’s economy is in some trouble, with inflation hitting a 14-year high, while industrial output and investment have declined. (FT)
About Us Macro Pakistani is a data driven research platform that aims to provide a basic understanding of Pakistan’s economy. If you have an interest in contemporary news but are currently overburdened with sensationalism and specialized vocabulary, we are the platform for you.
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