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2021-22: WB projects 2pc GDP growth

FOOLS_NIGHTMARE

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The World Bank has projected Pakistan’s GDP growth rate at 2 percent for 2021-22, saying that poverty is projected to remain high. The Bank in its latest report “Pakistan-macro poverty outlook” stated that the country’s economy was severely impacted by the COVID-19 shock in fiscal year 2020 leading to an increase in poverty. With the lifting of lockdown measures, the economy is showing signs of a fragile recovery. Growth is expected to gradually strengthen but remain muted in the medium term. Fiscal deficit and debt levels are projected to remain elevated but to gradually improve. Risks to the outlook include new waves of Covid-19 infections and delays in the implementation of critical structural reforms.

Pakistan’s output growth is expected to recover gradually over the medium-term, averaging 2.2 percent over fiscal year 2021-23, mostly due to contributions from private consumption. However, sectors that employ the poorest, such as agriculture, are expected to remain weak, and therefore poverty is likely to remain high.

The baseline outlook is predicated on the absence of significant infection flare-ups that would require more extensive lockdowns. The current account (C/A) deficit is projected to narrow to 0.8 percent of GDP in fiscal year 2021, as a wider trade deficit is more than offset by stronger remittances inflows. However, it is expected to increase over the medium term. Exports are projected to grow from fiscal year 2022 onwards, as external conditions become more conducive and tariff reforms gain traction, but imports are also expected to increase in line with stronger domestic activity and higher oil prices. While fiscal consolidation efforts are expected to resume, the deficit is projected to remain elevated at 8.3 percent of GDP in fiscal year 2021, partly due to the settlement of arrears in the power sector. As critical revenue-enhancing reforms gain pace and expenditure rationalization efforts resume, the fiscal deficit is projected to gradually narrow over the medium-term. Still, public debt will remain elevated in the medium term, as will Pakistan’s exposure to debt-related shocks.

The report further noted that Pakistan’s economy has been growing slowly over the past two decades. Annual per capita growth has averaged only 2 percent, less than half of the South Asia average, partly due to inconsistent macroeconomic policies and an under reliance on investment and exports to drive economic growth. Short periods of rapid consumption-fueled growth frequently led to sizable current account and fiscal deficits that ultimately required policy tightening, resulting in recurrent boom-bust cycles.

In early fiscal year 2020, which runs from July 2019 to June 2020, following one such episode of external and fiscal imbalances, the country entered a 39-month IMF Extended Fund Facility. The associated adjustment measures, including fiscal consolidation, contributed to a reduction of the imbalances over the year and improved macroeconomic stability. However, the containment measures adopted in response to the COVID-19 pandemic led to a collapse in economic activity during the final quarter of FY20. As a result, GDP growth is estimated to have contracted by 1.5 percent in FY20. Half of the working population saw either job or income losses, with informal and low-skilled workers employed in elementary occupations facing the strongest contraction in employment. As a result, poverty incidence is estimated to have increased in FY20 from 4.4 to 5.4 percent, using the international poverty line of $1.90 PPP 2011 per day, with more than two million people falling below this poverty line. Moreover, 40 percent of households suffered from moderate to severe food insecurity. The government, therefore, focused on mitigating the adverse socioeconomic effects of the pandemic, and the IMF program was temporarily put on hold.

Major risks to the outlook include the possibility of new waves of infections, the emergence of new vaccine-resistant strains, and setbacks in mass vaccinations. In addition, more delays in the implementation of critical structural reforms could lead to further fiscal and macroeconomic imbalances.

 

hydrabadi_arab

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They know we are Con Artists and masters of Spin Doctoring. It will be very interesting to see what figures the IMF and ADB will give. This is what the WB released yesterday.
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WB can project all they want. That doesn't change anything. IMF too will update their projections and numbers with time. But I see that WB doesn't even bother to do that. Like in 2017-18 actual growth rate was 5.5% and they still have written 5.8% which was estimate.
 

Mig hunter

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They know we are Con Artists and masters of Spin Doctoring. It will be very interesting to see what figures the IMF and ADB give. This is what the WB released yesterday.
View attachment 754516
Yeah at the same time they are projecting Indian growth upto 7% where the economy has contracted more than 7% and COVID is ravaging the whole country,just because India is the stoog of west. So cut this crap by degrading own country and trusting the masters of deceipts..
 

FOOLS_NIGHTMARE

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Yeah at the same time they are projecting Indian growth upto 7%
In fact they are saying 8.3% lol. If the global financial institutions that are the benchmark are fake, then I am afraid they are the ones that lend us the money. Either we believe them or stay away from them.
.
 

Patriot forever

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They know we are Con Artists and masters of Spin Doctoring. It will be very interesting to see what figures the IMF and ADB give. This is what the WB released yesterday.
View attachment 754516
Bro the problem with you guys is you are horrendously uneducated, how can we even expect a debate when a person does not know that 'e' donates expected, 'f' stands for forecast.

Man i am loving it how the actual figures have got all trolls balls in their mouth. 😂
 

FOOLS_NIGHTMARE

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Bro the problem with you guys is you are horrendously uneducated, how can we even expect a debate when a person does not know that 'e' donates expected, 'f' stands for forecast.
Well for the last three years the present GOVT had no issues with their Es and Fs Mr ARASTO sahib, what's the problem now! The problem in my opinion is that no one will accept the fudged 4% GDP growth figure. This includes the Awaam, the opposition and the credible Financial Institutions and Houses. Take a chill pill Adios Amigos time for Friday prayers.
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Patriot forever

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Well for the last three years the present GOVT had no issues with their Es and Fs Mr ARASTO sahib, what's the problem now! The problem in my opinion is that no one will accept the fudged 4% GDP growth figure. This includes the Awaam, the opposition and the credible Financial Institutions and Houses. Take a chill pill Adios Amigos time for Friday prayers.
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No need to get hyper sir jee, everyone relevant has not only accepted the growth figure but have projected the final numbers to exceed 4% comfortably. Even the irrelevant people like your ex finance minister or your ex punjab finance minister husband have accepted facts.

