Pakistan 2021 Year End Review: Highs, Lows and Issues

The Covid19 pandemic that started in late 2019 continued to ravage the world in 2021. Europe, India and the United States were among the most impacted by it. Pakistan was able to control it better than its large eastern neighbor but it, too, was hit by double digit global inflation. Pakistan's economic recovery began in earnest with higher GDP growth, record exports and remittances from the Pakistani diaspora. It was a banner year for Pakistan's technology startups with over $300 million of venture investments, about 15 times higher than the year 2020. The war in Afghanistan ended with the US troops withdrawal and the fall of Kabul to the Taliban. Many risks and uncertainties remain as Pakistan and the world enter Year 2022. Let us hope and pray that the new year brings peace and prosperity for all. 

Happy New Year 2022

Here is a summary of some of the key highlights, lowlights and issues for Pakistan's year 2021: 


1. Banner year for tech startups in Pakistan

2. Exports, remittances and Roshan Digital Accounts hit new records 

3. Demographic dividend and record remittances 

4. Pakistan's online workforce 3rd largest in the world 

5. India variant, later named Delta variant, sparked a new wave of covid that Pakistan controlled.  Over 150 million vaccine doses administered. 

6. Pakistan presented its plans and goals to manage global climate change at COP26 conference in Glasgow, Scotland.  

7. Sehat card launched in Punjab after KP, a major step toward universal healthcare

8. Economic recovery led by construction (cement, infrastructure, housing) manufacturing (cars, motorcycles, tractors) and agriculture (bumper crops) 

9. Over 20 million mobile phones assembled in Pakistan  Number of mobile broadband subscriptions reached 110 million. 

10. Textile boom, record corporate profits, new companies registrations 

11. Pakistani farmers' incomes saw substantial double digit increases with bumper harvests and higher prices of major crops like cotton, rice, sugarcane and wheat. Higher incomes boosted demand for consumer goods, fertilizer, motorcycles, tractors and other agriculture machinery.  

12. Pakistan is on track to become the world’s 7th largest consumer market 

13. War in Afghanistan ended with US withdrawal and the fall of Kabul to the Taliban 

14. OIC Conference on Afghanistan in Islamabad

15. Pakistan National Security Policy document launched


1. Inflation up, Deficits up, Gas shortages 

2. Going into 3rd year of pandemic with Omicron surging 

3. PTI popularity down 

Uncertainties and Risks: 

1. Humanitarian crisis in Afghanistan 

2. Impact of Omicron

3. Soaring current account deficits 

Related Links:


Anonymous said…
Look at the list of public sector companies that have been privatized so far...

The dates clearly indicate that there were THREE WAVES of privatization.

(1) Early 1990s under Nawaz I
(2) Late 1990s under Nawaz II
(3) Early 2000s under Mushy

That's it. Apart from Nawaz (I & II, but not III) and Mushy, no one has done anything to further the restructuring of loss-making public sector enterprises.

Why do you think this is?

Riaz Haq said…
From Shafaat Husain:

During Jul-Dec FY22, exports of goods increased by 25% to $15.13 billion. The exports grew by 17% in Dec-21 to $2.76 billion as against $2.37bn last year.
That's an increase of $4.1 billion compared to H1FY18 and $3 billion compared to H1FY21.


From Razzak Dawood

Early indications are that the growth in imports has started to decrease. 🇵🇰 imports during Dec 2021 decreased 🔽 to USD 6.9 billion as compared to USD 7.9 billion in Nov 2021. This is a decrease of USD 1 billion. The import projection for Dec 2021 was USD 6.2 billion. 1/4
Riaz Haq said…
Dr. Ikramul Haq
Going forward, we expect the growth to stay at 5%, exports $31bn, remittances $32bn, taxes Rupee 6,000bn, trade deficit to reduce in 2HFY22
Recent pressures on Current account are due to commodity shock but risks are receding due to timely policy actions.


ISLAMABAD: The Finance Division said it is expecting the growth to stay at five percent, exports $31 billion as well as remittances $32 billion and tax collection of Rs6 trillion besides reduction in trade deficit to reduce in second half of fiscal year 2022.

