Todays Jang The News reports the pakistan economy has reached 7Billion dollars current deficit this year (compare 4.9 last). Trade gap is whopping 13.5 billion.
Lack of iondustrial and export diversification have also been cited as big risks.
I don’t get it - all this time everyone was saying and I was accepting, that the ecoinomy is doing gang busters and now this!
Wth is. Going on?
Re: pakistan economy? warnings from IMF and ADB
I have googled a few sites, but the overall picture I am getting is that Pak economy is doing well.
So not sure what the above figures mean.
Perhaps like a morgage they talk about the loan, not the equity in the house?
Re: pakistan economy? warnings from IMF and ADB
Wth is. Going on?
The best barometer that Pakistan is doing Great......................
BB wants to come back, and get her 10%.....................:D
Re: pakistan economy? warnings from IMF and ADB
7 billlion is the gdp which is growing at a really fast rate,
trade gap is just about import and exports, its bad now cos imports is higher then exports, but that is short term as pakistan is going through an industrial boom and exports are rising all the time, so in a few years export will go past imports.
so overall the economy is doing fantastic
Re: pakistan economy? warnings from IMF and ADB
7 billlion is the gdp which is growing at a really fast rate, trade gap is just about import and exports, its bad now cos imports is higher then exports, but that is short term as pakistan is going through an **industrial boom **and exports are rising all the time, so in a few years export will go past imports. so overall the economy is doing fantastic
May I ask what kind of industrial boom we are having? What industries are being setup/qualified which will help in exports?
Re: pakistan economy? warnings from IMF and ADB
There are a lot of underlying problems with the Pak economy that the govt isnt paying attention to... We need further reforms..
Re: pakistan economy? warnings from IMF and ADB
You guys should take a look at the actual piece in Jang. Kinda ominous - they use terms like 'economy won't be able handle.
Anyways - benazir is back, ganja is coming - musharaf is around and iftikar is not in jail! Who could ask for anything more!
Oh yeah, imran's marriage counseling business is growing too and kiyani is proving his bombs really work when tossed from a plan into subsi mandi.
Re: pakistan economy? warnings from IMF and ADB
May I ask what kind of industrial boom we are having? What industries are being setup/qualified which will help in exports?
alot of industries are being setup, currently sunder industrial estate was just setup and is the countrys biggest industrial estate, currently there are over 60 units operational in there and over 300 under construction, MIE also has been made last year and he biggest project would be M2 the industrial estate being made in faislabad, many times bigger then the sunder industrial estat and would provide 4 million jobs to the 3 million populated city.
other then that many big cemant factories have been setup in chakwal district.
theres alot happening in industry in pakistan, you can get more info from the smeda office.
Re: pakistan economy? warnings from IMF and ADB
IMHO overall economy is doing well; however there are some concerns among the economic managers about the growing deficit, CPI and inflation. Most of the economic barometers are positive; for example for past four years the economy has developed at approximately 7%(which is very decent). Per capita income has also risen to U.S. $925, although still a meager amount compared with some other Asian countries but the point is that it's growing at a much faster pace than ever before and if the economy keeps growing at 7% for another 4-5 years, we will very easily cross U.S. $ 1100 by 2011-2012. Stock market (although not a strong indicator of how the economy is performing) is also booming and shows that the business community (local or foreign) have faith in the current administrative financial policies. Foreign reserves are at all time high at about U.S.$ 16.12 billion. Now on the downside, inflation has also risen. CPI(consumer price index) is at an all time high at about 8%. I'm no economic expert, but from my limited knowledge about economics, whenever a country is fast developing, inflation, CPI usually goes up; its a simple matter of supply and demand. Not trying to compare, but inflation has also gone up tremendously to 5.3% in neighboring India and in other rapidly developing countries like Vietnam. There could be several reasons why trade deficit has gone North; all time high oil prices, Pakistani companies importing more machinery from other countries to assemble more consumer products locally etc. hence increasing the import bill.
Re: pakistan economy? warnings from IMF and ADB
alot of industries are being setup, currently sunder industrial estate was just setup and is the countrys biggest industrial estate, currently there are over 60 units operational in there and over 300 under construction, MIE also has been made last year and he biggest project would be M2 the industrial estate being made in faislabad, many times bigger then the sunder industrial estat and would provide 4 million jobs to the 3 million populated city.
other then that many big cemant factories have been setup in chakwal district.
theres alot happening in industry in pakistan, you can get more info from the smeda office.