My only request is even in trolling one needs to have a basic command of subject, illiterate opinions does not serve any purpose.

Jumma Mubarak 😊
 

Hareeb

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I wonder how do these financial institutions collect data w.r.t Pakistan where a big chunk of economy is undocumented, and their projections have always got wrong due this shadow economy. Sometimes, it makes me think they are mere political tools in case of Pakistan.

Secondly, if projections by these institutions and rating agencies were so reliable, financial crisis of 2007-2008 would not have happened.
 

ziaulislam

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They know we are Con Artists and masters of Spin Doctoring. It will be very interesting to see what figures the IMF and ADB give. This is what the WB released yesterday.
View attachment 754516
WB AB IMF depend upon govt figures
Unless they completely think govt is lying..
In that case they will suspend funding
Otherwise they will agree with official figures
I guess Moodys is also lying when they project our current FY growth at 4.5%. These figures are based on old data as GOP has not released figure for current FY.
Growth figures come from govt data

2021-22 will be very tough as we are coming from high base
Acheiveing 5% will be miracle
 

hydrabadi_arab

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Well every financial institution was quoting 5.8%, except certain media cells who claimed them as fudged figures.
You need to learn difference between actual growth and estimate. For example actual growth rate of FY2020-21 will not come till the end of this year. Its expected that actual growth rate will be closer to 4.5% if LSM growth hold up in June as well instead of projected 3.94%. Meanwhile 5.8% figure was estimate, and when actual results came it was 5.5%.
 

FOOLS_NIGHTMARE

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No need to get hyper sir jee, everyone relevant has not only accepted the growth figure but have projected the final numbers to exceed 4% comfortably.
Leading Pakistan economists doubtful over country's 3.94 per cent GDP rate
Pakistan's leading economists have expressed their doubts over the provisional estimate of 3.94 per cent GDP growth rate in the country and said it negates Imran Khan-led government's own estimate of 2.9 pc GDP growth approved by the federal cabinet last month.

In April, the federal cabinet approved the medium-term budget strategy paper and shared it with the International Monetary Fund (IMF). In this paper, the government estimated 2.9 pc GDP growth for ongoing fiscal year.

"But now, all of sudden within a couple of weeks, how it has jumped to 3.94 pc," wonders former Finance Minister Dr Hafeez Pasha.

"The State Bank of Pakistan's estimate ranged between 2.8 pc and 3 pc while the estimates of the IMF and the World Bank stood at about 2 pc and 1.5 pc, respectively," he said.

Prime Minister Imran Khan in a tweet on May 21 termed 3.94 pc GDP growth as estimated by the NAC a success of his government's economic policies while it had managed to control COVID-19 pandemic. "Our V-shaped recovery is balanced between 3 major sectors: agriculture, industry & services," read PM Khan's tweet, reported Dawn.

It further continues to report that Dawn, Dr Sajid Amin Javaid, research fellow and the chief of the Sustainable Development Policy Institute's Policy Solution Lab, said even if low base effect was taken into account, the GDP growth estimate of 3.94 pc had taken experts by surprise.

"It is almost double than highest forecast of 2 pc of the IMF, revised from initial forecast of 1.5 pc. While there were some discussions on slightly higher growth rate than the IMF forecast, mainly because of good agriculture production with some bumper crops, the expectations were anywhere between 2 pc and 2.5pc at the maximum. I think not much has changed in manufacturing and other sectors since the IMF revised its estimates. On the other hand, we have had third wave the pandemic forcing limited economic activity once again," he explained.

While discussing how realistic is this number, he said an objective assessment depended on access to information as to how this number was reached and what data was used. "And how is this data different from the data given to or collected by the IMF? What has so markedly changed since April 2021 that the IMF has missed to foresee? How the assumptions and projections for last quarter data vary between IMF and National Account Committee estimates? What are the proxy variables used for missing data? Definitely there are some surprises in sectoral estimates as well."

Overall, he said, the figure seemed to be overestimated when compared with current trends in the economy and available information. "I think the number will be revised substantially downward later on. To me, the revised growth rate is most likely to be somewhere between 2 pc and 2.5 pc," he claimed.

"The GDP growth was revised downward to 1.9 pc from the earlier 3.3 pc in fiscal year 2019. Every government has the tendency to come up with highest possible growth rate initially to show its performance. People generally ignore the revised estimate. I think the same practice is in play here," he said.

Naved Ahmad also termed 3.94 pc GDP growth estimate unrealistic, saying it should have been 3.5 pc. "It is my feeling that 3.5 pc GDP growth would have been a more realistic figure."

Economist Pervaiz Tahir also termed 3.94pc growth rate unrealistic and said independent operation of the Pakistan Bureau of Statistics (PBS) was the only way forward to get a transparent projection of the growth.

He said if growth in various sectors, agriculture, industrial etc, was admitted, there should have been about 3 pc growth rate. "But it jumped to around 4pc and I think one per cent has been added forcibly," he said.
 

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