While issuing performance report of year 2021 on Friday, the Finance Division said that “Year 2021 - Resilient now ever!”

Sustainability: Pakistan boom-bust lifecycle appears cyclical than sustainable in past. This is reflected from past global commodity, political or economic shocks of 1998, 2009, & 2018, where economy got busted in very short interval of time

Unlike past, PTI government has managed to bring the sustainability to macroeconomics. Despite the most devastating health and Economic Shocks of century, ie, Covid-19 and recent multi decade high-price commodity shock, Pakistan economy has displayed the greatest resilience, which is unprecedented in the 74-year history of Pakistan.

Pakistan’s macroeconomic performance was widely accepted by all international macro-economic Financial Institutions (Including IMF, World Bank, ADB, Moody’s, S&P and Fitch etc.)

The government’s response to the pandemic has been widely acclaimed and recognised. According to The Economist, Pakistan has been ranked number 1 in the ‘Economists’ world normalcy index as the country has lifted most of its Covid-19 restrictions imposed to curb the virus spread.
Riaz Haq said…
Asian #LNG prices fall on muted #Asian demand. The average LNG price for February delivery into Northeast Asia fell to $33.80 per mmBtu, down $14.5, or around 30 percent from the previous week. #energy #inflation #Pakistan #economy #deficits #imports

Doha: Oil prices fell on Friday but were set to post their biggest annual gains since at least 2016, spurred by the global economic recovery from the COVID-19 pandemic slump and producer restraint, even as infections reached record highs worldwide.

After rising for several straight days, oil prices stalled on Friday as COVID-19 cases soared to new pandemic highs across the globe, from Australia to the United States, stoked by the highly transmissible Omicron coronavirus variant. Brent crude futures settled down $1.75, or 2.2 percent, at $77.78 a barrel. US West Texas Intermediate crude futures dropped $1.78, or 2.31 percent, to $75.21 a barrel. Brent ended the year up 50.5 percent, its biggest gain since 2016, while WTI posted a 55.5 percent gain, the strongest performance for the benchmark contract since 2009, when prices soared more than 70 percent.

Global oil prices are expected to rise further next year as gasoline and diesel demand catches up. Meanwhile, with oil hovering near $80, the Organization of the Petroleum Exporting Countries and its allied producers, together called OPEC+, will probably stick to their plan to add 400,000 barrels per day of supply in February when they meet on January 4.

Asian LNG prices fell last week on muted Asian demand and a drop in European gas prices in thin holiday trading, though a bullish outlook remained on concerns over tight European supply.

The average LNG price for February delivery into Northeast Asia fell to 33.80 per mmBtu, down $14.5, or around 30 percent from the previous week. Demand in Asia stalled as buyers resisted high spot market prices that recently reached around $45 per mmBtu and favoured alternative fuels, but demand could recover in January.

European gas prices declined from all-time highs despite concerns over Russian supply with the Yamal pipeline that brings Russian gas to Germany remained in reverse direction, sending fuel back to Poland for a 10th day on Thursday. However, the arrival of several LNG gas tankers sent prices down and helped offset low exports from Russia. Concerns over low storage capacity in Europe, currently at 55 percent and the prolonged process of approval for Nord Stream 2 remain a bullish factor that should support prices.

The US gas futures on Friday closed out their biggest yearly gain in five powered mostly by strong demand for US LNG exports helped by an initial surge in global prices.
Riaz Haq said…

Arif Habib Limited
Total (oil) industry sales (in Pakistan) surged by 19% YoY to 20.8mn tons during CY21.
Riaz Haq said…
Pakistan exports beat half-year target

Talking to The Express Tribune, Arif Habib Limited analyst Sana Tawfik said that imports increased 63% year-on-year during July-December 2021 while exports grew 25%.

According to a statement issued by the Ministry of Commerce, exports amounted to $15.125 billion for July-December 2021 against the target of $15 billion.

The statement was issued following a consultative meeting chaired by Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood to discuss the trade trend in December 2021.

