The International Monetary Fund (IMF) is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
Created in 1945, the IMF is governed by and accountable to the 189 countries that make up its near-global membership.
is to ensure the stability of the international monetary system. It does so in three ways: keeping track of the global economy and the economies of member countries; lending to countries with balance of payments difficulties; and giving practical help to members.
The IMF oversees the international monetary system and monitors the economic and financial policies of its 189 member countries. As part of this process, which takes place both at the global level and in individual countries, the IMF highlights possible risks to stability and advises on needed policy adjustments.
The IMF provides loans to member countries experiencing actual or potential balance of payments problems to help them rebuild their international reserves, stabilize their currencies, continue paying for imports, and restore conditions for strong economic growth, while correcting underlying problems.
The IMF works with governments around the world to modernize their economic policies and institutions, and train their people. This helps countries strengthen their economy, improve growth and create jobs.
Pakistan became a member of the IMF in 1950 and the first time the Government of Pakistan opted for a loan from the IMF was in 1958. This was a Standby Agreement (SBA) amounting to USD 25 Million.

However, due to political disturbance, this loan was cancelled soon after. Pakistan received its second and third SBAs in 1965 and 1968, during Field Marshal Ayub Khan’s era. As observed by Barro and Lee
(2002) Pakistan was among the five developing countries which had the highest number of professional staff at the IMF in 1999. Birdsall and Diwan (2003) show that countries with higher debt, especially those indebted to international organizations, have indeed received larger net transfers than other countries.
Based on the data on external debt and resource flows to Pakistan, it appears that Pakistan's debt stock has grown very rapidly in the last three decades. As the IMF is often depicted as a heartless moneylender which forces poor countries to adopt bad policies and take its `pound of flesh` back while the countries sink further into poverty. Mainly, in case of Pakistan when we want to measure and check the effect of policies and conditions of financial institutions as well as Govt. borrowing decisions, not direct policies of Pakistan can measure the growth and other external indicators of IMF`s policies on taxation system exchange rate, borrowing decisions, GDP growth, imports and exports quota`s, tariffs
IMF purchases are also affected.
Basically the economy’s growth is measured by its GDP. So in this research paper GDP has been taken to check the Economy of Pakistan. Here the research is going to analyse. The Role of IMF in the Pakistan’s economy but as being a developing country Pakistan does not any control on IMF’s policies and data on
IMF is not available, so its limitation for this research that’s why it’s proxy has been used as Government borrowing. The purpose of this research is to check and elaborate the relation of IMF charges with
Government borrowing and the variables related to it.
IMF LOAN HISTORY OF PAKISTAN
DATE/YEAR
16-MAR-1965
17-Oct-1968
11 -Agu-1973
11-Nov-1974
9-Mar-1977
GOVERNMENT
AYUB KHAN (Dictator)
AYUB KHAN (Dictator)
PAKISTAN PEOPLES PARTY
PAKISTAN PEOPLES PARTY
PAKISTAN PEOPLES PARTY
AMOUNT OF LOAN
37.5 Million
75 Million
75 Million
75 Million
80 million
24-Nov-1980
2-Dec-1981
28-Dec-1988
ZIA-UL-HAQ (Dictator)
ZIA-UL-HAQ (Dictator)
PAKISTAN PEOPLES PARTY
1.2 Billion as extended fund facility
919 million
273.1 million as stand by loan
22-Feb-1994
13-Nov-1995
20-Oct-1997
29-nov-2000
6dec-2001
24-Nov-2008
4-Dec-2013
PAKISTAN PEOPLES PARTY
PAKISTAN PEOPLES PARTY
NAWAZ SHARIF
PARVIZ MUSHARAF
PARVIZ MUSHARAF
PAKISTAN PEOPLES PARTY
NAWAZ SHARIF
562.5 million as extented fund facility & extended credit
562.5 million
1.13 billion
465 million
1 billion
7.2 billion
4.3 billion as extend fund

2014-2015
2016-2017
NAWAZ SHARIF 24.9 billion
NAWAZ SHARIF
TOTAL LOAN
10.1 billion
53.3778 BILLION
Summary of IMF members’ quota, reserve tranche position, SDR holdings, outstanding credit, recent lending arrangements, projected payments due to the
IMF, and historical transactions with the IMF.
I. Membership Status: Joined: July 11, 1950;
II. General Resources Account:
Quota
IMF's Holdings of Currency (Holdings Rate)
Reserve Tranche Position
III. SDR Department:
Net cumulative allocation
Holdings
SDR Million
2,031.00
6,303.88
0.12
SDR Million
988.56
321.42
Article VIII
%Quota
100.00
310.38
0.01
%Allocation
100.00
32.51
IV. Outstanding Purchases and Loans:
Extended Arrangements
SDR Million
4,273.00
%Quota
210.39
V. Latest Financial Arrangements:
Date of
Type Arrangement
EFF
Stand-By
Sep 04, 2013
Nov 24, 2008
ECF 1/
1/ Formerly PRGF.
Dec 06, 2001
Expiration
Date
Sep 30, 2016
Sep 30, 2011
Dec 05, 2004
Amount Approved Amount Drawn
(SDR Million)
4,393.00
7,235.90
1,033.70
(SDR Million)
4,393.00
4,936.04
861.42
VI. Overdue Obligations and Projected Payments to Fund 2/
(SDR Million; based on existing use of resources and present holdings of SDRs):
Forthcoming
Principal
Charges/Interest
Total
2018
30.00
25.59
55.59
2019
420.00
95.62
515.62
2020
660.00
80.22
740.22
2021
762.17
66.09
828.26
2022
702.17
51.49
753.66
2/ When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.
VII. Implementation of HIPC Initiative: Not Applicable
VIII. Implementation of Multilateral Debt Relief Initiative (MDRI): Not Applicable
IX. Implementation of Catastrophe Containment and Relief (CCR): Not Applicable
As of February 4, 2015, the Post-Catastrophe Debt Relief Trust has been transformed to the Catastrophe
Containment and Relief (CCR) Trust.
Prepared by Finance Department

