Risks to economy growing.. State Bank.

Society Pakistan & World Affairs
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Re: Risks to economy growing.. State Bank.

Bhaijaan, do you honestly think anyone in Pakistan cares how much the minimum wage is, or follows it? The govt can make it 50,000, koi farq nahee parey ga.

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Re: Risks to economy growing.. State Bank.

If you want to know above increase in dollars ... than that is 342 percent ... or you can say that salary of poor in Pakistan increased by around 3.5 times in dollars over last 8 years. Don't you think that it is huge rise ... more than 16 percent a year increase in dollars ... every year since last 8 years? I do not think that such increase (in dollars) has ever happened in any western country continously for 8 years.

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Re: Risks to economy growing.. State Bank.

^ And care to explain the 'inflation' ?

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Re: Risks to economy growing.. State Bank.

meray bahi .. government is the major employer in Pakistan. Most of those employed in health sector, education sector, police, judiciary, army, banking sector, road cleaners, WAPDA (most workers in electricity generation and distribution), Railways, dock yards, steel mill, building site workers, ... etc ... well, I think that most employees in Pakistan are government employees (either employed by Federal government or provincial government). I think that government in Pakistan employees maybe 60 percent (or more) of Pakistan work force (excluding farm workers). In villages, almost all who are working work for government (exclusing farm workers).

You might say that there are limited number of people in government jobs working on minimum wage. But the thing is that, all government employees got similar rise ... around 350 percent during last 8 years, be they working at grade 1 or grade 22.

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Re: Risks to economy growing.. State Bank.

Spock Bhai you are wrong there.....every major industry/corporate entity....whose accounts are duly audited....has to respect minimum wage laws....and this sector is a major employer in Pakistan....

Mostly these laws are not implemented in informal sector and agricultral sector....

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Re: Risks to economy growing.. State Bank.

In one word ... overall inflation in Pakistan was 54 percent ... or 62 percent if one takes sensitive items (that is from 1999 to 2007) ... and as you can see, this is much lower than wage increase ... that is around 350 percent during same period ... and that is why one can see lot of increase in consumptions of consumable goods, including electricity, gas, fuel, sugar, etc ... or increase in possessing of durable goods like car, motorcycle, TV, mobile, VCR, refrigerator, etc.

Now, as you are talking about inflation, than first let me tell you how inflation (or price hike) in a country is calculated, as it seems some believe that quoting few items would fool the masses.

In statistical department a survey is carried out all over the country and then department works out what percentage of income people spend on various goods and services. From their survey of people’s expenditure, statistical department selects items that consumes average people’s major budget. They call it ‘basket of goods and services’ for calculation of inflation. Some of the major areas included in this basket are cost of food, cost of clothing, cost of accommodation (rent or/and mortgage), cost of fuel, cost of traveling, cost of entertainments, etc.

Then department works out weighting for each major item they selected and normalize that part to 100 in their ‘basket of goods and services’ (actually, all prices are normalized to prices of selected base year … For Pakistan at present, this base year is 1999-2000, when prices in ‘basket of goods and services’ = 100).

Then depending on countries and their priority, Statistical department do exercise of checking average cost of items in the ‘basket of goods and services’ from all over the country using suitable interval in time, for instance every month (in some country it could be daily). Thus, from here they can calculate inflation in the country over month (or whatever… in Pakistan it is weakly exercise). A country’s inflation when quoted is inflation of this ‘basket of goods and services’ over one year (normally financial year).

With time, as the expenditure pattern of people changes, weighting of items in goods and services also changes and sometime it get replaced with other items. For instance, If most people eat beef than weighting of beef would be more than other meat and price changes of beef would effect inflation more, but a country where most people eat mutton than weighting of mutton would be more and price changes in mutton would effect inflation in that country more. If over time, people consumption pattern changes and people start consuming mutton more than beef, than in ‘basket of goods and services’ weighting of mutton would increase and in later years change in price of mutton would effect inflation more.

Data is so extensive that statistical department can give separate inflation for each city, for each income group (as basket of goods and services for different income groups are different), for each item in basket, etc. If you want to, you can get data of monthly price changes all over Pakistan from State bank of Pakistan (including weighting of each item in inflation figures). So, please do not try to misguide people with selective data that parties like PML(N) publishes to misguide people.

How inflation is calculated in Pakistan? :

*[So-called analysts who are part of propaganda mechine quote price of selective few items, mostly those items that may have gone up seasonally or due to shortage for small period. They also do not put any weighting on items]. *

To calculate price inflation in Pakistan, 374 different items are taken into account. **71 markets from 35 different cities in Pakistan are chosen. Inflation is worked out for 4 different income level groups. In basket of goods and services there are 10 different groups, with different weightings and number of items. For instance:**

Food and beverages
… No of different items = 124 … Weighting = 40
Apparel, Textile and footwear
… Items = 42 … Weighting = 6.1
House rent
… Items = 1 (that is rent) … Weighting = 23.43
Fuel and lighting
… Items = 15 … Weighting = 7.29
Household furniture and Equipments
… Items = 44 … Weighting = 3.29
Transport and communication
… Items = 43 … Weighting = 7.32
Recreation and Entertainment
… Items = 16 … Weighting = 0.83
Education
… Items = 24 … Weighting = 3.45
Cleaning, laundry and personal Appearence
… Items = 36 … Weighting = 5.88
Medicine
… Items = 29 … Weighting = 2.07

Total = 10 groupings of expenditures
… Items = 374 … Weighting = 100

Now just imagine that when there are 374 items in ‘Pakistani basket of goods and services’ how can quoting few selected items without even giving any weighting of item, by a political party that is full of liars, could tell what is happening to prices?

