LOANS OCCUPIED BY

PREVIOUS GOVERNMENTS
Final project of Macroeconomics

Group Members:

 Hamza Raja
 M. Hamza Zahid
 Fahad bin Sajid
 Arslan Lanra
INTRODUCTION

 Pakistan’s leaders have damaged the country’s

economy
 To get rid of poverty & to accelerate economic
growth every Government took loan from IMF
 Pakistan took loan from IMF since decades
PURPOSE OF GOVERNMENTS FOR
LOAN

 The purpose of taking loan from IMF is

that Governments want to stabilize its
1. deteriorating economy
2. Exchange Rates
3. Balance of payments
 It is very attractive offer only for short
term period perspective
LOAN: A CURSE OR A
BLESSING
 IMF sign contracts with our governments
that is based on macroeconomic policies
 If this loan would be used for the stability of
economic conditions and for the reduction
of barriers to increase economic growth
then it is blessing
 On the other hand, as the value of rupee is
falling day by day the this is a curse for the
economy of country.
 DARKEST ERA 1987-1999 OF
PAKISTANI GOVERNMENTS

 First Loan Taken(1958) and recorded as

deficit Budget
 Lack of implementation
 Undrawn Amount
 Back to back nine Agreements
IN THE ERA OF 2000-2007
 Musharraf rule prove to be a growing period
of economy where every sector of economy
is growing
 Policies by Musharraf economic policies
keep the economy to grow for a short time
period
 Best Economy Condition
 Fulfillment of policies
IN THE ERA OF 2010 & ONWARD

 Implementation of new policies

 New grants
 Deficit of record time
 Easy Pay back procedure
CONDITIONS OF IMF
 Devaluation of Pakistani Rupee

 Removal of subsidies

 Change in the Islamic development bank

loans

 Imposition of CED on services

RELATION OF PAKISTAN
WITH IMF
 When we see into the long run impact of IMF
loan, then there is a negative and
insignificant relationship between Pakistan’s
government borrowing and GDP

 It will have positive impact of our exchange

rate
 At a Glance Country Data

RELATION OF PAKISTAN WITH IMF

GDP GRAPH
LOAN GRAPH OF PAKISTAN ECONOMY
POSITIVE EFFECT OF LOAN
FOR GOVERNMENTS
 Ease the problem of BOP by stabilizing the foreign
exchange reserves
 Proven helpful for enhancing government
revenue by increasing the new tax culture
 Improvement in credit rating by reducing the
country’s default risk
 Enhancement of foreign exchange rate
NEGATIVE EFFECT OF
LOAN FOR GOVERNMENTS
 Increase in central excise duty on services
and agriculture sectors
 Reduction in expenditure on the public
sector development program
 Devaluation of Rupee
 Increase in mark up & inter bank transaction
rates
 Decline in GDP growth rate
 Decline in the economic indicator right after
infusion
PAKISTAN ECONOMY INDICATOR OF MONEY
PAKISTAN ECONOMY INDICATOR OF
GOVERNMENT
 CONCLUSION

The people of Pakistan today blame the current government of PTI

for not being able to deliver. The lack of understanding in the
citizens provokes them to blame the current government for the
mess without paying attention to those who were truly responsible
for this chaotic situation.
RECOMMENDATIONS

 The huge amounts that have been taken out

of the country in the form of money
laundering/corruption need to be
reacquired.

 Need to acquire loans that are interest free.

 Efficient tax collection
 limit its imports and export
QUESTION?
THANK YOU