:k:
Re: GDP increases 5% : SBP’s first Quarterly Report
Pakistan among top three contributors in NEPA, Microsoft – The Express Tribune
Oil, gas firms win eight more exploration licences – The Express Tribune
Huawei anticipates arrival of 3G to unlock further growth – The Express Tribune
Re: GDP increases 5% : SBP’s first Quarterly Report
Thats good, but inflation has increased (which will hurt middle and poor of the country), similarly the foreign currency reserves are dwindling.
Re: GDP increases 5% : SBP’s first Quarterly Report
For the first time in the countrys history, quarterly GDP growth has been publicly announced. Though this is a step in the right direction, PBS should have released its computation methodology and the detailed numbers that culminated into the reported growth rate. A summary of the sectoral growth rates is shown in table 1. In particular the estimated growth rate of services is on the high side, for reasons given below.
There is an imperative for issuing details especially since the growth rate of five percent is significantly higher than that reported over the past five years (average growth of 2.9 percent). In the absence of a publicly available methodology and detailed numbers, it is but natural that economic pundits and analysts alike are eyeing the reported growth rate with some suspicion.
Generally, there are two widely adopted approaches used to compute GDP numbers: sectoral calculations and the expenditure method. The former uses numbers from agriculture, industrial and services sectors to provide an aggregated growth rate. Since it is hard to compute the growth of the heavy weight services sector, the expenditure approach of the second method is more appropriate.
BR Research used proxies in the expenditure approach to calculate the quarterly GDP and that in contrast with the government released numbers came out about 2.8 to 3.0 percent in the first quarter (please see table 2 for details).
Using this method, national income is broken into the following components: private consumption expenditure; public consumption expenditure; gross capital formation and exports (net of imports) of goods and services.
It is simpler to calculate public consumption expenditure based on the first quarter released fiscal operation numbers by the Ministry of Finance. On that basis, the governments current expenditure on goods and services has increased by 13.6 percent, which when adjusted for inflation (avg CPI: 8.1%), provides a real growth of 5.5 percent in the first quarter.
Then it is easier to find gross capital formation which has three components. Public capital formation is the sum of Federal and provincial development budgets rolled out. That has been sliced considerably to curtail the fiscal deficit, so real growth here registered a decline of 42.8 percent. The other components are private capital formation and investment in housing.
By using a proxy of import of machinery, the private capital formation is computed at a healthy growth of 24 percent which is primarily due to increased investment in the power sector. The housing component is estimated based on use of cement which remained stagnant at last years level. Aggregating these, BR Research recorded growth of 2.1 percent in overall gross capital formation.
The third component in the expenditure method is exports net of imports which can be computed using numbers provided by either PBS or SBP. Growth in export of goods and services in dollar terms was negative 6.1 percent. This decline is attributable to loss of growth in services sector mainly due to absence of defense exports, consisting of inflows from the Coalition Support Fund, during the first quarter.
The most important part of GDP is private consumption expenditure which has the highest weight of 77 percent and is difficult to compute given the constraints of data availability. Tax revenues from indirect taxes are used as a proxy to compute growth in this magnitude as consumption is directly linked to General Sales Tax, Petroleum Development Levy and Excise Duty.
In a nutshell the non-food consumption data is available via taxes. It gives us a nominal growth of 12.6 percent, which when adjusted for inflation, comes to 4.5 percent. If we assume that food consumption also grew at a comparable nominal rate, higher food inflation would slice the real growth in that segment.
*Summing up all these numbers, the GDP growth is computed at 2.8 percent which is lower than the growth rate reported by the government (5 percent). This breakdown reiterates the need for greater transparency in the governments methodology for calculating economic aggregates including the GDP growth rate. *
It is readily conceded that the above estimates are subject to a margin of error because of the use in some cases of proxies. However, given the lack of high growth in exports and development expenditure, two major drivers of growth, it is unlikely that the GDP growth rate reached 5 percent in the first quarter of 2013-14. This is despite a visible upsurge in large-scale industrial production.
We hope that PBS will shortly release its methodology for estimation of quarterly GDP along with the estimates for the first quarters of 2012-13 and 2013-14.
