Former Finance Minister Ishaq Dar said last week that if his party is given another chance in the upcoming General Elections, Pakistan’s economy will be back on track within 3-4 years.
But for someone who has held the office of finance supremo for a record 4 times, most by any politician in Pakistan’s bleak 76-year history, the past 11 months offer ominous forecasts if Dar gets his wish.
PKR and PSX
Dar took office as finance minister on September 28, 2022. From his first day in office to his last day (August 11), the Pakistani Rupee (PKR) fell by Rs. 56.37 to 288.49, a 19.5 percent drop. To date, the interbank PKR rate is 305.6 versus the US dollar, a drop of 24 percent from 232.12 recorded on September 28 last year.
It is pertinent to highlight that Pakistan’s Real Effective Exchange Rate (REER) stood at to 90.9 in September 2022 while it came in at 91.59 in July 2023.
Despite equity markets reacting jubilantly to Dar’s appointment as finance czar, it didn’t stop the Pakistan Stock Exchange from recording its worst period in 6 years for investors. According to Topline Securities, engineering (-45 percent), automobile (-41 percent), pharmaceuticals (-33 percent), refinery (-32 percent), and cement (-31 percent) were among the worst-performing sectors on PSX by end-December 2022.
Startups
Dar’s stint on the top seat was a nightmare for entrepreneurs and startups with a pro-IMF mini-budget and heavy taxes driving away foreign direct investment. Investment in Pakistan’s tech ecosystem exhibited a downward trend in October-December 2022, declining to just $15.15 million, according to data released by Data Darbar at the time.
This was the worst quarter for startup funding in Pakistan compared to 2020 when investment stood at $5.025 million in January-March (Q1). Later in January-March 2023, startup funding declined by 86.6 percent compared to the previous year.
Electricity and Petroleum
Since 2022, the power tariff has jumped by Rs. 15.41, while the tax on commercial and domestic consumers is 78 percent and over 50 percent. Overall, the past year and a half alone has seen up to an 80 percent increase in power tariffs.
Electricity bills for up to 200 units have now increased from Rs. 18.95 last year to Rs. 30.86, for 300 units from Rs. 22.14 last year to Rs. 35.04, and for 400 units from 25.53 to Rs. 39.94 per unit.
Since Dar took office in September, rates of petroleum products have seen a big jump with petrol rising by 35.8 percent from Rs. 224.8 per liter on September 30, 2022, to Rs. 305.36 on August 31, 2023. Meanwhile, high-speed diesel has jumped by 32.5 percent from Rs. 235.3 last year to Rs. 311.84 per liter as per end-August rates.
Default
Most of ex-finance chief Ishaq Dar’s tenure wasn’t spent on quelling the extremely contagious default gossip which saw Pakistan’s domestic markets and dollar-denominated foreign maturities take significant beatings between October 2022 and March 2023.
Welcoming Dar, Moody’s Investors Service on October 6, 2022, downgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to Caa1 and later lowered the country further into junk category to Caa3 on 28 February 2023.
Meanwhile, Fitch Ratings downgraded Pakistan’s default rating to CCC- on February 14, 2023.
Accomplishments?
IMF
After months of delay and uncertainty, the former finance chief was able to persuade the International Monetary Fund to sign a staff-level agreement (SLA) with Pakistan on a $3 billion “stand-by arrangement” in June 2023. Initially, equity and currency markets welcomed this development and surged upwards till mid-July, before reversing trends the following month.
PSX witnessed a decline of 3,032 points /-6.31 percent during August 2023 to close at 45,002 points, marking the highest decline since COVID-19 (March 2020), according to a report by Arif Habib Limited.
Forex Reserves
A day after Dar was sworn in as Finance Minister, liquid foreign exchange reserves held by the central bank stood at $8.005 billion. On 10 August 2023, Dar left behind SBP reserves of $8.043 billion, staying true to his philosophy of leaving behind a small stash of dollars for the next government.
Considering the above, would you still want Ishaq Dar as the next Finance Minister of Pakistan?
No way, should have right person for right job….
What rubbishness you are talking he left small stash of dollars pathetic article how much loan was returned when he was FM. You have to return payments which you have taken as loan.
Actually this genius has shown effectiveness of finance minister in terms of value of Pakistani rupee, petrol and electricity prices with an intentional effort not to give any background.
Pakistan had a number of payments to foriegn lenders which Pakistan could easily fail and that was real default. Imran govt left nothing in exchequer, read tweet of state bank on 7th April, State bank had 10.8 billion dollars out of which 7 billion dollars were kept by friendly countries. Imran left 3.8 billion dollars whereas his ministers claimed 23 billion dollars a few times but later didn’t stress much knowing the facts. Repayments to these lenders put pressure on rupee, also smuggling to Afghanistan, purchase of dollars by Pakistanis (they love digging their own grave) for “investment” were factors that further had worsen the situation. Petrol was expensive even in rich countries when Imran’s govt was giving subsidy on it using dollars (petrol is purchased in dollars not rupees) which added to the worsening economic situations. Irony is his supporters without reading or knowledge ask this..
وہ کیسے دے رھا تھا
جواب: وہ ڈالر میں خرید کر سستے میں دے کر آپکو خوش کر رھا تھا لیکن قرض کے ڈالر جب واپس کرنے پڑے تو آج آپکو مزا آرھا ھے لیکن بیمار ھوئے جس کے سبب اسی عطار کے لڑکے سے دوا لیتے ہیں
Negative artile
next level beghairat
Biased and pro watch thief article.
He is way better than traitor Khan
Economy Killer
Why ProPkaistani team always posts about idiots…… Koi shrm hoti koi haya hota 🤣🤣🤣
He is pakistan killer not dollar killer.
You should go to school, read and look for facts. You seriously need an upgrade.
Please bring him back so he can finish the destruction of Pakistan….
“No measure taken to save Pk economy in the last year” caretaker Finance Minister….