South Asia Investor Review

Pakistan is experiencing soaring demand for electricity across all of the sectors of its economy. The new demand is being met by rapidly growing deployment of distributed solar, estimated at 38 GW as of June, 2025. In 2025, 44% of solar deployment was residential, followed by industry (26%), agriculture (21%) and commercial users (9%). The expansion of distributed solar has enhanced electrification across the economy, lifting Pakistan's  electrification  rate to 21.7% in FY2025 from 17% in FY2023, close to the global average of 22%. This surge to over 200 terawatt-hours of electricity is not reflected in official data, according to a report by  Ember Energy  titled "The solarization of Pakistan's energy economy".  The  solar energy revolution  in Pakistan is led by consumers. Driven by soaring electricity costs, unreliable grid infrastructure, and cheap imported solar panels, millions of households and businesses have installed rooftop solar. This rapi...

In a television speech to the nation, Indian Prime Minister Narendra Modi urged his people to make sacrifices by spending less on fuel, fertilizer, and travel. He also asked them not to buy gold for a year. “To save foreign exchange, we must accept the challenge of patriotism,” he said. It appears that India's problems do not just stem from the effects of the US-Iran war; India's problems started well before that. Flight of foreign capital has put the Indian currency under tremendous pressure, with the Indian rupee falling nearly 10% in recent months. Many analysts believe that the Indian IT services exports could fall significantly as the artificial intelligence (AI) models begin to replace the IT workers. It could create a balance of payments crisis that could force India to seek the IMF bailout in the not too distant future.  Already, the Indian economy has slipped to the sixth-largest economy by nominal GDP , dropping from previous projections that had it at fourth. Indian ...

The India AI Impact Summit 2026, held at Bharat Mandapam in New Delhi, has been marred by chaos, confusion and deception. The events on the ground have produced unintended media headlines for India's Prime Minister Narendra Modi who wants to be seen as the " vishwaguru " (teacher of the world) in the field of artificial intelligence as well. First, there was massive chaos on the opening day, with long lines and sudden unannounced evacuation of exhibitors and attendees from the show floor for several hours. This, the Indian government said, was done for "VIP" security, a euphemism for Mr. Modi's "photo op" as he walked the venue halls alone for the benefit of the cameras for self-promotion. Mr. Modi then declared that "India is not just a part of the  AI revolution , but is leading and shaping it". To support such claims, an Indian University presented a "robodog" bought from China as its "innovation", a blatant lie tha...

Pakistan's KSE-100 index soared 86% in 2024, making it the second best among major indexes, according to  Bloomberg  News. The 2024 performance of KSE-100 represents its best year since 2002 when it shot up 112% . The top 3 performing stock markets in 2024 were Argentina (114%), Pakistan (88%) and Kenya (79%), according to Topline Securities. The US markets posted double digit gains with the AI-driven tech-heavy NASDAQ-100 up 27.6%. Small and medium US companies performed well with the Russell 2000 Index edging out India's Sensex with an 8.9% return.   Pakistan Among Top Performing Stock Markets in 2024. Source: Bloomberg Clearly, the $7 billion IMF program helped restore some investor confidence in Pakistan's economy in 2024. It was also boosted by remittances from  overseas Pakistanis  in  July-October 2024 which soared nearly 35% YoY to $11.8 billion as compared to $8.8 billion in July-Oct 2023. The fact that the KSE100 shares valuations relative to...

What good is a currency in global trade if it can not be used to buy products and services from other nations that a country needs?  The answer to this question came when Russia said it has accumulated billions of rupees in Indian banks which it can not use. “This is a problem”,  Russian Foreign Minister Sergei Lavrov told reporters in India’s Western state of Goa on the sidelines of the Shanghai Cooperation Organization meeting.  “We need to use this money. But for this, these rupees must be transferred in another currency, and this is being discussed now”.  Russia has decided it won't take any more Indian rupees. Moscow has rejected New Delhi's proposal for the Kremlin to invest rupees from oil and military equipment payments back into Indian capital markets so the currency doesn't pile up. Global Export Map 2023. Source: World Population Review Only the currencies issued by the governments of the world's largest exporters are useful for buying products and service...

