Macro Bites

Macro Bite # 45

4 min read

This week, the recently appointed Finance Minister, Shaukat Tarin, held a press conference to lay out his plan for the Pakistani economy. While the plan, on the face of it, looks to be tackling most of the issues Macro Pakistani has highlighted, Tarin also wants to update the methodology for estimating inflation in the country. According to him, Pakistan Bureau of Statistics needs to widen its coverage of price surveys to report inflation that is more reflective of the situation in the country. Macro Pakistani believes that more than widening the coverage, PBS needs to reassess its use of consumption basket from 2015-16 in estimating inflation today. Over the last 5 years, and especially during the pandemic, consumers’ spending habits have changed. Pandemic-era inflation could be 1% higher than officially reported numbers if updated spending on food and housing is taken into account. We will explain this further in our BaKhabar video series in the coming weeks. However, next week, we will be taking a break on account of Eid-ul-Fitr. Early Eid Mubarak to all those celebrating!

What is the relationship between the IMF and Pakistan?

By Fakiha Hassan Rizvi

As everything went online during the pandemic, consumer behavior in Pakistan changed drastically in the last year. Digital advertising has become more important than ever, leveraging the increase in internet users in the country. Even before the pandemic, share of digital advertising revenue as compared to overall ad revenues was on the rise. Since 2015, digital ad spend has increased by over 30% each year, while traditional advertising mediums have suffered. In 2020, digital ad spend increased by 18% and is predicted to increase by a further 21% in 2021.

Even before the pandemic share of Digital Ad revenue was increasing in Pakistan

Source: Aurora Fact File, Aurora in consultation with Industry experts

Over the last year, online Pakistani consumers have become more sophisticated, conscious of sustainability, reliant on video content and concerned about living healthy lifestyles. Google’s report on what Pakistan is searching for is a must-read for brands looking for insights into consumer behavior in Pakistan. Read the full article if you want a brief overview of the report, along with an introduction to Brand Nib, Macro Pakistani’s digital marketing consultant. Over the last year, not only have they helped us deliver bite-sized aesthetically pleasing content, their insights into how consumers behave in Pakistan have helped increase our followership by 15x.


KSE-100 returned to growth this week, up over 2% with business friendly comments by the new Finance Minister. Strong exports, particularly in IT and Textiles, continue to power industries forward. They have also helped appreciate the PKR to its lowest level since June 2019. The dollar fell to its lowest level in more than 2 months, which strengthened the PKR further. Gold prices remained stable in line with international prices.

The annual in Sensitive Price Index is up to 17.05% vs. 16.90% last week. The whole country experienced slightly higher inflation on an annual basis than last week. The lowest 20% of the population still faced inflation of almost 20%. Weekly inflation is up slightly due to increase in prices of a few food commodities. Increase in prices of Chicken (+10.36%) was the single largest contributing factor toward inflation this week. Wheat prices also continued to rise during Ramadan, increasing by 2.89% since last week. Drop in prices of Eggs (-6.29%), Onions (-4.61%) and Potatoes (-1.30%) helped moderate food inflation while LPG prices also feel last week.

What Else We’re Reading (Local)

  • Pakistani banks don’t lend to the private sector due to rise in share of Non-Performing Loans from bad faith actors and lack of legal enforcement (Profit)
  • The World Bank is distancing itself from accusations that it was responsible for evictions due to nullah cleaning in Karachi under the SWEEP project (SAMAA)
  • Rising cases in India and decline in Chinese exports are giving Pakistan’s textile exports another boost, after climbing over 30% since last year (Business Recorder)

What Else We’re Reading (International)

  • Concrete steps on climate adaptation and finance are needed to tackle the global climate crisis, which is nearing the threshold of irreversibility (Reuters)
  • Germany rejects US move to suspend intellectual property rights on vaccines as loosening trade rules will threaten production of COVID therapies (Financial Times)

Faiz Ahmed

MBA Candidate at Harvard Business School with prior experience at Bain & Company, International Finance Corporation and State Bank of Pakistan. He is also the Founder of Macro Pakistani.

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