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 
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Comment by Riaz Haq on January 2, 2022 at 1:47pm

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.

Comment by Riaz Haq on January 3, 2022 at 10:19am

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.

Comment by Riaz Haq on January 3, 2022 at 8:23pm

Arif Habib Limited
During CY21, industry recorded highest ever MoGas sales of 8.6mn tons. Moreover, total industry sales surged by 19% YoY to 20.8mn tons during CY21.

Comment by Riaz Haq on January 4, 2022 at 10:26am

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.

Comment by Riaz Haq on January 6, 2022 at 11:51am

#Pakistan plans to export #smartphones in 2022. Pak produced 22.12 million handsets during January-November 2021 and imported 9.95 million. The country's #Mobile Device #Manufacturing Policy 2020 set a 49% localization target by June 2023. #economy

Adviser to the Prime Minister on Commerce and Investment Abdul Razak Dawood on Wednesday said that after achieving “big success” in the manufacturing of mobile phones last year, Pakistan was now seeking expansion into exports.

Pakistan, a net importer of mobile phones prior to 2016, produced 22.12 million handsets during January-November 2021 and imported 9.95 million during the same period, data from the Pakistan Telecommunication Authority (PTA) shows.

In 2020, Pakistan’s import of mobile phones was 24.51 million compared to 13.05 million sets produced locally.

Various Chinese mobile phone manufacturers have played a key role in Pakistan’s production boom in 2021, according to the PTA.

Local manufacturing plants assembled 9.03 million smartphones while the number of 2G mobile phones was 13.09 million.

“I would say that our whole venture into manufacturing mobile phones has been a big success,” Dawood said in an interview with Arab News on Wednesday.

“It has been very successful because we now see that every month the number of mobile phones coming into the country is decreasing and the numbers that are being produced and sold locally is increasing.”

The PM’s aide said the record levels of local manufacturing were achieved under a new “conducive policy” introduced by the current government.

The Mobile Device Manufacturing Policy 2020 set a 49 per cent localization target by June 2023, including 10 per cent localization of parts of the motherboard and 10 per cent localization of batteries.

“We have developed a policy for local assembling of mobile phones … We are currently looking at becoming a world-class assembler of mobile phones,” Dawood said.

“We are right now concentrating on low-end mobile phone sets and we hope that soon we will be able to start getting into high-end phones with world-class companies.”

Comment by Riaz Haq on January 10, 2022 at 8:21am

Fatima Gobi Ventures
2021 has been full of growth for Pakistan’s vibrant #startup ecosystem. We are proud to have continuously backed #PakistaniEntrepreneurs as the most active #VentureCapital investor.

Congratulations to our portfolio for a remarkable finish to 2021 and a momentous start to 2022Rocket


$360 million raised by Pakistani startups in 2021

Comment by Riaz Haq on January 11, 2022 at 9:35am

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

Comment by Riaz Haq on January 15, 2022 at 7:53am

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.

Comment by Riaz Haq on January 15, 2022 at 10:19pm

Arif Habib Limited
Remittances up by 3% YoY during Dec’21

Dec’21: $ 2.5bn, +3% YoY | +2% MoM
1HFY22: $ 15.8bn, +11% YoY
CY21: $ 31.0bn, +19% YoY

Comment by Riaz Haq on January 17, 2022 at 5:44pm

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


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