The meeting discussed that trade deficit was likely to come down if parliament passed the mini-budget as it would discourage imports following imposition of higher taxes on luxury items.

“Import growth is likely to be reduced along with import value with the resumption of International Monetary Fund (IMF) programme,” the statement added.

“Reduction in trade deficit in the coming months is imminent due to a stringent ongoing review and the checks put in place by financial support providers.”

Talking to The Express Tribune, Arif Habib Limited analyst Sana Tawfik said that imports increased 63% year-on-year during July-December 2021 while exports grew 25%.

The trade deficit almost doubled during the six months under review compared to the same period of last year.

“Imports are expected to slow down on the back of a forecast decline in international commodity prices,” she said. “Keeping in view the measures taken by the government to incentivise export-oriented sectors, we are optimistic that outward shipments will improve further in the coming months.”

She voiced hope that the country would achieve the export target for full fiscal year 2021-22.

Centre for Peace and Development Initiatives (CPDI) CEO Mukhtar Ahmad Ali stated that exports were increasing at a slow pace partly due to a significant increase in commodity prices in global markets.

Exports had remained suppressed until 2018 because of severe energy shortages and the impact of terrorism on the industry, he recalled.

“Following normalisation of energy supply and improvement in law and order situation, exports were expected to jump significantly but it seems that political uncertainty and soaring energy prices have affected investor confidence,” said Ali. “The ongoing gas supply constraints are likely to dent exports.”

He added that additional efforts were needed to increase the range, quantity and value of exportable goods and services.

Arif Habib Commodities CEO Ahsan Mehanti said that the trade deficit had doubled on a year-on-year basis in July-December 2021, therefore Pakistan’s trade performance was unsatisfactory.

However, the export target was met for the half year and the annual target was also likely to be reached due to the expected low impact of Omicron variant of coronavirus on global growth and Pakistan’s exports, he said.

Riaz Haq said…

Arif Habib Limited
Atlas Honda Limited (ATLH) posted highest ever bikes sales of 1,352,711 units in CY21.


Arif Habib Limited
Auto Sales Data

Dec’21: 27,331 units +96% YoY; +46% MoM
1HFY22: 136,000 units, +70% YoY
CY21: 237,443 units, +91% YoY

Arif Habib Limited
Auto sales increased by 91% YoY to 237.4K units during CY21, 3rd highest on CY basis.


Arif Habib Limited
Private sector credit witnessed massive growth in CY21 which surged by PKR 1.4trn; highest in last 10 yrs. The jump in credit offtake reflecting improvement in business confidence and investment momentum.


Arif Habib Limited
Highest ever monthly sales of Suzuki Alto during Dec’21 (9,195 units, +280% MoM | +211% YoY) amid favorable Govt policies.


AL Habib Capital Markets (Pvt) Ltd
Urea Sales up by 5% YoY to 6.34mn tons during 2021
#Pakistan #Urea

Riaz Haq said…
Pakistan to seek peace, economic connectivity under new security policy

"Pakistan is poised to take advantage of its geo-economically pivotal location to operate as a production, trade and investment, and connectivity hub for our wider region to strengthen our economic security," the policy document stated.

It also sought peace and better relations with rival India but warned that policies being pursued by its eastern neighbour could lead to conflict.

"The political exploitation of a policy of belligerence towards Pakistan by India's leadership has led to the threat of military adventurism and non-contact warfare to our immediate east," it said.


Pakistan on Friday launched its first-ever comprehensive National Security Policy that it said was centred on regional peace and economic connectivity, and stressed that it wanted improved relations with arch-rival neighbouring India.

The National Security Policy, seven years in the making, is meant to act as a comprehensive framework tying together policies in different sectors. Economic security is listed as the top priority.

"I am confident that effective implementation of this policy will contribute immensely to our country's economic security," Prime Minister Imran Khan said, speaking at an event to launch the public version of the policy in Islamabad.

Officials say the details of the policy, prepared by a department jointly headed by civil and military leaders, will remain confidential.

The policy revolves around seeking peace with neighbours and exploring opportunities to make Pakistan a trade and investment hub.