*Here is Pakistan Inflation figures from Pakistan statistical department [for comparison ... I am giving inflation figures of 8 years immediately before Musharraf period (1991-1999) and than 8 years once Musharraf period started (1999-2007)]: *

Consumer price inflation ... rise in percentage:

Period... ... ... CPI
1991-1992 ... 10.58
1992-1993 ... 9.83
1993-1994 ... 11.27
1994-1995 ... 13.02
1995-1996 ... 10.79
1996-1997 ... 11.80
1997-1998 ... 7.81
1998-1999 ... 5.74

1991-1999 (8 years) ... 115.66 percent (average inflation of 10.1 percent a year)

Musharraf period starts
1999-2000 ... 3.58
2000-2001 ... 4.41
2001-2002 ... 3.54
2002-2003 ... 3.10
2003-2004 ... 4.57
2004-2005 ... 9.28
2005-2006 ... 7.92
2006-2007 ... 7.77

So during last 8 years, overall inflation in goods and services was:
1999 -2007 (8 years) ... 53.44 percent (average inflation of 5.5 percent a year) that is less than half of what it was during previous 8 years (115.66 percent).

Or what Rs 100 could have bought (goods and services) in 1999, it cost today (July 2997) Rs 153.44 (that is the price increase over last 8 years)

Sensitive price inflation rise in percentage (that affects poor most):

Period... .... ... SPI
1991-1992 ... 10.54
1992-1993 ... 10.71
1993-1994 ... 11.79
1994-1995 ... 15.01
1995-1996 ... 10.71
1996-1997 ... 12.45
1997-1998 ... 7.35
1998-1999 ... 6.44

1991-1999 (8 yeears) ... 123.82 percent (average Sensitive price inflation of 10.6 percent a year)

Musharraf period starts:
1999-2000 ... 1.83
2000-2001 ... 4.84
2001-2002 ... 3.37
2002-2003 ... 3.58
2003-2004 ... 6.83
2004-2005 ... 11.55
2005-2006 ... 7.02
2006-2007 ... 10.82

1999-2007 (8 years) ... 61.55 percent (average Sensitive price inflation of 6.2 percent a year)

So during last 8 years, overall inflation in sensitive goods and services (related to esentials) was:
1999 -2007 ... 61.55 percent that is less than half of what it was during previous 8 years (123.82 percent).

Or what Rs 100 could have bought in essentials (goods and services for poor) in 1999, it cost today (July 2007) Rs 161.55 (that is the price increase over last 8 years)

Not bad when what poorest person use to earn in 1999 ... around Rs 1200 ... today (July 2007), he earns Rs 4600, a rise of over 380 percent. That means, even taking sensitive price inflation, the poorest person is around 2.4 times better off in 2007 than that person was in 1999.

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Re: Risks to economy growing.. State Bank.

well then you should not expect much from anyone, cos they all laught at you, and you should it expect it when you come out with such laughtable comments.

you have just become a laughting stock by showing your blindness again and again.

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Re: Risks to economy growing.. State Bank.

very well said :biggthumb

forget these people, they dnt care [EMAIL="cr@p"]cr@p about pakistan, let them enoy there lives in the west.

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Re: Risks to economy growing.. State Bank.

Any more killing, destruction and burning of businesses, destroying livelihood of thousands of people by the uneducated PPP supporters, will indeed result in a destruction of Pakistani economy.

# ~ :) ~ Kia Mein Shareef Hoon ? ~ :) ~
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Re: Risks to economy growing.. State Bank.

For once I could not agree with you more,,,,,let it be PPP supporters or anyone else....this is the biggest threat to our economy...

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Re: Risks to economy growing.. State Bank.

Absolutely. I have already put my expansion plans on hold. There will be many others that are doing the same - for the time being.

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Re: Risks to economy growing.. State Bank.

Also the MQM supporters on the orders of the PML[Shujaat/Elahi league]

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Re: Risks to economy growing.. State Bank.

Incomes have gone up, but only for the rich and upper middle class... The poor have seen relatively no change or have actually gotten poorer...

Minimum Wage the govt raised, but how do we know how many people are actually recieving that amount? We know unemployment is very high, but there is also the case of under employment, which is probably far higher then unemployment, but doesnt get any attention in govt census.

Despite govt numbers, all indictation are that the poor have not been helped by this booming economy...