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Current Account Records A Huge Surplus of Over $800 Million in July-Aug 2020

Syed1.

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I think people and selectors have already learn there lessons in the last 2 years .Agar koi kasar hai tu koi bat nahi the circus is still on
17 million people voted for PTI highest in Pakistan's history.


You can continue doing sajda infront of Nawaz Sharif it won't change the fact that Pakistanis kicked out your god and his party.
 

WaLeEdK2

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17 million people voted for PTI highest in Pakistan's history.


You can continue doing sajda infront of Nawaz Sharif it won't change the fact that Pakistanis kicked out your god and his party.
Don’t know how true this is but there has already been PMLN MPAs doing some introspection. Ashraf ansari was a PMLN mpa that got kicked out yesterday and revels cracks in the party.
 

volatile

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well, the maths is pretty simple..
just tell me why did Pakistani establishment & imran khan, begged and literally ****** in front arabs & chinese to get 30 billion dollars (15 billion in cash, 6 billion oil receipts, 9 billion in mulitdonars)


the 30 billion cash was used to pay for 24 billion projected CAD & building another 9-10 billion reserves

this was when nawaz sharif did some adjustment in hi slast 3 months, imagine if he hadnt..

the net result of this begging is that you saw the "tabhee" and infaltion and rupee dropping to 165 from 120s..


now what would have happened without us begging, well look at Afghanistan, lebanon, zimbabwae, venze , argentia and numerous other countries that bankrupted, usually you see currency drop of 500%-1000% with banks inability to pay money

if this much simple concept doesnt get to people, then they deserve to be ***, most of foreign based overseas pakistanis will be fine and some of their relatives will be fien as they will send back money in dollars..just people like you will be fucked, while nawaz sharif will simply board a plan and stay the night in mayfair
Wrong analogy it has been debated several times .Rest is upto you what ever you think
 

ziaulislam

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Wrong analogy it has been debated several times .Rest is upto you what ever you think
what has been debated several times?
external deficit has word external in it, unlss ou have a magic way to print dollar notes..please share it with us
 

volatile

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what has been debated several times?
external deficit has word external in it, unlss ou have a magic way to print dollar notes..please share it with us
Dear you cant see things in isolation every thing is connected with every thing . e.g Lmonth Exports fallen .did you see any one debating on that our exports will continue to be in a range of 1.6 Billion US$ to 2.2 Billion US$ per month .Is this to be celebrated ? Also we were exporting @100 Rs a dollar around 22-24 Billion US$ now we are doing the same at 167 Rs/Dollar .Does this add up ? our GDP has lost closed to 40 Billion US$ errorded in 2 years so this is all linked lets hope the things improved but chances are less
 

ziaulislam

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Dear you cant see things in isolation every thing is connected with every thing . e.g Lmonth Exports fallen .did you see any one debating on that our exports will continue to be in a range of 1.6 Billion US$ to 2.2 Billion US$ per month .Is this to be celebrated ? Also we were exporting @100 Rs a dollar around 22-24 Billion US$ now we are doing the same at 167 Rs/Dollar .Does this add up ? our GDP has lost closed to 40 Billion US$ errorded in 2 years so this is all linked lets hope the things improved but chances are less
1. Pandemic means low exports every one knows this
2. GDP hasnot lost anything PLEASE STOP COUNTING GDP IN NOMINAL.(nominal loss will be overcome by higher inflation)
PLEASE count GDP in purchasing power..this is basic 101..
By your logic if u have 20% inflation and -10% growth ur gdp growth was 10%...NO doesnt work that way
3. Key structural issues like lack of confidence in state bank, costly raw material and utilies and very low savings & thus low capital and investment (due to note printing, unfavorable power deals, artifical low interst rates and govt over spending done by previous govt) will be a challenge
U still didnt answer what was your magical way to arrnage for 24b$ for external fianancing
 

TacOps

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Does anyone know how much of external debt service was scheduled to be paid in July and August but was deferred under the moratorium granted by G20? That could be a swing factor here.
 