The sources said that the IMF could place strict conditionalities, forcing Pakistan to seek additional loans for meeting those restrictions and this could expand the loan facility to $12bn.
Pakistan began exploring the possibility of yet another loan package with the IMF while the PML-N was still in power and the exploratory talks continued under the interim government as well.
The final decision, however, was announced on Monday night when Finance Minister Asad Umar confirmed that the government was going to the IMF to bail Pakistan out of its foreign currency crisis.
The announcement followed the highest single-day loss in a decade in the stock market, which plunged by over 1,300 points, losing almost Rs270bn of its capitalisation.
On Tuesday, the IMF said that it would listen to Pakistan’s request for financial support “very, very attentively”, as it did with any member with good standing.
Pakistan has received more than a dozen financial support packages from the IMF in the past. It completed the last three-year package of $6.4bn in August 2016, which was 216 per cent of Pakistan’s quota at the IMF.
The previous programme also aimed at “bringing down inflation and reducing the fiscal deficit to more sustainable levels”. It included measures to “help achieve higher and more inclusive growth, in particular through addressing bottlenecks in the energy sector”.
At a news briefing on Tuesday, IMF chief economist Maurice Obstfeld outlined the economic challenges that Pakistan was facing now and also commented on its ability to finance itself.
Asked how would the IMF react to Pakistan’s request for an emergency bailout package, he said: “As with any member in good standing, they are certainly entitled to request financial support from the Fund. So, we will be listening very, very attentively when and if they come to us.”
He noted that Pakistan has “frequently… had programmes in the past several times… and that is a very good sign going forward”.
Current deficit of Pakistan
The current account deficit, which remains the single largest challenge for economic managers, shot to a record high of $17.994 billion (5.7% of GDP) at the end of fiscal year ended June 30, 2018 mainly due to exorbitant imports and less-than-projected inflows.
This is 44.7% higher than $12.44 billion recorded in the previous fiscal year 2017.
State Bank of Pakistan (SBP) Governor Tariq Bajwa said last week that the deficit has grown to an
“unsustainable level” due to soaring aggregate demand in the economy.
Foreign exchange: SBP’s reserves fall to alarming level after 4.4% decline

To tame demand, the central bank has let the rupee fall by close to 28% to Rs134 to the US dollar since
December 2017, and made borrowing expensive by increasing the benchmark interest rate by 175 basis points to 7.5% in the last six months.
“The Real Effective Exchange Rate (rupee-dollar parity) and monetary policy (the benchmark interest rate) are two effective tools available with the central bank to deal with the situation,
Loan impact on foreign exchange
Today US Dollar Rate to Pakistan Rupee (1 USD to PKR) is 133.82 PKR, . This US Dollar to
Pakistan Rupee conversion is based on open market rates which are set by the currency exchange dealers of Pakistan. Easily find the 1 USD buying rate and selling rate in Pakistan. You can also convert all major currencies .this is due to loan (IIMF)
LAST MONTH USD RATE
Recent changes for the last periods:
Period 2 Days 3 Days 1 Week 2 Weeks 1 Month
Chng,% +0.19% +7.12% +7.12% +7.12% +7.13%
Ex-Rate 132.75 124.16 124.16 124.16 124.15
140
120
100
80
60
40
20
0
2 Days 3 Days 1 Week 2 Weeks 1 Month
Ex-Rate
Chng,%
Ряд1
OCT-2018 Open Close Mid

12
11
8
5
10
9
4
3
2
1
180
175
170
165
160
155
150
1 GBP =
1 GBP =
1 GBP =
1 GBP =
1 GBP =
1 GBP =
1 GBP =
1 GBP =
1 GBP =
1 GBP =
174.06
173.88
161.59
160.72
160.53
161.07
160.84
160.39
160.1
160.54
174.32
172.89
162.29
161.49
160.51
160.93
159.23
159.46
160.11
160.6
173.15
174.275
161.94
160.985
160.52
160.86
160.035
159.925
159.455
160.285
Ряд1
Ряд2
1 GBP
=
1 GBP
=
1 GBP
=
1 GBP
=
1 GBP
=
1 GBP
=
1 GBP
=
1 GBP
=
1 GBP
=
1 GBP
=
12 11 10 9 8 5 4 3 2 1
oct-2018
7
6
9
8
13
12
11
10
5
4
1 EUR =
1 EUR =
1 EUR =
1 EUR =
1 EUR =
1 EUR =
1 EUR =
1 EUR =
1 EUR =
1 EUR =
PKR
154.24328 PKR
154.24328
151.979
153.69845
141.49342
141.30422
141.53134
141.68969
142.52017
142.59228