Pakistan and India, both of which have nuclear weapons, have fought three wars since 1947 and had a number of military skirmishes - most recently a limited engagement between their air forces in 2019.

Pakistan has long been considered by analysts as a security state, where military policy has always trumped other considerations.

Aside from three wars with India, Pakistan has been entangled in two wars in neighbouring Afghanistan, and also dealt with violent Islamist militancy and separatist movements.

"It is like summarizing a wish list of concerns for Pakistan and ambitions, but with no reference to dearth of resources or how will consensus be developed," author and defence analyst Ayesha Siddiqa told Reuters.

Riaz Haq said…
Arif Habib Limited
Trade deficit increased by 107% to USD 25.5bn during 1HFY22

Textile Exports: $ 9.4bn, +26% YoY
Petroleum Imports: $ 10.2bn, +113% YoY
Transport Imports: $ 2.3bn, +105% YoY
Agriculture and others: $ 7.9bn, +96% YoY

Riaz Haq said…
Arif Habib Limited
Power Generation up by 10.6% YoY in CY21

Dec’21: 8,828 GWh, +12.0% YoY
CY21: 136,572 GWh, +10.6% YoY

Full Report

Riaz Haq said…
Muzzammil Aslam
World commodities shaking economies from East to West. Bloomberg Commodity Index surged 32% YoY and 6% since January 1st, 2022. Definitely not good news for net importing countries like Pakistan. Especially energy prices.
Riaz Haq said…
Muzzammil Aslam
World commodities shaking economies from East to West. Bloomberg Commodity Index surged 32% YoY and 6% since January 1st, 2022. Definitely not good news for net importing countries like Pakistan. Especially energy prices.
Riaz Haq said…
The improved farm incomes — 59pc for wheat farmers and 47pc for sugarcane growers — last year on the back of better yields and higher market prices are encouraging farmers to use higher quantities of fertilisers to get better output. The domestic urea prices remain at the 2012 level, meaning its share in input costs has drastically reduced over the years. At the same time, the area under wheat cultivation has reached a record 24.3 million hectares depicting a significant growth of approximately two million hectares in the last couple of years. This equates to over four million acres improvement in the area under cultivation. Another factor that has boosted the urea demand is the whopping increase in the prices of DAP fertiliser, which have trebled to over Rs9,000 a bag, forcing many to replace it urea to save money.
Riaz Haq said…
Riaz Haq
only sees #Pakistan’s glass half empty. He refuses to even acknowledge the country’s progress on growing #export & change in #energy mix to lower imports.He ignores transitory high #energy prices causing current account deficits.
Omer Zeshan Khan
Export growth is low end and for limited time (a bonus). Previous Govt did a few things for localisation (car/mobile/edible oil). Haven’t seen these guys doing anything. They are just sitting and talking. Pakistan’s economy is robust enough to feed people while Govt waits.
Omer Zeshan Khan

Riaz Haq
#ImranKhan’s #NayaPakistan housing program is a good idea, especially the incentives for small & medium mortgages for the lower middle class. It’s boosting #employment in #Construction & #manufacturing sectors as well as the housing stock
Omer Zeshan Khan
Can you name one project under Naya Pakistan Housing?
Riaz Haq
Replying to

#Housing #Mortgage financing in #Pakistan jumped 85% last year, according to the State Bank. “Financing under MPMG picked up momentum in 2021 as approvals for financing by banks grew from near zero to Rs117 billion in 2021”

KARACHI: Credit to the housing and construction sector increased by record Rs163 billion or 85 percent in 2021, mainly driven by the central bank’s rules to encourage mortgages and incentives and penalties for lenders with respect to achieving or failing housing finance targets.

Banks disbursed Rs355 billion housing loans in 2021, compared with Rs192 billion in the previous year, the State Bank of Pakistan said in a statement on Thursday.

Disbursement of low-cost housing loans under the Government Markup Subsidy scheme, also known as Mera Pakistan Mera Ghar (MPMG), reached Rs38 billion last year. In December, banks extended Rs9.3 billion loans to the borrowers; highest monthly disbursement since January 2021.

