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Growth back on track..1.5% FY21,4.4%FY 22 MOODY

ziaulislam

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My take

Will pakistan solve major threats to instability
I.e circular debt and power shortage

How will govt achieve growth without massive unbacked spending without causing CAD crisis

I expect growth to be higher around 2.5% for this year as first two quarters were lower due to covid
 

TheSnakeEatingMarkhur

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My take

Will pakistan solve major threats to instability
I.e circular debt and power shortage

How will govt achieve growth without massive unbacked spending without causing CAD crisis

I expect growth to be higher around 2.5% for this year as first two quarters were lower due to covid
@Death Adder
 

ziaulislam

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So CAD numbers will not be reported I believe now...since this growth is not possible without having deficits
They have always been reported..check sbp and news articles back from 2016
By 2017 the stock market crashed already as it saw govt had no plans no fix it rather the govt plan was to intentinal bankrupt the country to punish the army

Where were u sleeping ?????

On this forum i was cursing the govt in 2016 due to CAD and everyone laughed

If the govt starts printing notes to fuel growth and if CAD goes beyond 2-3% i will start doing it again

It hit 8% during last year of PMLN
currently it surplus

A 4-5% SUSTAINABLE GROWTH IS 100X BETTER THAN A 6-8% BOOM BURST CYCLE NOT THAT PMLN ACHEIVED EVEN THAT
 

Chakar The Great

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They have always been reported..check sbp and news articles back from 2016
By 2017 the stock market crashed already as it saw govt had no plans no fix it rather the govt plan was to intentinal bankrupt the country to punish the army

Where were u sleeping ?????

On this forum i was cursing the govt in 2016 due to CAD and everyone laughed

If the govt starts printing notes to fuel growth and if CAD goes beyond 2-3% i will start doing it again

It hit 8% during last year of PMLN
currently it surplus

A 4-5% SUSTAINABLE GROWTH IS 100X BETTER THAN A 6-8% BOOM BURST CYCLE NOT THAT PMLN ACHEIVED EVEN THAT

You are an expert on economy, do you think things are heading in the right direction? You do understand that there would always be some CAD given our poor export base.
 

Syed1.

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Every month the Min of Finance issues a Monthly Economic Indicator and for every month this fiscal year it has stayed near or around 4%. Don't believe me here have a look yourself:


For your understanding I drew a red line from the 4% growth number and except for August every month is above 4%. August saw a decline mainly due to devastating rains brought Karachi to a standstill. The yellow line shows start of fiscal year.

MEI.PNG



Some renowned economists are also predicting it:

 

ziaulislam

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You are an expert on economy, do you think things are heading in the right direction? You do understand that there would always be some CAD given our poor export base.
A negative CAD of 1-2% will never be an issue in growing economy
Problem occurs when it growns beyond 3%
It was at 8% in 2018, currently surplus

With 5% growth in exports (with very strong performance in new areas like IT pharma) and double digit growth in remittances i think pakistan will maintian a CAD within 1-2%

I expect govt to achieve 5% growth in final yr if it doesnt do major blunders and we dont see any major global crisis and if it resolves the energy sector issues
Every month the Min of Finance issues a Monthly Economic Indicator and for every month this fiscal year it has stayed near or around 4%. Don't believe me here have a look yourself:


For your understanding I drew a red line from the 4% growth number and except for August every month is above 4%. August saw a decline mainly due to devastating rains brought Karachi to a standstill. The yellow line shows start of fiscal year.

View attachment 706768


Some renowned economists are also predicting it:

2.5% is conservative estimate it can go up
You will see soon IMF WB AB revising its growth to 2.5.