3
2
1
1 EUR =
1 EUR =
1 EUR =
141.79229
142.50149
142.69588
160
155
150
145
140
135
130
1
EUR
=
1
EUR
=
1
EUR
=
1
EUR
=
1
EUR
=
1
EUR
=
1
EUR
=
1
EUR
=
1
EUR
=
1
EUR
=
1
EUR
=
1
EUR
=
12 11 10 9 8 7 6 5 4 3 2 1
Ряд1
USD RATE FROM 2006 TO CURRENT-2018ANYSIS
FY
1 USD=
Y.END
160
140
120
100
80
60
40
20
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Current
60.214 60.406 68.281 81.39 85.463 85.989 94.627 99.114 98.809 101.79 104.76 104.89 133.46
30-
Jun
30-
Jun
30-
Jun
30-
Jun
30-
Jun
30-
Jun
30-
Jun
30-
Jun
30-
Jun 05-jun 30-jun 30-JUN Oct-18
Ряд1
Pakistan maintains foreign reserves with State Bank of Pakistan. The currency of the reserves was solely
US dollar incurring speculated losses after the dollar prices fell during 2005, forcing the then Governor

SBP Ishrat Hussain to step down. In the same year the SBP issued an official statement proclaiming diversification of reserves in currencies including Euro and Yen, withholding ratio of diversification.
Following the international credit crisis and spikes in crude oil prices, Pakistan's economy could not withstand the pressure and on October 11, 2008, State Bank of Pakistan reported that the country's foreign exchange reserves had gone down by $571.9 million to $7749.7 million.
[115] The foreign exchange reserves had declined more by $10 billion to a level of $6.59 billion. in June 2013 Pakistan was on the brink of default on its financial commitments. Country's Forex reserves were at an historic low covering only two weeks' worth of imports. Today in November 2017 Pakistan's Foreign exchange reserves are at a comfortable level (20 billion dollars), sufficient to cover about 3 months of imports.
IMPACT OF IMF PLAN ON PAKISTAN 2008 & 2013
2013
The maximum number of loans – amounting to $10.1 billion, the highest taken out in any single year during the country’s 70-year history – was obtained during the last year of Nawaz’s government.
Starting from July 2013, with every passing year, the quantum of external debt kept growing due to the government’s inability to implement policies that could have ensured sufficient non-debt creating inflows.
The Supreme Court of Pakistan on Friday disqualified Nawaz on concealment of assets charges.
Former finance minister Ishaq Dar would also have to face a reference in the accountability court over charges of a 91-time increase in his assets, which did not match his known sources of incomes.
On October 19, 2016, the director general debt at the finance ministry had informed the Senate
Standing Committee on Finance that from July 2013 to June 2016, the PML-N government took
$25 billion worth of fresh loans. He had said that net addition to external debt during the threeyear period was $13 billion.
In 2013-14, the net increase in the external debt was roughly $3 billion. Similarly, in 2014-15, the net increase in debt was $4.42 billion, higher by 53% over the increase reported in the preceding year. There was a net addition of $5.6 billion in the country’s external debt during the fiscal year
2015-16, showing a growth of 28.2% over the increase in foreign debt in 2014-15, according to the ministry.

During the fiscal year 2016-17, the last government had borrowed $10.1 billion and out of which it returned about $5 billion loans.
The latest IMF report on Pakistan shows the country’s external debt at $79.2 billion by June 2017.
It was $60.9 billion when the PML-N took the control of the government, according to the report.
That means the government added $18.3 billion to the external debt.
In June 2013, the gross official reserves held by the State Bank of Pakistan stood at $6 billion, which increased to $16 billion by June 2017. The entire increase of $10 billion in the official foreign currency reserves was the result of borrowings, as during this period exports kept on declining.
The remaining $8 billion external debt was taken to meet the balance of payments requirements.
Pakistan debt servicing cost balloons to Rs15 trillion
According to sources in the finance ministry, maintaining official foreign currency reserves at this level is critical to giving a perception of an economic turnaround; and the former finance minister was also very sensitive about the issues of official foreign currency reserves and rupee-dollar parity.
Dar had always presented the position of the official foreign currency reserves as an example of strong economy. He would often ignore the structural weaknesses of the economy like declining levels of savings and investments in terms of Gross Domestic Product.
The IMF’s Article-IV report shows that Pakistan’s gross external debt in terms of exports was
193.2% in 2013; and this ratio deteriorated to 294.4% as of June 2017. During this period,
Pakistan’s gross external financing requirements also almost doubled to $17.2 billion from $9.1 billion.

While responding to deteriorating external sector situation, the finance ministry had said last week that “external borrowing is a routine and normal function of developing countries and
Pakistan is no exception.”
It had added that developing economies resort to borrowing to meet investment requirements, accelerate growth and create jobs. External borrowing is also necessitated to retire past debt, finance essential imports, build external buffers, and shore up external reserves to maintain external account sustainability in a global context.
we can aynasis that when Pakistan received loan from IMF the foreign exchange rate of usd increased in
24nov-2008 when Pakistan received loan from the IMF and usd rate increase 68 to 81PKR (PPP) govt means the Pakistan curacy deprecated and the USD curracy application means the current govt was deficit in foreign exchange 2013 to 2017 usd price increase only 5PKR even the govt received loan from IMF .
Pakistan has increased its interest rates by 1 percentage points, from 7.5% to an annual rate of
8.5%.
The key rates a tool used by Central Banks to implement monetary policy.
An increase in interest rates is used to slow down inflation and protect the currency..
This change is the first to have taken place since on July16th 2018, when the Central Bank increasedinterest rates by 1 percentage points to 7.5%.
Here we show you the progression of interest rates in Pakistan. You can see interest rates in other countries in interest rates and see all the economic information about Pakistan in Pakistan economy .
Pakistan - Key rates
Date Key rates
10/01/2018
07/16/2018
8.50%
7.50%
05/28/2018
01/29/2018
6.50%
6.00%