This post look more like the promises/news about "Dubai to invest $10billion".... so 'cement' is one, what other industry? What is SMEDA?
Re: pakistan economy? warnings from IMF and ADB
Actually there is nothing to worry about other than incompetent, thugs, and corrupt managers taking over again, God forbid.
Trade deficit is worrying if Pakistani rupees start devaluing against dollar in open market and reserves start going down rapidly. As long as Reserves are stable or increasing, Pakistan foreign debt is not increasing with respect to economy, and rupee is stable against the dollar, there is nothing to worry about trade deficit. Those who are getting worries do not know what happening in depth. Pakistan total dollar earnings does not entirely depend on trade, as Pakistan has many components and its no point going in detail on all components.
[Rupee value against US dollar is important, because bulk of Pakistani trade is done in US dollars and most of Pakistan external debt is also in US dollars].
As for economy, that is robust and increasing at around 7 percent plus a year, and that is most healthy sign.
As for rise in stock market, some ignorant considers that as bubble and due to remittances, but that is not the case. If that would have been the case than ‘Price to earning ratio’ of KSE would have deteriorated. I believe that today ‘Price to earning ratio’ of KSE is still much better than most developing stock market. I think that at present PE level, KSE is still under valued by more than 100 percent. So, nothing to worry about unless ‘incompetents, thugs and corrupts’ come back in power and start looting, plundering and mismanaging the economy. That would start reducing the earning of quoted stocks in KSE, and that means PE getting higher, means price of stock would start coming down to adjust with lower earning.
As for inflation, I think that as long economy grows at more than 7 percent and inflation stays under 10 percent, it would be fine. [Pakistan in past (during ZA Bhutto time) has seen inflation of even more than 20 percent, and inflation during corrupt period between 1988-1999 was over 10 percent quite often].
As for manufacturing and industrial development, Pakistan has seen increase in this sector during last 8 yeas more substantially than service and agriculture sector. For instance, most of the items that Pakistan manufacture has increased several fold (many 100 percents) and there are many new items that Pakistan manufactures today that Pakistan never use to manufacture.
Motorcycle, Car, cement, TV, Refrigerator, Air conditioners, washing machine, fertilizes, tractors, different type of chemicals, sugar, etc … etc …etc … has increased many folds during last 8 years, something like few hundred percents (few fold) to 1000 percent (10 fold).
Re: pakistan economy? warnings from IMF and ADB
Trade deficit is worrying if Pakistani rupees start devaluing against dollar in open market and reserves start going down rapidly. As long as Reserves are stable or increasing, Pakistan foreign debt is not increasing with respect to economy, and rupee is stable against the dollar, there is nothing to worry about trade deficit. Those who are getting worries do not know what happening in depth. Pakistan total dollar earnings does not entirely depend on trade, as Pakistan has many components and its no point going in detail on all components.
And if the dollar is losing it value against major currencies of the world??? Pakistani economy is not tied with US dollar alone I believe.
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As for rise in stock market, some ignorant considers that as bubble and due to remittances, but that is not the case.
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And some ignorants believe that rising KSE shows strength of economy, it shows stability of an economy.
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As for inflation, I think that as long economy grows at more than 7 percent and inflation stays under 10 percent, it would be fine.
[/quote]
Wow, so growth of economy can be 7 percent and inflation lets say 9% you think we are gonna be fine? Don't you think commodity prices will be away from more and more wallets?
Re: pakistan economy? warnings from IMF and ADB
^ okay so SMEDA seems like SBA(?) in US... I haven't thought of a business in Pakistan yet, so I didn't know :p
Re: pakistan economy? warnings from IMF and ADB
promises???
i have seen sunder industrial estate with my own eyes bhai jaan, i have seen hundreds of factories under construction in the estate, and many running,
and what are you talking about dubai to invest $10 billion??? what news was that, dubai is a country not a business or a company.
cement is one, marble is another, paper is another and many others,
you dnt know what SMEDA is and you want to talk business, LOLZZZZ
www.smeda.org
gov. has gone very friendly in helping businesses, now for the first time smeda and BOI are offering virual online desk to help people start businesses in pakistan, over the net,
loans are being offered left right center and for the first time gov. is offering grants and free plots for industries.
and you are asking me what industries have started. LOL
Re: pakistan economy? warnings from IMF and ADB
bhekava hey.
it is called creating fear to create a punishment.
