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Pakistani Economic Stress Watch

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eklavya
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Re: Pakistani Economic Stress Watch

Postby eklavya » 09 Sep 2017 23:15



It's even worse than it looks for Pakistan as their currency is about 20% over-valued against the USD.

Despite the low oil price, Pakistan is running a huge current account deficit, and is perpetually on the verge of default of its foreign currency borrowings. If / when the oil price picks up, Pakistan's economy will implode.

Bangladesh has also benefitted from "exporting" what some reports suggest are 20 million of its citizens to India (that's almost 15% of its current population). I see a thread about 50,000 Rohingyas (basically bengalis living in Burma for centuries as far as I can tell) in India; what about the other 20 million!

Bangladesh has also benefitted from pro development policies and not wasting resources on its military. Some of its social indicators are actually ahead of India too.

kapilrdave
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Re: Pakistani Economic Stress Watch

Postby kapilrdave » 11 Sep 2017 18:30

Bangladesh benefits from its cheap labor. It's really cheap out there and people would work hard for extended shifts for very little. Their textile industry has picked up strongly. The only way to beat their cheap labor is by automation and mass production by biggies of India. That's what is being planned at the moment.

yensoy
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Re: Pakistani Economic Stress Watch

Postby yensoy » 11 Sep 2017 20:09

^^^^ True Bangladesh has very cheap and hardworking labour, but what really benefits them is the quota system. And I hope for Bangladesh's sake and our sake it stays that way. Otherwise there will be huge pressure on our Eastern border - humanitarian challenges, population growth (when people are unemployed, what do you think they do?), extremism and illegal migration.

Besides, it is China which is eating everyone's lunch today and automation will actually end up moving jobs not to India or to China, but back to the West.

kapilrdave
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Re: Pakistani Economic Stress Watch

Postby kapilrdave » 11 Sep 2017 20:22

Automation still requires labor. Besides, it is inevitable.
My last on OT.

Bart S
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Re: Pakistani Economic Stress Watch

Postby Bart S » 11 Sep 2017 21:45

kapilrdave wrote:Automation still requires labor. Besides, it is inevitable.
My last on OT.


Spot on, the only way to succeed with automation is to be the first mover. Trying to stall it is like commies in all their wisdom trying to stall computerization in the 70s.

Also, BD's success IIRC at least when compared with India in textiles is because they are granted some favorable import terms/quotas by US/EU that for some reason India is denied. Pakistan has the same market access but manages to fail at anything except Jihad.

Falijee
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Re: Pakistani Economic Stress Watch

Postby Falijee » 12 Sep 2017 06:12

Non-Performing Loans Rise by Rs 60 Billion in Q2 FY 16-17

The figure of fresh non-performing loans (NPL) has increased by Rs. 60 billion. The agriculture sector provides the bulk of the fresh NPLs.
This was stated in State Bank of Pakistan’s (SBP) 2nd quarter review of Financial Year 2016-17.

Looking forward for the "other sectors" ( manufacturing, exports, tourism, banking ) to contribute "their share" to increase the NPL statistics :twisted:

chetak
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Re: Pakistani Economic Stress Watch

Postby chetak » 12 Sep 2017 06:49

eklavya wrote:


It's even worse than it looks for Pakistan as their currency is about 20% over-valued against the USD.

Despite the low oil price, Pakistan is running a huge current account deficit, and is perpetually on the verge of default of its foreign currency borrowings. If / when the oil price picks up, Pakistan's economy will implode.

Bangladesh has also benefitted from "exporting" what some reports suggest are 20 million of its citizens to India (that's almost 15% of its current population). I see a thread about 50,000 Rohingyas (basically bengalis living in Burma for centuries as far as I can tell) in India; what about the other 20 million!