Date
05/23/2016
09/14/2015
05/25/2015
03/24/2015
01/26/2015
11/17/2014
11/18/2013
Key rates
Total liquid foreign reserves held by the country, including net foreign reserves held by banks other than the SBP, stood at $13.990 billion, up by 26.9% from $11.019 billion recorded at the end of
2012-13.
Foreign exchange reserves held by the State Bank of Pakistan (SBP) rose by
more than 50% in 2013-14, data released by the central bank on Thursday showed.
Although foreign exchange reserves held by the SBP recorded a week-on-week nominal decrease of 1.7% on June 27, their year-on-year increase was clocked at 50.3%, with the reserves reaching
$9.033 billion on the second-last day of fiscal year 2013-14.
Foreign exchange reserves held by the central bank amounted to $6.008 billion at the end of FY
2012-13, SBP data shows
5.75%
6.00%
6.50%
8.00%
8.50%
9.50%
10.00%

Total liquid foreign reserves held by the country, including net foreign reserves held by banks other than the SBP, stood at $13.990 billion, up by 26.9% from $11.019 billion recorded at the end of 2012-13.
However, the country saw its foreign exchange reserves dwindle quickly in the first half of the last fiscal year. They hit rock bottom at the end of January when they amounted to just $3.180.3 billion, thus signifying the import cover of less than one month.
Subsequently, a series of actions from the finance ministry, including arm-twisting of exporters to make them bring back their export proceeds to the country without waiting for the stipulated limit of 120 days, strengthened the level of SBP-held foreign exchange reserves.
According to data compiled by Elixir Securities, the performance of the country’s external account
– which consists of a basket of economic measures relating to international transactions – remained strong during the first 11 months of 2013-14. It posted a surplus of $5.7 billion, which is up 1.6 times on a year-on-year basis.
“Major improvement was evident in financial and capital accounts, as both turned positive, while the current account deficit increased by a mere 3% year-on-year,” research analyst Ujala Adnan wrote in a recent note issued to clients.
Capital account balance increased to $1.7 billion in July-May, up 580% from $255 million recorded in the comparable 11-month period of 2012-13. Similarly, financial account balance clocked up at $4.5 billion in the first 11 months of 2013-14 as opposed to a negative $75 million recorded in the same months of the preceding fiscal year.
While the sale proceeds of the Eurobond issue kept the financial account positive, heavy capital inflows from bilateral and multilateral sources spurred the capital account surplus in the outgoing fiscal year, she said.
Pakistan received foreign direct investment (FDI) of $1.36 billion in the first 11 months of 2013-
14, which is 2.5% higher than the FDI received during the comparable period of the preceding

fiscal year. However, the increase in foreign portfolio investment (FPI) over the same period was disproportionately highly mainly because of the Eurobond issue.
Pakistan attracted $2.3 billion in FPI during the July-May period, which is about 22 times higher than the FPI of $102.3 million received in the comparable 11 months of the preceding fiscal year.
“The external account strengthening seems sustainable under the umbrella of International
Monetary Fund’s standby arrangement programme worth $6.7 billion, privatisation programme,
3G spectrum auction, loans from the World Bank, Asian Development Bank (ADB) and other bilateral and multilateral sources,” Adnan noted, adding that the planned issue of $500 million worth of Islamic bonds in the international market will improve foreign exchange reserves further.
As opposed to net external inflows of $4.6 billion in 2013-14, the government has projected net external inflows of $5.4 billion in the current fiscal year. The government’s projection of loans appears to be ‘achievable,’ according to KASB Securities, based on the successful Eurobond issue in the last fiscal year that is currently trading at a significant premium.
“Despite ambitious projections on the external front, we believe the realisation of project/programme loans as well as successful Eurobond and Sukuk bonds can boost foreign exchange reserves,” it said, noting that total liquid foreign exchange reserves are expected to increase to $17 billion by the end of the current fiscal year.
The country''s foreign exchange reserves have been declining consistently and State Bank of
Pakistan''s (SBP) statistics show that country''s foreign reserves have further plunged by some
$296.4 million during the last week. Country''s foreign exchange reserves have declined from the level of over $15.074 billion to $14.7779 billion during the week ended on February 2, 2008.
The level of $14.77 billion is the lowest level of current fiscal as it was stood at 15.6137 billion dollar on the beginning of current fiscal year, 2007-08. During the last week foreign exchange reserves held by SBP have declined by $285.8 million to 12.5293 billion dollar during a week.
Moreover, reserves held by banks also show a decline of $106 million to $2.2486 million during the week ended on February 2, 2008.

The major decline in the foreign exchange reserves has witnessed after the imposition of state of emergency in the country, which shows an average decline of some $0.53 billion monthly during the last three months. During the last 12 weeks, overall foreign exchange reserves have shrunk by some 10 percent or $1.59 billion to $14.7779 billion from $16.3725 billion.
A major decline has been witnessed in the SBP-held reserves, which dipped by 11.5 percent or
$1.636 billion to $12.5293 billion after the imposition of emergency rule in the country. On
November 3, 2008, the reserves were stood at $14.1661 billion.
While, the reserves held by the banks have up by $422 million to $2.2486 million during the week ended on February 2, 2008 as compared to $2.2064 billion in first week of November.
Economists are terming the declining exchange reserves as another setback for the economy, apprehending that the reserve would further dip if new privatisation transaction are not done in the near future. The post-emergency outflows from the SCRA account and high payments on account of oil import bills are the main reasons behind this decline, they added.
Pakistan looks increasingly unstable as it grapples with persistent economic imbalances. The trade deficit further widened over the same month last year in
August, although stronger remittance inflows should partly offset it. At its first meeting, the newly formed Economic Advisory Council discussed measures such as an import ban on cheese and other consumer goods to curb the current account deficit, which ballooned in FY 2018 due to robust imports stemming from higher oil prices and projects linked to the China-Pakistan Economic Corridor. Foreign exchange reserves have been falling as a result and many analysts expect Pakistan may soon turn to the IMF for a bailout. It could, however, first seek assistance from
China or Saudi Arabia to avoid IMF requirements.
Growth is expected to slow in FY 2019 as the country’s twin deficits continue to weigh on the outlook. Panelists expect growth of 4.7% in FY 2019, unchanged from last month’s estimate, and 4.8% in FY 2020.