Re: GDP increases 5% : SBP’s first Quarterly Report
the headline seems misleading as well, GDP increases 5 %. Has it increased to 5 %, or increased 5 % from the previous years quarter of the corresponding period (2.9 %)
Re: GDP increases 5% : SBP’s first Quarterly Report
The increase is probably in % of the GDP i.e. from 2.8 last year to 2.94 this year :D
Re: GDP increases 5% : SBP’s first Quarterly Report
In economic terms it's always compared to the previous year. The yearly growth rate also applies to the previous year. That is always the benchmark in growth. So its not misleading its standard practice.
Re: GDP increases 5% : SBP’s first Quarterly Report
In economic terms it's always compared to the previous year. The yearly growth rate also applies to the previous year. That is always the benchmark in growth. So its not misleading its standard practice.
So has the GDP risen to 5 %? or increased 5% of 2.9 (2.9+2.9*5/100=3.045 %)
Re: GDP increases 5% : SBP’s first Quarterly Report
The Express Tribune article is so badly written I can’t tell. The Dawn has a better article if i can find it.
It could be two things based on the article i can’t tell.
- Compared to the previous year the GDP growth this quarter was 5%.
- The economy grew by 5% from the previous quarter which would be super high me thinks and not entirely possible.
http://www.dawn.com/news/1090094/pakistan-gdp-growth-exceeds-expectations-sbp
There you go. See the dawn explains it perfectly.
Re: GDP increases 5% : SBP’s first Quarterly Report
For the first time in the countrys history, quarterly GDP growth has been publicly announced. Though this is a step in the right direction, PBS should have released its computation methodology and the detailed numbers that culminated into the reported growth rate. A summary of the sectoral growth rates is shown in table 1. In particular the estimated growth rate of services is on the high side, for reasons given below.
There is an imperative for issuing details especially since the growth rate of five percent is significantly higher than that reported over the past five years (average growth of 2.9 percent). In the absence of a publicly available methodology and detailed numbers, it is but natural that economic pundits and analysts alike are eyeing the reported growth rate with some suspicion.
Generally, there are two widely adopted approaches used to compute GDP numbers: sectoral calculations and the expenditure method. The former uses numbers from agriculture, industrial and services sectors to provide an aggregated growth rate. Since it is hard to compute the growth of the heavy weight services sector, the expenditure approach of the second method is more appropriate.
BR Research used proxies in the expenditure approach to calculate the quarterly GDP and that in contrast with the government released numbers came out about 2.8 to 3.0 percent in the first quarter (please see table 2 for details).
Using this method, national income is broken into the following components: private consumption expenditure; public consumption expenditure; gross capital formation and exports (net of imports) of goods and services.
It is simpler to calculate public consumption expenditure based on the first quarter released fiscal operation numbers by the Ministry of Finance. On that basis, the governments current expenditure on goods and services has increased by 13.6 percent, which when adjusted for inflation (avg CPI: 8.1%), provides a real growth of 5.5 percent in the first quarter.
Then it is easier to find gross capital formation which has three components. Public capital formation is the sum of Federal and provincial development budgets rolled out. That has been sliced considerably to curtail the fiscal deficit, so real growth here registered a decline of 42.8 percent. The other components are private capital formation and investment in housing.
By using a proxy of import of machinery, the private capital formation is computed at a healthy growth of 24 percent which is primarily due to increased investment in the power sector. The housing component is estimated based on use of cement which remained stagnant at last years level. Aggregating these, BR Research recorded growth of 2.1 percent in overall gross capital formation.
The third component in the expenditure method is exports net of imports which can be computed using numbers provided by either PBS or SBP. Growth in export of goods and services in dollar terms was negative 6.1 percent. This decline is attributable to loss of growth in services sector mainly due to absence of defense exports, consisting of inflows from the Coalition Support Fund, during the first quarter.
The most important part of GDP is private consumption expenditure which has the highest weight of 77 percent and is difficult to compute given the constraints of data availability. Tax revenues from indirect taxes are used as a proxy to compute growth in this magnitude as consumption is directly linked to General Sales Tax, Petroleum Development Levy and Excise Duty.
In a nutshell the non-food consumption data is available via taxes. It gives us a nominal growth of 12.6 percent, which when adjusted for inflation, comes to 4.5 percent. If we assume that food consumption also grew at a comparable nominal rate, higher food inflation would slice the real growth in that segment.