Bangladesh has also benefitted from pro development policies and not wasting resources on its military. Some of its social indicators are actually ahead of India too.


what rubbish!!

there is not a single bangladeshi in India and the bangladesh PM herself has said this on occasion and she will not lie.

it's a vile ploy to malign bangladesh.

in the end, you will all realize that more damage will be done to India by the bengali muslim rather than the panjabi muslim.

the beedis in such large numbers have piggybacked on to the Indian economy and just see how much they are sending back home by way of remittances.

old data but still illustrative

Yet, recent World Bank data (Bilateral Remittance Matrix, 2014) show, of the $7.6 billion of outward remittances from India, 54 per cent or $4.16 billion was to Bangladesh alone in that year. Almost every year, 50-55 per cent of India’s total outward remittances are to Bangladesh.

anupmisra
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Re: Pakistani Economic Stress Watch

Postby anupmisra » 12 Sep 2017 17:59

Pakistan seeks multi-billion dollar loans from China-based AIIB for uplift projects

Pakistan has tabled lists of development projects for seeking multi-billion dollars loans from Asian Infrastructure Investment Bank (AIIB) including for infrastructure, hydropower and installing smart meters in Pakistan.
AIIB Vice President stated that Pakistan has been an active member of the Bank No $hit!?
Pakistan required total investment to the tune of $ 55 billion for complete overhauling of transmission and distribution system of cash-bleeding power sector in Pakistan. :eek:


Wha...!? Why would a bank lend to a sector which just admitted that it is "bleeding cash"? That idiot official should be fired for letting out state secrets.

https://www.thenews.com.pk/print/229221 ... t-projects

kancha
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Re: Pakistani Economic Stress Watch

Postby kancha » 13 Sep 2017 10:12


anupmisra
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Re: Pakistani Economic Stress Watch

Postby anupmisra » 13 Sep 2017 17:51

Country will be forced to re-enter IMF plan: PTI

Portray­ing a bleak picture of the economy, the Pakistan Tehreek-i-Insaf (PTI)’s financial wizard Asad Umar has warned that “due to mismanagement of the economy by the ruling party”, Pakistan will be forced to re-enter the IMF programme — on harsher terms — in 2018.
Mr Umar presented figures released by the State Bank of Pakistan that showed negative trends in all segments of economy with a serious increase in foreign and local debts, rise in indirect taxes and decline in direct taxes.


https://www.dawn.com/news/1357368/count ... f-plan-pti

But...but...but...the baki leaderans said this a year ago:

Pakistan does not need IMF support anymore, claims Ishaq Dar

“Pakistan will soon stop looking towards IMF for assistance. The last session with IMF is underway right now,” said the finance minister.
We will not go to IMF for assistance, Dar added.
He went on to say that by 2050 Pakistan will become the 18th biggest economic nation across the world.


https://www.dawn.com/news/1274681

Bart S
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Re: Pakistani Economic Stress Watch

Postby Bart S » 13 Sep 2017 18:01

Not sure why Pakis are worried about IMF plan. It's not like they have stuck to any commitments or followed the IMF plan in the past. They have literally been running on IMF/American largesse without any checks and balances, unlike the strict terms that countries like Argentina and Venezuela etc were forced to adhere to.

Peregrine
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Pakistani Economic Stress Watch

Postby Peregrine » 17 Sep 2017 16:10

X Posted on the STFUP Thread

Pakistan saves $4bln in loan repayments on yen strength

ISLAMABAD: Pakistan managed to save at least three billion dollars in loan repayments to Japan during the past four years as rise in Japanese yen value against dollar turned out to be a blessing in disguise for the south Asian economy faced with widening current account deficit, officials said on Saturday.

“Fluctuation of yen against dollar helped Pakistan in getting benefits of three to four billion dollars in loan repayments,” an official said.

Yen’s value reached to one and half year high of 111 to one dollar and edged up nearly nine percent on foreign exchange markets last year, the highest among 10 industrial nations.

The Japanese government, however, is wallowing to keep yen under control to wake up its snoozing inflation.

Officials said Pakistan received around $35 billion as external loans during the last fiscal year of 2015/16 to meet its financing needs of $30 billion.

Currently, the total loan assistance from the Japanese government stands at $960 million and the grant at $156m.