Population (million)
GDP per capita (USD)
2013 2014 2015 2016 2017
183 186 190 194 197
1,267 1,314 1,428 1,466 1,547
231 245 271 284 305 GDP (USD bn)
Economic Growth (GDP, annual variation in %) 3.7
4.1
4.1
4.6
5.4
Consumption (annual variation in %) 2.1
5.6
2.9
7.6
8.7
Investment (annual variation in %) 2.6
2.5
15.8
7.5
10.0
Industrial Production (annual variation in %)
Unemployment Rate
Fiscal Balance (% of GDP)
0.8
4.5
5.2
5.7
5.0
6.0
6.0
5.9
6.0
-
-8.2
-5.5
-5.3
-4.6
-5.8
Public Debt (% of GDP)
Money (annual variation in %)
62.6
62.7
61.8
65.5
65.0
16.9
12.6
12.8
14.5
13.9
Inflation Rate (CPI, annual variation in %, eop) 5.9
8.2
3.2
3.2
3.9
Inflation Rate (CPI, annual variation in %)
Exchange Rate (vs USD)
Policy Interest Rate (%)
Exchange Rate (vs USD, aop)
Current Account (% of GDP)
Current Account Balance (USD bn)
Trade Balance (USD billion)
Exports (USD billion)
Imports (USD billion)
7.4
8.6
4.6
2.9
4.2
99.6
98.68
101.9
104.7
104.9
9.00
10.00
6.50
5.75
5.75
96.82
102.9
101.4
104.3
104.8
-1.1
-1.3
-1.0
-1.7
-4.0
-2.5
-3.1
-2.8
-4.9
-12.1
-15.4
-16.6
-17.2
-18.4
-26.7
24.8
25.1
24.1
22.0
22.0
40.2
41.7
41.3
40.4
48.7

Exports (annual variation in %)
Imports (annual variation in %)
International Reserves (USD)
External Debt (% of GDP)
2013 2014 2015 2016 2017
0.3
1.1
-3.9
-8.8
0.1
-0.5
3.8
-0.9
-2.3
20.6
8.5
11.8
16.0
20.9
18.7
25.0
25.3
22.7
24.5
26.2
According to a Business Recorder exclusive, receivables of Pakistan State Oil (PSO), already high due to overdue payments from the power sector have risen by 23 billion rupees - an amount payable by
Sui Northern Gas Pipelines Ltd (SNGPL). The reason: failure to clear payments on re-gasified liquid natural gas (RLNG) with total purchases by SNGPL valued at 424.85 billion rupees with 401.75 billion rupees paid up by April this year. Around 10 billion rupees of the overdue amount, 43 percent, is owed by two independent power producers (IPPs) - Rousch Power and Fauji Kabirwala
Power Company - reflecting the amount of their receivables from their consumers. The rest of the receivables are due from government power producers, fertilizer manufacturers, compressed natural gas stations, industries and other consumers.
The debilitating energy sector's circular debt begins with PSO, the state-run company empowered to import not only oil and products but also RLNG, and its sustained failure to ensure bill clearance by its clients who, in turn, are unable to ensure payment of their dues from their end consumers.
This is the crux of the problem and it has recently surfaced in the gas sector and is subsequent to the then Abbasi-led Petroleum Ministry and Natural Resources signing a 15-year contract with
Qatargas in February 2016. Without going into the merits or demerits of the contract or those made since with other foreign companies to procure RLNG, the fact of the matter is that the circular debt reflects massive inefficiencies in the system which are paid for by the common man in ever-rising tariff rates. This is a serious problem and must be promptly dealt with because this could well be the start of the circular debt in the gas sector that continues to cripple the capacity of the power sector to deliver capacity output; and this in spite of the significant rise in generation capacity.
At present, the energy sector's circular debt is estimated at 1.1 trillion rupees, about 514 billion rupees receivables sourced to within the sector, referred to as the flow, while the rest is parked in the Power Holding Private Limited (PHPL), referred to as the stock of debt on which the general public pays a surcharge for enabling the government to pay interest on past loans and no attempt has yet been made to pay off the actual debt incurred.
The Power Division cites a number of reasons for the escalation in the circular debt notably: (i)
2016-17 witnessed quarterly tariff adjustments not determined by the regulator which added a whopping 70 billion rupees and which could have been collected from the end consumers

S h a r e t o L i n k e d I n S h a r e t o T w i t t e r S h a r e t o M o r e S h a r e t o E m a i l S h a r e t o C o p y L i n k
Pakistan's Foreign Direct Investment (FDI) increased by 291.5 USD mn in Jun 2018, compared with an increase of 237.9 USD mn in the previous month. Pakistan's Foreign
Direct Investment: USD mn net flows data is updated monthly, available from Jul 1997 to
Jun 2018. The data reached an all-time high of 1.3 USD bn in Jun 2008 and a record low of -
53.9 USD mn in Jun 2015. The difference between the Total and the summation of data per country is due to the zero value of some countries. Zero refers to the amount of less than
$50,000.
In the latest reports of Pakistan, Current Account recorded a deficit of 5.8 USD bn in Jun
2018. Pakistan's Direct Investment Abroad expanded by 3.0 USD mn in Jun 2018. Its
Foreign Portfolio Investment fell by 123.0 USD mn in Jun 2018. The country's Nominal GDP was reported at 312.6 USD bn in Jun 2018.
CEIC only displays a select group of indicators on our website.
Explore the complete set of 4 million+ time series b y registering for a free trial .
What was Pakistan's Foreign Direct Investment in Jun 2018?
WHAT IS AN INDEX
The primary objective of the Index is to have a benchmark by which the stock price performance can be compared to over a period of time. In particular, it is designed to provide investors with a sense of how the market is performing. Thus, it is similar to other indicators that track various sectors of the economic activity such a the gross national product, consumer price index, etc.