India, a western ally, is openly buying Russian coal, oil and weapons worth tens of billions of dollars at deep discounts. These actions amount to busting western sanctions and financing President Vladimir Putin's war on Ukraine. Many smaller developing countries, including Bangladesh and Pakistan, are abiding by these sanctions and suffering from the consequences in terms of high prices of fuel and food. Why these double standards? Do these policy contractions serve the broader US interests in the Asia region?  India's Russian Imports Soaring Since the Start of Ukraine War. Source: Reuters India's Russian coal imports are up 6-fold from May 27 to June 15, 2022, according to  Reuters . Delhi's Russian oil buying has jumped 31-fold in this period.  Bulk shipments of Russian thermal coal to India began in the third week of May, 2022.  India is defying western sanctions to buy millions of barrels of discounted Russian crude oil, hiding their origin and exporting refined...

Nuclear power plants in Pakistan generated 15,540 GWH of electricity in 2021, a jump of 66% over 2020. Overall, Pakistan's power plants produced 136,572 GWH of power, an increase of 10.6% over 2020, indicating  robust economic recovery  amid the COVID19 pandemic.  Pakistan Electric Power Generation. Source: Arif Habib Hydroelectric dams contributed 37,689 GWH of electricity or 27.6% of the total power generated, making hydropower the biggest contributor to power generated in the country. It is followed by coal (20%), LNG (19%) and nuclear (11.4%).  Cost Per Unit of Electricity in Pakistan. Source: Arif Habib Nuclear offers the lowest cost of fuel for electricity (one rupee per KWH) while furnace oil is the most expensive (Rs. 22.2 per KWH).  Pakistan Electric Power Generation Fuel MiX. Source: Arif Habib Construction of 1,100 MW nuclear power reactor  K2 unit in Karachi  was completed by China National Nuclear Corporation in 2019, according to  me...

Pakistani-American economist Atif Mian has recently analyzed Pakistan's economy in a series of  tweets . He has said "Pakistan's economy is not in a good place", adding that the nation's "per capita income has not risen in 3 years (in fact down slightly)". He has particularly mentioned the country's "exaggerated external demand driven by its rentier economy", "flawed energy policy" and "a broken economic decision system" among the main causes for poor economic performance.  Is Atif Mian's diagnosis correct? Is the official reported data Atif Mian using accurate? What is the current PTI government doing or not doing to correct the problems identified by Mr. Mian? Let's try and assess the situation.  Economist Atif Mian's Tweet on Pakistan Economy Per Capita Income: Pakistan's officially reported GDP and per capita incomes are  grossly understated . These are based on the last economic census that was done ...

Oil consumption in Pakistan jumped 19% to 20.8 million tons in 2021, a strong indication of the country's economic recovery from the COVID-impacted 2020. In addition to oil, Pakistanis also consumed nearly 4 billion cubic foot of natural gas every day. Energy is fundamental to the functioning of any economy.  Pakistan Oil Consumption. Source: Arif Habib Pakistan's furnace oil consumption has been declining for several years as power producers continued to switch fuel to liquified natural gas (LNG) in recent years. However, the sudden jump in LNG prices forced them to use more furnace oil in  year 2021  than in 2020. There was also a big jump in diesel (HSD) and petrol (MS) with a rise in number of vehicles on the nation's roads.  Pakistan LNG Imports 2017-2021 in million tons    Pakistan Natural Gas Consumption in Billion Cubic Feet Per Day “Year 2021 proved to be remarkable for the automobile sector as there was a volumetric sales growth of 90% on a year-o...

Soaring LNG prices are adversely affecting Pakistan's balance of payments and threatening the nation's  post-COVID  economic recovery.  Pakistan's trade deficit has widened to nearly $12 billion in July-September 2021 quarter, up more than 100% from the same period last year. The nation's heavy reliance on expensive imported energy has been the main cause of prior balance of payments crises that have forced it to seek  IMF bailouts  more than a dozen times in the last 70 years.  Global LNG Prices. Source: The Peninsula Qatar   Pakistan: World's Fastest Growing LNG Market. Source: Bloomberg Global Commodity Price Increases The average LNG price for November delivery into Northeast Asia was estimated at about $32 per metric million British thermal units (mmBtu), up nearly 20 percent from the previous week, according to  the Peninsula Qatar publication . Price agency S&P Global Platts said on Thursday that its Japan-Korea-Marker, which is widely ...