Officials said the country’s current account deficit amounted to $20 billion in the last four years. The main surge sprang in FY2017 when current account deficit peaked to $12.2 billion, equal to four percent of GDP, from eight billion during three years.

Analysts were anticipating a widening current account deficit for 2016/17 due to higher imports on more than $50 billion China-Pakistan Economic Corridor projects (CPEC) and recovery in international oil prices as well as sluggish remittance inflows and subdued exports.

Imports rose 18.67 percent to $53 billion in FY2017, while export fell to $20.448 billion during the period.

Export sector, however, started to show recovery. Exports grew 13.2 percent in the first three months of the current fiscal year, a good omen for the fragile external sector and the economy that posted a decade-high growth of 5.3 percent in FY2017.

The officials said foreign exchange reserves climbed to $16 billion in the last four years from six billion dollars earlier.

Analysts, however, said the Stat Bank of Pakistan’s foreign exchange reserves almost reached to the level of FY2015 after touching nearly $19 billion last year.

SBP’s data showed that its existing reserves are hovering around 14 to 15 billion dollars. They stood at 13.53 $ billion by June-end of 2015.

Topline Research, in a report, forecast that current account deficit is likely to reach $16.39 billion in FY2018. In the following years, the deficit is, however, likely to slid at $14.73 billion in FY2019 and $13.52 billion in FY2020.

“We expect the current account deficit to be in the range of 5 to 5.5 percent of GDP in FY2018, (which) may result in further depletion of SBP’s FX reserves by $3 billion to $13 billion – below 3-month of import cover,” Saad Hashemy, director research at Topline Securities said. “We estimate that funding gap of $10 to 11 billion for FY2018 will likely be arranged from World Bank/Asian Development Bank and dollar bonds/sukuks,”

Hashemy said short-term debt is a temporary measure and is not sustainable.

“The government after elections in FY19 will need to take strict measures, including rupee devaluation, hike in interest rates, duties on non-essential imports and incentives for exporters,” he added.

Cheers Image

arun
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Re: Pakistani Economic Stress Watch

Postby arun » 22 Sep 2017 15:57

arun wrote:A real Honour and Dignity aka H&D nightmare for the Mohammadden Terrorism fomenting Islamic Republic of Pakistan.

Bangladesh which separated from the Mohammadden Terrorism fomenting Islamic Republic of Pakistan in 1971 with our help overtakes the Islamic Republic in per capita GDP at Market Exchange Rates per the Economist:

Bangladesh’s GDP per person is now higher than Pakistan’s
At market exchanges rates, at least

Print edition | Asia
Sep 7th 2017

WHEN Bangladesh won independence from Pakistan in 1971, it was much poorer than the country it left. Industry accounted for only 6-7% of its GDP, compared with over 20% in Pakistan. The battle for independence had killed or displaced millions, damaged roads and railways, and severed ties with Pakistan’s bankers and industrialists (including the owner of one of the world’s biggest jute mills). Even before the war, Bangladesh had been trampled by another apocalyptic horseman: a cyclone killed hundreds of thousands in 1970. The country’s independence leader, Sheikh Mujibur Rahman, complained that West Pakistan had not promptly shared its bumper wheat crop or “given a yard of cloth for our shrouds”.

Last month revealed a remarkable turnaround. Bangladesh’s GDP per person is now higher than Pakistan’s. Converted into dollars at market exchange rates, it was $1,538 in the past fiscal year (which ended on June 30th). Pakistan’s was about $1,470.

Strange as it may sound, Bangladesh jumped ahead because of an advance in Pakistan. On August 25th Pakistan released the results of its census, updating earlier population estimates. They showed that the country has 207.8m people, more than 9m more than previously thought. It may now have the fifth biggest population in the world, surpassing Brazil’s. But the new count also lopped 4-5% off Pakistan’s GDP per person, the arithmetic consequence of revealing so many more people.

A caveat should be noted. A dollar stretches further in Pakistan than in Bangladesh because prices in the former tend to be lower. So Pakistan’s $1,470 per person actually has more purchasing power than Bangladesh’s $1,538.