Some major international indices are NYSE, FTSE (London), NZSE 40, SENSEX 30
KSE 100 Index
.
It is capital weighted index and consists of 100 companies representing about 86% of market capitalization of the Exchange.
In November 1994 it was recomposed by the Baring Securities London and rules were framed for its recomposition.
Karachi Stock Exchange 100 Index (KSE-100 Index) is a stock index acting as a benchmark to compare prices on the Pakistan Stock Exchange (PSX) over a period. In determining representative companies to compute the index on, companies with the highest market capitalization are selected. However, to ensure full market representation, the company with the highest market capitalization from each sector is also included.
History
991-2006 (Steady growth)
The index was launched in November 1991 with a base of 2,000 points. By February 2007, it had skyrocketed to 12,285 points.
[1]
2007 (Record breaking growth)
KSE-100 index touched the highest ever benchmark of 14,814 points on December 26, 2007, a day before the assassination of former Prime Minister Benazir Bhutto, when the index nosedived.
[2]
2008 Global crisis
 April 20 : Karachi Stock Exchange achieved a major milestone when KSE-100 Index crossed the psychological level of 15,000 for the first time in its history and peaked 15,737.32 on 20 April 2008.
Moreover, the increase of 7.4 per cent in 2008 made it the best performer among major emerging markets.
[3][4]
 May 23: Record high inflation in the month of May, 2008 resulted in the unexpected increase in the interest rates by State Bank of Pakistan which eventually resulted in sharp fall in Karachi Stock
Exchange.
[5][6]
 July 17 :Angry investors attacked the Karachi Stock Exchange in protest at plunging Pakistani share prices.
[7][8]
 July 16 : KSE-100 Index dropped one-third from an all-time high hit in April, 2008 as rising pressure on shaky Pakistan's coalition government to tackle Talibanmilitants exacerbates concern about the country's economic woes.
[9]
 August 18: KSE 100 Index rose more than 4% after the announcement of the resignation of
President Pervez Musharraf but Credit Suisse Group said that Pakistan's Post-Musharraf rally in Stock
Exchange will be short-lived because of a rising fiscal deficit and runaway inflation.
[10][11]
 August 28 :Karachi Stock Exchange set a floor for stock prices to halt a plunge that has wiped out $36.9 billion of market value since April.
[12]
 December 15: Trading resumes after the removal of floor on stock prices that was set on August 28 to halt sharp falls.
[13]

2009-2010 (Quick recovery)
The index recovered quickly in 2009 and 2010 reaching new highs.
2011-2012 (Best emerging market)
As at 7 November 2012 index recorded highest level of 16,218 points and now KSE is being considered as a best emerging market in Asia with returns in financial year 2011-2012 up to 40%-50%.
2013-2014( post-elections)
Karachi's KSE-100 Stock Market Index was up 49.4% (37% in US$ terms) in 2013, beating all but four stock indices in the world. It handily beat Morgan Stanley's MSCI emerging market index which remained essentially flat. By comparison, India's main stock index rose just 8.89% in the same period. The remaining three BRIC countries--Brazil, Russia and China-- all saw their key stock indices decline in 2013. As of April the
30th KSE-100 Index recorded a new increase in its value standing at 28,913 points, that is more than 45.2% since the last fiscal year of 2012-2013.
[14]
Returns of 12 out of the 21 equity-based conventional mutualfunds operating in Pakistan remained higher than the benchmark stock index in 2014.
The remaining nine equity funds underperformed the Karachi Stock Exchange (KSE) 100-Share Index until
December 30, according to statistics compiled by the Mutual Funds Association of Pakistan (Mufap).
The KSE-100 index is typically the benchmark for almost all conventional equity funds operating in the cou.
The index stood at 31,954 points at the end of the second-last trading session of 2014, up 26.49% from the beginning of the calendar year when the reading was 25,261.

Other equity funds that posted returns higher than the benchmark index (until December 30) were NAFA
Stock Fund (37.91%), Pakistan Stock Market Fund (35.6%), Lakson Equity Fund (32.77%), United Stock
Advantage Fund (32.08%), ABL Stock Fund (31.16%), PICIC Stock Fund (30.35%), Alfalah GHP Alpha Fund
(29.78%), IGI Stock Fund (28.55%) and First Capital Mutual Fund (27.21%).
Share prices of some stocks rose astoundingly during 2014, which helped the KSE-100 index cross the psychological barrier of 32,000 points recently. According to Hashmi, the best-performing stocks (until
December 26) were Indus Motor Company (up 159.1%), Murree Brewery Company (151.7%), Pak Suzuki
Motor Company (143.6%), Packages (138.8%), Archroma Pakistan (123.3%), Mari Petroleum Company
(115.5%), Pioneer Cement (111.3%) and The Searle Company (100.4%).
Conventional equity funds performing worse than the benchmark index were JS Growth Fund (22.21%),
Atlas Stock Market Fund (21.86%), Askari Equity Fund (21.67%), JS Value Fund (20.99%), Pakistan
Strategic Allocation Fund (20.29%), First Habib Stock Fund (16.53%), Crosby Dragon Fund (16.19%) and
HBL Stock Fund (15.39%).