*Summing up all these numbers, the GDP growth is computed at 2.8 percent which is lower than the growth rate reported by the government (5 percent). This breakdown reiterates the need for greater transparency in the governments methodology for calculating economic aggregates including the GDP growth rate. *
It is readily conceded that the above estimates are subject to a margin of error because of the use in some cases of proxies. However, given the lack of high growth in exports and development expenditure, two major drivers of growth, it is unlikely that the GDP growth rate reached 5 percent in the first quarter of 2013-14. This is despite a visible upsurge in large-scale industrial production.
We hope that PBS will shortly release its methodology for estimation of quarterly GDP along with the estimates for the first quarters of 2012-13 and 2013-14.
Or you know they could have just done.....what was the GDP in December 2013? 100? Oh.....and whats the GDP now? 105? hmmmm....that is a 5% growth. Cool. Seriously its not rocket science.
Re: GDP increases 5% : SBP’s first Quarterly Report
So is increase of GDP a good thing? The thumbs up icons in this thread are saying ‘yes’. Even though the % increase is so slander that it could be someone playing with numbers.
But if it is so good that even 5% increase is worthy of ‘thumb ups’ then why can’t people see WHAT TIME it was HIGHEST?
If people can’t be honest enough to say and acknowledge it then they are only doing politics. They would be happy of increase in GDP only if it happens during the period of THEIR guy.
Now please note when it was the highest:
Yes, it was during Musharraf’s era. The same Musharraf who was thrown out by people for the sake of Iftikhar Chaudhry. Democracy has been taking its ‘revenge’ on people after that ever since.
Re: GDP increases 5% : SBP’s first Quarterly Report
Remeber that 2008 also coincides with global financial crises and GDP growth rate in several economies was negative for that time period.
Re: GDP increases 5% : SBP’s first Quarterly Report
Actually no the highest was either Ayub or Zia’s time frame. And more importantly not that all that great growth rate was dependent on US support.
Re: GDP increases 5% : SBP’s first Quarterly Report
Remeber that 2008 also coincides with global financial crises and GDP growth rate in several economies was negative for that time period.
Well, that explains it all. Doesn't it?
Re: GDP increases 5% : SBP’s first Quarterly Report
Actually no the highest was either Ayub or Zia's time frame. And more importantly not that all that great growth rate was dependent on US support.
There is no point talking about Ayyub or Zia anymore. Regarding US aid, one should know that most of that aid was remuneration money.
I know certain type of 'mein na maanoon' people. I only hope that some of the readers would understand how people jump and down when merely 5% GDP is achieved by THEIR guy. Yet make excuses after excuses when even higher growth was achieved a few years back CONSISTENTLY by someone they don't like.
They need selective prosperity. If it is not their guy then they would rather die of hunger.
Re: GDP increases 5% : SBP’s first Quarterly Report
Well, that explains it all. Doesn't it?
pretty much.
Re: GDP increases 5% : SBP’s first Quarterly Report
You never cease a chance to praise your leader by hook or by crook eh! When there will be peace in Pakistan, no energy crisis, low inflation and prices of essential commodities less than the previous governments, when there will be less corruption, when there will be better law and order in the country, when there will be better economy, when jobs will be given to unemployed not only in Punjab (because for you Punjab is Pakistan) but whole Pakistan, when there will be influx of tourists, when there will be… and lists goes on and on. Unless any one item in above list is achieved, you are wasting your time here posting bogus, trash praise of your paya and nihari brain leaders. kapish !
Re: GDP increases 5% : SBP’s first Quarterly Report
pretty much.
Sure. Had the world not faced that economic downturn, Pakistan would have continued on the prosperous path. After all, Pakistan being such a big international player in world economy, is directly affected by the happenings at global level.
Re: GDP increases 5% : SBP’s first Quarterly Report
Sure. Had the world not faced that economic downturn, Pakistan would have continued on the prosperous path. After all, Pakistan being such a big international player in world economy, is directly affected by the happenings at global level.
so you mean the world can go down the drain while Pakistan can stay course?
Re: GDP increases 5% : SBP’s first Quarterly Report
Sure. Had the world not faced that economic downturn, Pakistan would have continued on the prosperous path. After all, Pakistan being such a big international player in world economy, is directly affected by the happenings at global level.
Not a big player, but 'dependent' on the west, specially when we have uniformed puppets in power.