Analysts said tighter monetary conditions usually affect mortgages as the SBP has jacked up interest rates by 275 basis points in three moves since September. Currently, the policy rate hovers at 9.75 percent.

However, the government’s mark-up subsidy scheme looks to remain protected from an upward move in interest rates as the government is providing subsidy to the mortgage clients for the first 10 years.

Habib Bank, Meezan Bank and Bank Al Habib were the top three contributors, said the SBP.

Banks also made significant progress in the provision of financing under MPMG scheme, introduced in 2020, it added.

“Financing under MPMG picked up momentum in 2021 as approvals for financing by banks grew from near zero to Rs117 billion in 2021. The banks have received requests of financing of Rs276 billion from potential customers, which indicates that approvals and disbursements will keep growing in coming months.”

Bank Alfalah emerged as the leading bank with highest disbursement of Rs3.3 billion followed by nine banks with disbursements of over Rs2 billion each. These include Meezan Bank, Bank Islami, National Bank, Standard Chartered Bank, HBFCL, United Bank, MCB Bank, Bank of Punjab and Habib Bank, said the statement.

Financing for housing and construction and particularly under MPMG witnessed impressive growth on the back of many enabling regulatory environments introduced after extensive consultation with stakeholders, the SBP noted.

Further, the SBP said it advised the banks to increase their housing and construction finance portfolios to at least 5 percent of their domestic private sector advances till December 2021, introducing a set of incentives and penalties to ensure compliance.
Riaz Haq said…
According to the World Bank’s Pakistan Development Update, released today, while economic activity maintained its momentum during July-December 2021, high demand pressures and rising global commodity prices led to double-digit inflation and a sharp rise in the import bill during this period. These developments have had an adverse impact on the rupee. Moreover, long-standing structural weaknesses of the economy including low investment, low exports, and low productivity growth pose risks to a sustained recovery.,policy%20challenges%20faced%20by%20countries.

The report highlights that with economic recovery and improved labor market conditions, poverty—measured at the lower middle-income class poverty line of $3.20 Purchasing Power Parity 2011 per day—declined from 37 percent in FY20 to 34 percent in FY21. However, rising food and energy prices are expected to decrease the real purchasing power of households, disproportionally affecting poor and vulnerable households that spend a larger share of their budget on these items.

“Pakistan’s economic recovery after the COVID-19 crisis indicates that the country has enormous potential to overcome challenging economic situations,” said Najy Benhassine, World Bank Country Director for Pakistan. “However, sustaining the economic recovery requires addressing long-standing structural weaknesses of the economy and boosting private sector investment, exports and productivity.”

On the back of high base affects and recent monetary tightening, real GDP growth is expected to moderate to 4.3 and 4.0 percent in FY22 and FY23, respectively. Thereafter, economic growth is projected to slightly recover to 4.2 percent in FY24, provided that structural reforms to support fiscal sustainability and macroeconomic stability are implemented rapidly, and that global inflationary pressures dissipate.

However, the macroeconomic risks remain very high. These include tighter global financing conditions, potential further increases in world energy prices, and the possible risk of a return of stringent COVID-19-related mobility restrictions. Domestically, political uncertainty and policy reform slippages can also lead to protracted macroeconomic imbalances.

“To mitigate immediate macroeconomic risks, the Government should focus on containing the fiscal deficit at a level which ensures debt sustainability, closely coordinate fiscal and monetary policy, and retain exchange rate flexibility,” said Zehra Aslam, the lead author of the report.

The special section of the report focuses on financial intermediation and how to increase financing to the real economy by addressing structural impediments impacting the demand and supply of finance, including in credit markets. These impediments include extensive government borrowing from the financial sector that crowds out supply of credit to the private sector and deepens the sovereign-bank nexus. Intermediation is further limited by low domestic savings, and underdeveloped capital markets. Overall financial inclusion remains low, but good progress has been made to enhance it through ongoing digital innovations. Resolving these constraints in the medium to long term requires concerted efforts by the government, regulators, and other stakeholders.

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