Patriot forever

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Good post. What in your opinion is the reason for Pakistan's anaemic export performance historically and recently? Clearly there are some underlying issues. Thoughts?
People here suggest Pakistan somehow miraculously double it's exports to 45 billion from 22 billion to reduce it's current account deficit in a mere couple of years. That too if we look at the background that exports were stagnant for the previous 5 years, rupee was artificially overvalued that destroyed the competitiveness of our exports, the energy policy was completely based on imported fuel and sooner or later their price had to be increased which in turn would make our exports even less attractive. Our local market was denied to our own industries due to subsidized imports (overvalued rupee). There was no industrial base to begin with to propel our exports.
Pakistan did not have the luxury to wait for 5-10 and sustain that deficit. Even doors of multilateral lenders were shut because of our ratings and it was impossible to roll over our previous loan payments which were due. We were headed for definite bankruptcy.
The artificial growth you witnessed in Plmn was due to increase in imports at the expense of macroeconomic deterioration. The bubble was bound to burst.
 

Jungibaaz

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Good post. What in your opinion is the reason for Pakistan's anaemic export performance historically and recently? Clearly there are some underlying issues. Thoughts?
This is a huge topic, and most of the very important stuff is systemic and long lasting. For example, we can debate what a lack of land reforms has done to limit us and allow for a reinforcement loop of policies for continuity, weak institutions due to a lack of long term political stability, low literacy rate and poverty traps made worse due to other failings.

But if we limit the scope of these matters only to what’s relevant to this thread. Pakistan has a long established history of policies that cause or allow financial crises to develop and then once every few years we go to the IMF. This latest phase was largely the result of using of policy imbalances favouring imports and expenditure as a means to drive growth vs better competitiveness and export led growth. We artificially inflated PKR by using up SBP reserves (pegging), this means imports are cheaper and our already low value exports become less competitive, it’s also accompanied by strong internal demand. If this policy is used too much, you will burn through all fx reserves, and will invariably come knocking to the IMF and other multilateral lenders again. And the more of that debt you take on, the more interest payments are then needed to be paid out of the federal budget.

Basically, in previous years we were achieving 5-6% growth by using one sided policies that would cost us later on. Our economic growth at 5-6% can’t be sustained unless the current account deficit is reduced. Think of it like a car, you can go very very fast, but if your engine is not built for high performance, if your suspension and other parts cannot take the stress, and if you are achieving high speed by pushing the car to its limit. Something will eventually break. What’s needed is to improve the components and safely cruise at a higher speed (growth), rather than pushing a flimsy car to go faster than it is designed to go. There are others issues limiting our growth too. But this has been a major one in recent years.
 

AZADPAKISTAN2009

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Unless the figure reaches 100 billion we really should not bring up this topic again , because it is just a Yo Yo effect one moment the figures are up few months later they are down a bit

Real Progress is end of 4-5 years we got 100 billion surplus

And currency figures have dropped to 50 rupee for a dollar
 

Patriot forever

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This is a huge topic, and most of the very important stuff is systemic and long lasting. For example, we can debate what a lack of land reforms has done to limit us and allow for a reinforcement loop of policies for continuity, weak institutions due to a lack of long term political stability, low literacy rate and poverty traps made worse due to other failings.

But if we limit the scope of these matters only to what’s relevant to this thread. Pakistan has a long established history of policies that cause or allow financial crises to develop and then once every few years we go to the IMF. This latest phase was largely the result of using of policy imbalances favouring imports and expenditure as a means to drive growth vs better competitiveness and export led growth. We artificially inflated PKR by using up SBP reserves (pegging), this means imports are cheaper and our already low value exports become less competitive, it’s also accompanied by strong internal demand. If this policy is used too much, you will burn through all fx reserves, and will invariably come knocking to the IMF and other multilateral lenders again. And the more of that debt you take on, the more interest payments are then needed to be paid out of the federal budget.

Basically, in previous years we were achieving 5-6% growth by using one sided policies that would cost us later on. Our economic growth at 5-6% can’t be sustained unless the current account deficit is reduced. Think of it like a car, you can go very very fast, but if your engine is not built for high performance, if your suspension and other parts cannot take the stress, and if you are achieving high speed by pushing the car to its limit. Something will eventually break. What’s needed is to improve the components and safely cruise at a higher speed (growth), rather than pushing a flimsy car to go faster than it is designed to go. There are others issues limiting our growth too. But this has been a major one in recent years.
On point sir. First there is visible growth in export industry in terms of capacity and quantity on ground. Their revenue has significantly increased. They have more capital now to invest in expansion and to upgrade. APTMA announced a capital of 1 billion dollars recently.

The most important limiting factor is power sector. What has been done there will haunt us for at least a decade.
 

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