Pakistan has stabilized its accounts, not its economy. Last week FBR beat its quarterly target, reserves stayed above $21bn, the debt ratio fell and the IMF review opened without drama. That same week public debt touched Rs86.7tr, gross financing needs neared a fifth of GDP, inflation stayed above 10pc and investment held back. A Gulf oil and LNG shock set the outlook, and cabinet committees decided who could import LNG, export sugar or get fuel relief. The state has learned, after a fashion, to manage its cash, not how the economy produces, prices or allocates. The press covered the short-term fiscal scramble and missed the long-term decline underneath it, which has not changed. Nobody reached for the local research that explains why.

Debt: Hardly anyone mentioned that the IMF's own projections show a financing gap of more than $20bn a year persisting through 2030. At home the state must raise Rs28.65tr this year to cover the deficit and roll over maturing debt. That is a fifth of GDP, nearly twice FBR's take, much of it short-dated paper that reprices every few months. This is where the real vulnerability lies. Banks lend to the government instead of to firms. Every rise in the policy rate comes straight back as a bigger deficit. And externally we remain dependent on rolled-over Chinese and Gulf deposits and on Fund money.

Then there are the contingent liabilities. Profit's number for guarantees, Rs4.28tr with more than half in power, may have been the most important figure of the week, and it ran as a line item. Circular debt, the losses of PIA, the railways, the gas utilities and the distribution companies, and an unfunded pension bill all sit outside the Rs86.7tr. Nobody asked how much of the power sector's debt is already sovereign debt in all but name, or what Rs37tr of new borrowing over four years actually bought. We discuss public debt only as the government announces it, with little memory of what is kept off the books. That debt will come back to haunt us.

The IMF and the fuel subsidy: This is Pakistan's 25th IMF program. Shahbaz Rana of the Tribune covered it best. In “IMF pushes targeted subsidies” and “Petrol subsidy puts govt, IMF at odds” he reported the Fund's objection to fuel relief targeted by vehicle size rather than income, its push to route support through BISP, and an Rs853bn discrepancy in the fiscal accounts. By October 2 the prime minister's Rs75bn scheme, Rs100 a liter for small cars plus weekly tokens for motorcycles and rickshaws, was being shelved because oil had eased. The petroleum levy, meanwhile, over-collected by about Rs99bn.

Look at what the two sides were arguing over: the price........

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