2015-2016 (Reaching new heights)
From its all-time high at 36,229 points on Aug 6, 2015, the KSE-100 index had tumbled to 31,298 points by the end of trading session last Friday. It represented a steep drop of 4,931 points or 13.6pc in just the last six months.
If the entire market were to have sunk that much, it would be nothing short of a catastrophe. But the KSE index of 100 shares that most investors follow on the Pakistan Stock Exchange (PSX) is skewed towards the sectors that hold the highest weightage. According to the PSX website, the KSE-100 index was introduced in
November 1991 with base value of 1,000 points. The index comprises 100 companies out of all listed companies currently at 559.
“Those 100 are selected on the basis of sector representation and highest market capitalisation, which tracks over 85pc of the market capitalisation of the companies listed on the Exchange.” The two sectors that currently command the highest weightage in the index include commercial banks with 25pc weight and oil and gas exploration companies having 10pc weight. Together, they represent
35pc of the KSE-100 index. And incidentally both those sectors have come to grief.
By the month of June, KSE-100 was in positive conditions and it achieved 38,777 points on 17 June 2016.

2016-2017
The Pakistan Stock Exchange’s (PSX) KSE-100 – a benchmark for market performance – was Asia’s topperforming index in 2016, much to the delight of thousands of investors who thought the golden run would continue. After close to 45% return in dollar terms for the average investor in the previous year, fresh money poured in
In January 2017, the stock market hit the all-time high of 49,969 points. On 13 February, it stands at 49,876 points
Following Britain's decision to leave EU on 24 June, KSE went down by 1,100 points (3.1 percent) as stock markets went in turmoil with investors now investing in safe havens like gold and government bonds
2017 would prove to be a nightmare. Equity-based funds posted negative returns in the range of 10% to
20%, while brokerage houses had to be content with low volumes that put a dent on their earnings.
Overall, the KSE-100 Index posted an absolute negative return of 15.34% during the year. In dollar terms, it was a negative return of 20%. The year was the worst one for the PSX since the financial crisis enveloped global equity markets in 2008.

It also meant that the PSX’s performance was the worst in the world, in sharp contrast to global equity markets that outshone most asset classes.
On December 29, the last trading day of the year, the PSX benchmark KSE 100 Index ended at 40,471.48 points. This is a drop of 23.45% from its all-time high of 52,874.46 points it touched on May 24 this year.
The index even touched 37,919.42 points, a 20.68% fall since January and 28.28% from its all-time high in mid-December. However, a relief rally, sparked by buying in select oversold stocks, was enough to propel the index past 40,000.
In terms of numbers, the market capitalisation dropped to $73.5 billion, wiping off $21 billion from the stock market from the all-time high. The value of all shares ended at $77.55 billion as on December 29,
2017, a slight recovery.
“This was the worst year for Pakistan equities since 2008 when the market crashed 58% due to the price floor,” Topline Securities’ analyst FahadQasim said in a note on the market year-ender.
Reasons for the downfall
Many analysts and market followers said political instability, which hit its peak following the disqualification of Nawaz Sharif as prime minister, was the root cause behind the bearish run.
Tax
Every country is run by a Government. Why any Government is at all required?
1-The government collects taxes to pay for the goods and services it provides including schools, roads, law enforcement, libraries, parks and military protection.
2-Taxes are collected to support the government's services to its citizens

Period
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
Each one of us, one way or another, is involved in selling something, some people are selling goods and some sell their services. In return, we receive monetary benefit for selling these services and goods.
Similarly, Government collect taxes from its citizens to provide them services, goods and even to support those who are unemployed (but that is only if its a welfare state). Taxes are also collected to invest in projects of public benefit, to pay state debts etc.
Federal Board of Revenue ( FBR) is a top federal government body that investigates crimes related to taxation and money-laundering. The organization collects intelligence on tax evasion and audits cases. It administers tax laws for the Government of Pakistan and acts as the central revenue collection agency of Pakistan.
(Million Rupees)
Total
620,230
717,602
801,405
955,563
1,144,269
1,202,952
1,377,276
1,556,258
1,894,998
2,023,648
2,305,498
Total
Tax Collection
1,008,092
1,161,150
1,327,382
1,558,014
1,882,693
1,946,361
2,254,531
2,589,978
3,112,472
3,367,874
3,842,136
Direct Taxes
387,862
443,548
525,977
602,451
738,424
743,409
877,255
1,033,720
1,217,474
1,344,226
1,536,638
Indirect Taxes
Sales Excise Customs
377,430
451,744
516,348
633,357
804,899
842,528
996,382
1,087,790
1,302,371
1,328,965
1,491,297
92,137
117,455
124,784
137,353
122,464
120,964
138,084
162,248
188,055
197,911
205,877
150,663
148,403
160,273
184,853
216,906
239,460
242,810
306,220
404,572
496,772
608,324
Jul-16
Aug-16
Sep-16
Oct-16
50,671
69,080
113,941
88,636
73,060
90,713
97,725
102,993
FY17
6,110
9,455
15,492
15,414
28,557
37,755
34,562
34,200
107,727
137,923
147,779
152,607
158,398
207,003
261,720
241,243

Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
81,120
188,047
81,740
80,019
147,242
78,407
117,084
248,239
81,037
131,911
92,627
95,481
132,113
111,476
141,286
178,543
16,680
22,274
10,419
12,463
18,846
16,876
24,996
28,886
37,436
45,468
39,070
37,523
48,800
43,198
47,594
62,609
135,153
199,653
142,116
145,467
199,759
171,550
213,876
270,038
216,273
387,700
223,856
225,486
347,001
249,957
330,960
518,277
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Jan-18
Feb-18
Mar-18
Apr-18
May-18
Jun-18
68,250
83,528
131,080
93,327
98,873
188,476
95,706
89,631
152,524
95,011
125,791
314,441
90,107
97,308
127,000
116,301
107,684
148,110
116,087
111,620
139,510
132,892
152,308
152,370
FY 18
8,361
12,064
18,387
13,494
15,889
21,892
13,498
17,565
23,131
19,081
19,770
22,745
39,890
44,375
44,607
46,459
48,600
57,590
48,206
43,648
55,059
47,682
54,632
77,576
138,358
153,747
189,994
176,254
172,173
227,592
177,791
172,833
217,700
199,655
226,710
252,691
206,608
237,275
321,074
269,581
271,046
416,068
273,497
262,464
370,224
294,666
352,501
567,132
FBR has collected Rs. 3,842 billion during FY 2017-18 against Rs. 3,368 billion during FY
2016-17 denoting a growth of around 14.1%.
The growth attained during FY 2017-18 seems encouraging when compared with growth of 8.2% during FY 2016-17. An additional amount of around Rs.474.3 billion has been collected over the collection of previous year

Table 1: A Comparison of Collection 2017-18 vis-a-vis Target
During FY 2017-18 the overall growth in net tax collection has been 14.1% (Table 2). The collection of customs duty with 22.5% growth was on the top, followed by direct taxes with
14.3% and sales tax 12.2%. FED collection remained below the double digit growth
The direct taxes are the top source of FBR revenue with 40 percent share, sales tax is the second major source with 39% share. The share of customs duty is gradually increasing and has reached from 10.8% in FY 2013-14 to around 16% in FY 2017-18. The share of direct taxes needs to be increased further to make our taxes more progressive as well as equitable and to further reduce reliance on indirect taxes.

FBR Revenue and Tax-GDP Ratio during Last Five Years
The overall FBR revenue collection during last five years has increased from Rs.2,255 billion in FY 2013-14 to Rs.3,842.1 billion in FY 2017-18. Five year’s average growth has been 14.6 percent (Table 4). The five years average growth in customs duty has been around 21%, followed by direct taxes around 16%, FED (11.4%) and sales tax (12.3%).
The tax-GDP ratio of Pakistan is very low as compared to the world standards. Although some progress has been made during last five years but still more efforts are required to enhance

country’s tax-GDP ratio to a reasonable level. During FY 2013-14 FBR’s tax-GDP ratio was
9.0% which has reached to 11.2% in FY 2017-18. The year-wise net collection and tax-GDP ratio is depicted in Graph 4 and 5.
During FY 2017-18, sales tax remains second in top revenue generating sources of federal taxes receipts after direct taxes. It constitutes around 39% of the total net revenue collection.
Collection during FY 2017-18 has been around Rs. 1,491 billion against around Rs.1,329 billion in the PFY. Overall sales tax collection grew by 12.2% and around Rs. 162 billion of additional amount has been collected during FY 2017-18 as compared to the collection of previous year. The revenue target of sales tax has been met to the extent of around 96% of the assigned target of Rs. 1,547 billion for FY 2017-18.
Domestic sales tax collection grew by 8%, whereas collection of sales tax on imports increased by
16%. Details of collection of these two components are shown in Table

Within sales tax, the share of sales tax on imports is around 55% and that of domestic sales tax is around 45% during 2017-18 (Graph 6). This composition is changing and the share of STM is slowly rising as compared to sales tax domestic during last couple of years. The declining share of
STD is not a good omen for revenue mobilization efforts. Therefore, the concerned wing needs to review the causes and take necessary measures to enhance STD revenue
The government has missed virtually every main macro-economic target set in the budget 2008-09 for the outgoing fiscal. This includes the projected 5.5 per cent GDP growth, 12 per cent inflation,
Rs1,250 billion revenue and per capita income of 1,085 dollars, reveals the Economic Survey for
2008-09 released here by Adviser to Prime Minister on Finance Shaukat Tarin.
The survey states that Pakistan’s GDP growth has been estimated at 2 per cent for the current fiscal as against the original 5.5 per cent target, which was then revised to 3.5 per cent and further clipped to 2.5 per cent as agreed with the IMF. Likewise, the inflation target was fixed at 12 per cent by the government in the budget for the current fiscal, which in reality stood at 22.3 per cent in the

first 10 months of 2008-09. “Per capita income in dollar terms rose from the finalised figure of
$1,042 last year to $1,046 in 2008-09, showing a marginal increase of 0.3 per cent.” However, in last year’s Economic Survey the target of per capita income was $1,085, which has come down to
$1,042.
The revenue target was fixed in the budget at Rs1,250 billion and was irrationally revised upward by the government to Rs1,360 billion, then revised downwards to Rs1,300 billion and yet again reduced to Rs1,180 billion, which also seems impossible to achieve
A New Measure of Core Inflation
A new method of permanently excluding relatively volatile commodities from CPI basket in Pakistan has been developed by SBP. This is achieved by making use of trimming approach on past data on monthly CPI changes to isolate a Relatively
Stable Component of CPI (RSC-CPI) as a new measure of core inflation. This method ensures inclusion of both food and non-food commodities that show persistent price behavior in Pakistan (see technical notes for details).

Developments in core inflation measured by RSC- CPI for the month of April 2018