Asia

In the intricate fabric of Pakistan’s economic landscape, a daunting debt crisis casts a long shadow, threatening the nation’s quest for stability and prosperity. Recent revelations from key economic institutions, notably the State Bank of Pakistan, lay bare a disconcerting reality: Pakistan’s external debt has surged to a staggering $125.7 billion, placing immense strain on its fiscal health. Central to Pakistan’s economic challenges lies its complex relationship with China and the China-Pakistan Economic Corridor (CPEC). Launched in 2013, CPEC stands as a monumental endeavor aimed at fortifying infrastructure and fostering economic growth. With over $60 billion invested primarily by China, it emerges as one of Pakistan’s largest infrastructure projects. However, the financing stru...

As the US delegation looked to the annual springtime gathering of finance chiefs in Washington this week, they hoped to use the confab to put pressure on China to steer clear of dumping exports on world markets. Treasury Secretary Janet Yellen and colleagues were also ready to claim credit for the US having come to the world economy’s aid with growth policies that have lifted the whole global outlook. Things didn’t go quite as Washington hoped. Indeed, US officials found themselves at the bottom of a gang tackle. A dramatic shift in rhetoric from Federal Reserve Chair Jerome Powell on Tuesday effectively rewrote the script for the International Monetary Fund-World Bank spring meetings. As IMF Managing Director Kristalina Georgieva put it Thursday, “All eyes are on the...

Pakistan needs two to three years to implement some of the structural changes the International Monetary Fund has prescribed to break the South Asian country’s chain of financial struggles and bailouts, according to its new finance minister. The country has long known what is needed in order to steady its economy, and the challenge has been follow-through and implementation, Muhammad Aurangzeb said at the Atlantic Council on Monday. Aurangzeb is visiting the US to attend the IMF and World Bank spring meetings this week, his first trip to Washington since taking office last month. “Once we get into the execution, we will need a two- to three-year time period so we can actually go through the structural reforms,” said Aurangzeb, who previously worked at JPMorgan Chase & Co. “If we...

Sri Lanka on Tuesday rejected international bondholders' proposal to restructure more than $12 billion in debt, putting at risk critical International Monetary Fund support and delaying its efforts to resolve a two-year-long debt crisis. Some of the proposal's "baseline" assessments and a lack of a contingency option in the case of continued economic weakness were the two main reasons the deal was not agreed, the government said in a statement. Colombo said it hoped to hold further talks "as soon as feasible" but the immediate risk was that without a compromise in the coming weeks, the next tranche of all-important IMF support money could potentially get delayed. Sri Lanka has already struck a deal with its main government creditors, but an "agreement in principle" with bondholde...

A recent study reveals that India is eroding China's dominance in electronics exports in some key markets as manufacturers diversify their supply chains away from the world's factory to other parts of Asia. The impact is majorly noticeable in the US and UK, which witnessed rising geopolitical tensions with China in recent years. According to London-based Fathom Financial Consulting, India's electronics exports to the US as a ratio of China's rose from 2.51 percent in November 2021 to 7.65 percent in November 2023, while it increased from 4.79 percent to 10 percent in the UK. With generous incentives including tax breaks, rebates, simplified land acquisition procedures, and financial support, the Indian government is trying to attract electronics manufacturers to the country....

Pakistan is set to repay a foreign debt worth $ 1 billion against a 10-year Eurobond maturing in the middle of this month which will reduce the stock of the debt acquired through the selling of bonds in international markets to below $ 7 billion. The State Bank of Pakistan (SBP) told The Express Tribune that it was ready to repay the bond anytime and was waiting to receive instructions to do so from the finance ministry. The move will reduce the stock of the debt acquired through selling Eurobonds and Sukuks (bond-like instruments used in Islamic finance) in international markets to below $ 7 billion. This has enhanced the country's capacity to repay all the upcoming maturing foreign debt on time. Following the repayment of $ 1 billion in April, Pakistan's foreign exchange res...

Bangladesh's economy made a strong turnaround from the COVID-19 pandemic, but the post-pandemic recovery continues to be disrupted by high inflation, a persistent balance of payments deficit, financial sector vulnerabilities, and global economic uncertainty, says the World Bank in its twice-yearly-update. Released today, the latest Bangladesh Development Update says that urgent monetary reform and a single exchange rate regime will be critical to improve foreign exchange reserves and ease inflation. Greater exchange rate flexibility would help restore balance between demand and supply in the foreign exchange market. Structural reforms will be key to diversify the economy and build resilience over the medium and long term, including measures to raise government revenues to support inves...