This is nonetheless a good moment to celebrate Bangladesh’s economic progress. Its annual growth has averaged more than 6% over the past ten years and has run above 7% over the past two. Industry accounts for 29% of its GDP. A country that once lacked cloth for shrouds now exports more ready-made garments than India and Pakistan combined. Working conditions are still far worse than they should be. They are also far better than they once were.

Bangladesh’s GDP per person received a boost from another source. Its last census, in 2011, led to a large revision of the country’s population, larger even than Pakistan’s. But in Bangladesh’s case, the revision was downwards.


The Economist:

Bangladesh’s GDP per person is now higher than Pakistan’s : At market exchanges rates, at least


Finally someone in the Mohammadden Terrorism fomenting Islamic Republic of Pakistan gathers the courage to write about the Honour and Dignity aka H&D demolishing news item in the Economist of Bangladesh which separated from the Islamic Republic in 1971 with our help, overtakeing the Islamic Republic in terms of per capita GDP at Market Exchange Rates:

Op Ed in Express Tribune by Pervez Tahir who formerly was Chief Economist of the Planning Commission of the Mohammadden Terrorism fomenting Islamic Republic of Pakistan:

When East overtakes West
By Dr Pervez TahirPublished: September 22, 2017

While the budget speech claims that Pakistan will be among the 20 largest economies by 2030 and the Vision 2025 sees the country in the list of 10 largest economies by 2047, a recent article, “East overtakes West,” in The Economist has thrown a spanner in the works. The east is the erstwhile East Pakistan and the west is today’s Pakistan. It shows that the GDP per capita of Bangladesh is $1,538 and that of Pakistan lags behind at $1,470. This is the result of a GDP growth rate of over six per cent per annum in the past 12 years. One-third of the GDP is contributed by industry and the value-added garments exports are larger than India and Pakistan put together.

The dominant sentiment in the west was optimistic. Most investment and foreign aid utilisation had taken place in the west. Growth as well as income per capita had been consistently higher than the east. Land-man ratio was far better. The east, in short, was a demographic, climatic and economic liability. Shahid Javed Burki (Pakistan Economic and Social Review, June 1972) went further. His optimism was not just based on the “statistical improvement brought about by the severance from the economy of the poor region of East Pakistan,” but on the assessment of economic potential. He estimated that there was a net transfer of public and private resources from west to east of the order of 2.3 per cent of its GDP. The productive use of these resources would raise the already high rate of investment. Quoted by Burki, The Economist took a pessimistic view in April 1972, stating that “sales to the east before the break-up were rising faster than exports and the loss of east has already led to setbacks in the production of cotton yarn and fabrics, cigarettes and certain chemicals. To divert these goods to the world markets will require an upgrading of quality (eg in cotton textiles), even if markets can be found at all. Equipment would need to be imported (for which foreign exchange may be lacking), because of Pakistan’s high cost structure, subsidies may be needed.”

As economic developments have unfolded since 1972, The Economist has the last laugh. The most contentious issue of the day was the inter-wing disparity of income per capita. Economists from the east would explain it in terms of the net transfer from east to west and offer a two-economy model as a solution. The recent reversal of the disparity adds substance to their case. In an opinion piece for The Pakistan Times before the formation of Bangladesh, I had argued that “Pakistan is a case of two brothers minding their own business most of the time and each other’s some of the time.” It is, however, not just that Bangladesh is now on its own. There are some other factors in east overtaking west. First, Bengalis in the east used to be stereotyped in the west as interested in nothing but procreation to produce a crop of agitators. In 1970, the population was 65 million in the east and 58 million in the west. By 1987, the situation had reversed, and the census 2017 estimates population of Pakistan at 207.8 million against Bangladesh’s 164.8 million. The addition to Pakistan’s population since 1970 is only a few million less than the total population of Bangladesh. Second, military expenditure as a percentage of the GDP in Bangladesh has been just over one per cent compared to over three per cent in Pakistan. Third, and related to the first two, Pakistan is among the top 20 scorers on the Global Conflict Risk Index. Bangladesh does not even make the list.


From here:

When East overtakes West


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