if the economy is so bad, then how come so many middle to upper class peopl are capable of erecting their mansions, and having the kinds of international businesses and shops that they have.
the problem is the whole nation's consumership and cash flow mechanisms, together with corruption at all levels.
in a fair and just state, the accountability of every grain of rice, if you will, is called for.
where as sadly, in the current state of affairs, whole pieces of land, are going unccontable due to back scratch buddy system and fearful scaring ploys internally and externallly.
that said, the imf is a tool of the devil.
you give monies to weak nation states, who are already ensnared by your ploys of long term hegamony, by way of sanctions, and commerce acts, which do not favor the seller or the manufacturing/ exporting country's treasury or economy at all.
adb is yet another sub-agency of imf which ensures that the negative impact becomes materialized.
if only Pakistan's agriculture and industry was in hands that were built of iron will of its people, who wont allow anyone within or without to plunder the country's natural resourcs, production and human capital.
if only.
Dushwari
Re: pakistan economy? warnings from IMF and ADB
I didn’t question construction of ‘sunder industrial estate’, I don’t know if it is a complex of factories/industries or what, anyways as you said it has hundreds of factories so it might be something like SITE (Karachi).
I can’t dig through past threads, but there were many threads regarding such investments… Dubai is a ‘state’ but something like ‘kingdom’ so they can invest using some ‘corporation’ name etc.
Now we are talking, that is good to hear, I was curious about what exact industries are popping up.
okay so SMEDA is like KSE or GDP now?
I guess that shows in the ‘ease of starting business’ index in a report published few days ago.
I know about loans, didn’t know about grants/plots… again your “LOL” seems more like ‘lul’ because of irrelevancy.
Re: pakistan economy? warnings from IMF and ADB
sunder industrial estate, like its name is an industrial estate, yes like SITE but much bigger,
there have been big industrial estates made in punjab, like i said in faislabad, theres a massive one coming up and then also on the upcoming lahore-sialkot motorway a qatari is setting up a $1 billion industrial estate.
[QUOTE]
I can't dig through past threads, but there were many threads regarding such investments... Dubai is a 'state' but something like 'kingdom' so they can invest using some 'corporation' name etc.
[/QUOTE]
you must be talking about emaar and nakheel,
well emaars 2 projects have allready started in pakistan, cresant bay in karachi and canyon views in islamabad,
go to skyscrapercity.com and check the pakistan section, there are pictures there.
not sure about any other dubai investments, but there investment stated was over $100 billion combined, not 10.
nakheel is yet to start there project but plans are ready and will be loacted at hawks bay, theres a video on youtube on it,
Re: pakistan economy? warnings from IMF and ADB
I have googled a few sites, but the overall picture I am getting is that Pak economy is doing well.
**So not sure **what the above figures mean. Perhaps like a morgage they talk about the loan, not the equity in the house?
hahahaha.......in today's world the only source of info is google and websites.
Bhai this is very simple in layman's language, people from economic critics to SEC are crying for last four years, that government has no plans for the huge aid its getting direct deposit from US govt and the pile of Billions Pakistani living abroad sending to Pak after 911. Investing in infrastructure is good, and selling white elephants (if there were any at the time of privitization) is also good, but having foreign teddy banks taking most advantage (32% return per year) sucking blood of poor at the name of mortgages and car loans, is not a sign of healthy economy. If you see most people working in new banks (or financial inst.), leasing cars and paying mortgages, its the SAME money that is injected in the economy from abroad and it is not circulating as it should, rather its paying investors 5-6% and charging customers upto 32%. Its the biggest scam of Aziz-Tareen team. The economy is not healthy because of the above reasons, instead this very money (or major part of it) must have been invested in manufacturing and services to increase exports.
So all the paisa that is coming into the country is either used in luxuries like above and small amount is spent on infrastructure (mainly khooshaal Punjab initiative) but very minimal to increase exports (that creates jobs for all sectors btw).
Re: pakistan economy? warnings from IMF and ADB
^ but even those luxuries are goods that somebody is manufacturing. Now, it'd be different if majority of it is imported vs made locally
Re: pakistan economy? warnings from IMF and ADB
trade and fiscal deficit shouldn't necessarily mean economy is doing bad. even US has trade and fiscal deficits and also india. Not an economics expert..but i guess it depends on how the government makes up for those deficits. US government issues T-bonds to make up for fiscal and even trade deficits. May be perhaps even by FDI those losses are filled up. Moreover, the more you import, the stronger your currency becomes.