For economy, 2011 was the year that saw Pakistan face a worsening gas crisis, America lose its top credit rating and the Eurozone crumble financially.
Oil-price Ferris wheel stops at a high — February 2011
The Arab Spring brought with it the fear of decline in oil output. It started with the Tunisian protests and the stoppage of Libyan oil export, and continued with the Iranian oil sanctions and the current Strait of Hormuz conflict between Iran and the US. Oil prices rose approximately 9.5 per cent this year.
Gas crisis in Pakistan — March 2011Gas shortages, load-shedding, and tariff hikes were making the news on a daily basis in 2011. While conflicts on reserve estimates persisted, blows were delivered to power generation and CNG consumers, with local industry suffering high electricity and fuel costs. Tariff for industrial usage, such as textiles, fertilizer rose by 50 to 100 per cent.
Floods of 2011 and nose-dive in agricultural prices — July/August, 2011The government failed to take note from the 2010 floods and was unprepared for further damage. This year’s devastation had a greater impact in Sindh, where cotton, rice and sugarcane crops were destroyed on a wide scale. Ironically, towards the end of the year, prices of agricultural commodities started dropping and as consumers failed to benefit from the price drop, growers took the largest hit.
Raising the debt ceiling & credit downgrade — August 2011Having reached its previously set debt ceiling, the United States had to raise the bar once again to avoid hitting a default. While the ceiling had been raised, the US credit rating had been downgraded to AA+ in light of the same.
Pakistan steps out of IMF Programme — September 2011Pakistan ended its 12th unsuccessful IMF loan programme on September 30, 2011, choosing to opt out entirely to date. While rumours of seeking a new programme are afloat, no formal request has been made again.
The domestic debt hike — September 2011After ending its IMF programme, Pakistan’s dependency on domestic debt, which had been growing since 2008, finally reached a new high. It stands at 30 per cent of GDP, or an odd Rs5 trillion.
Steve Jobs dies — October 2011Apple founder and CEO resigned early this year due to ill health, and passed away on October 5, 2011 fighting with cancer.
The beginning of expansionary monetary policy — October 2011The State Bank of Pakistan reduced its key policy rate (discount rate) to 12.5 per cent, the lowest in three years. This gave hope for cheaper industrial credit and for a diversion of savings into stocks and other alternate investments.
Eurozone Crisis — November 2011The global recession and financial fall of major Eurozone members pushed the whole region into a major financial crisis, with Greece being the most volatile, where an ouster from the Euro was considered, while a bailout was achieved. The EU then set a trillion-dollar bailout fund target for Eurozone members.
China manufacturing slows — November 2011For the first time in history, China’s manufacturing growth halted in November and the same was estimated for December. The HSBC purchasing managers’ index (PMI) for China hit 48.7 in December month, where a score below 50 denotes contraction.
Russia joins the WTO (December 2011)After an 18-year struggle to join the World Trade Organisation, Russia was finally granted membership and it will now look to expand its global trade scope.
Global stocks in circles — December 2011While the Dow index performed well this year, all major global indices either underperformed or declined over the past year, with FTSE and European exchanges being the biggest losers. The KSE-100 itself shed more than 650 points over the past year.