But this is fragile ..any law & order situation or global crisis can destroy this momentum

Thr biggest threat is energy crisis
The govt has to move quickly to get it LNG ,IPPs, circular debt issues sorted out
 
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Patriot forever

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My take

Will pakistan solve major threats to instability
I.e circular debt and power shortage

How will govt achieve growth without massive unbacked spending without causing CAD crisis

I expect growth to be higher around 2.5% for this year as first two quarters were lower due to covid
Yes the growth will be higher than official projection. The SBP already updated its projection last month in Nov to 1.5-2.5% from previous 2.1% growth ( LSM was expected to be -ve 1% to 2%). IMO now that the LSM has recorded a growth of 7.4% in the first 5 months, we can easily surpass the projected growth and SBP will again update in the near future.

There are a lot of other ways to accelerate growth by incentivizing private sector where a lot of work is being done. Construction industry, expansion in industrial base, private sector projects.
Fiscal deficit stands at 1.8% for the first 5 months which is not that bad (Mostly due to increase in debt payment), government target is around 7.5% but in my opinion it will not exceed the target. We should settle at moderate growth instead of extra spending because with injection comes inflation unless it can be countered preferably local instead of import based.
 

ziaulislam

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Yes the growth will be higher than official projection. The SBP already updated its projection last month in Nov to 1.5-2.5% from previous 2.1% growth ( LSM was expected to be -ve 1% to 2%). IMO now that the LSM has recorded a growth of 7.4% in the first 5 months, we can easily surpass the projected growth and SBP will again update in the near future.

There are a lot of other ways to accelerate growth by incentivizing private sector where a lot of work is being done. Construction industry, expansion in industrial base, private sector projects.
Fiscal deficit stands at 1.8% for the first 5 months which is not that bad (Mostly due to increase in debt payment), government target is around 7.5% but in my opinion it will not exceed the target. We should settle at moderate growth instead of extra spending because with injection comes inflation unless it can be countered preferably local instead of import based.
bigge rissue is uncertianty around power sector..you cannot run the economy with such a big uncertianty

if the power sector is sorted out the uncertianty will be lifted and you wills ee hige invetsment in manufatcuring

uncertianty around
1. Gas
2. electricty cost
3. circular debt
4. oil supply


there are numerous issues that need sorting out..

i think if govt does two things it will tackle the bulk of problems

1. reneg with IPPs to bring electricity cost low and start privatization of distribution companies
2. IP gas pipeline, LNG gas pipelien and allowing private sector to fully invest in gas

so far i haven't heard any movement on IP gas pipeline, i hope as soon as sanctions are lifted this year it can be built within 18 months

1.2 BCF of IP gas will basically curtail all the shortage. key is what price do we get
 

Patriot forever

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bigge rissue is uncertianty around power sector..you cannot run the economy with such a big uncertianty

if the power sector is sorted out the uncertianty will be lifted and you wills ee hige invetsment in manufatcuring

uncertianty around
1. Gas
2. electricty cost
3. circular debt
4. oil supply


there are numerous issues that need sorting out..

i think if govt does two things it will tackle the bulk of problems

1. reneg with IPPs to bring electricity cost low and start privatization of distribution companies
2. IP gas pipeline, LNG gas pipelien and allowing private sector to fully invest in gas

so far i haven't heard any movement on IP gas pipeline, i hope as soon as sanctions are lifted this year it can be built within 18 months

1.2 BCF of IP gas will basically curtail all the shortage. key is what price do we get
Completely agree, sorting out these issues is crucial but will take time. In addition there are a lot of short term challenges that government will have to manoeuvre around this FY, to maintain the growth momentum.

Brent crude has hit almost 57$, price hike is inevitable. Ogra is suggesting a double digit price increase, cutting in on tax will reduce revenue, let's see how much hit the government takes in terms of tax revenue and how much is transferred to public. Will cause increase in transportation cost for exporters/industries. Can increase inflation.

Containers are almost 4 times more expensive due to global shortage, will effect our exports.

LNG spot prices are going crazy, people were saying we got expensive cargoes but current rates for Feb make it look like a bargain. Let's see what rates we get for March when bids are submitted on 15th.
 

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