• Tuesday, March 31, 2020

Pakistan’s current account deficit shrinks massive 73% in July

Discussion in 'Pakistan Economy' started by خره مينه لګته وي, Aug 21, 2019.

  1. Yaseen1

    Yaseen1 SENIOR MEMBER

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    If our reserves increased by same percentage by which current account deficit decrease or atleast 30 to 50 percent of this rate then I appreciate govt performance but reserves are not rising much unfortunately.Germany has high gdp and reserves but our case is opposite and that is why I not gave its example
     
  2. Flight of falcon

    Flight of falcon FULL MEMBER

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    Reserves can only increase when you have some spare money left. Right now we are struggling to simply bring this deficit under control. Building up reserves will be the third phase after paying off expensive high interest loans in the second phase .
     
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  3. Norwegian

    Norwegian BANNED

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    In order to raise reserves without taking more debt, imports need to be cut to 20 billion dollars. Not likely to happen

    Exactly. Patwaris can't even do basic math
     
  4. Yaseen1

    Yaseen1 SENIOR MEMBER

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    Then why govt is taking debt,govt has increased tax so reserves should show growth with decline in imports
     
  5. Norwegian

    Norwegian BANNED

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    Tax money is shown in internal account currency that is Rs. It has nothing to do with external account that is shown in dollars.
     
  6. Yaseen1

    Yaseen1 SENIOR MEMBER

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    When govt has much rupees from taxes they are actually getting more rupees without printing more notes and can buy more dollars by using rupees without causing much devaluation of rupees as supply of money is controlled
     
  7. Armchair

    Armchair FULL MEMBER

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    The clear bad guy in this is the import of goods. If luxury and unnecessary imported items are blocked, we will overnight go into a surplus.
     
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  8. pkuser2k12

    pkuser2k12 SENIOR MEMBER

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    Pakistan has re payed 9.5 billion dollars for the year 2018-2019 highest loan repayment by any government if I am not mistaken. rserves increase will take time
     
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  9. Norwegian

    Norwegian BANNED

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    That is not how it works lol. Govt can't just buy dollars with Rs in its reserves.
     
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  10. Yaseen1

    Yaseen1 SENIOR MEMBER

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    I think govt should start collecting taxes from importers and exporters in dollars instead of rupees to deal with this issue
     
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  11. cricketrulez

    cricketrulez FULL MEMBER

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    I'm flummoxed that you actually had to say that.
     
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  12. Flight of falcon

    Flight of falcon FULL MEMBER

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    Or be a Patwari... buy dollars from international market on high interest and make your rupee look stable and then have no way to pay back the loan .
     
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  13. Norwegian

    Norwegian BANNED

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    Patwarism is all about the gimmicks.
     
  14. crankthatskunk

    crankthatskunk SENIOR MEMBER

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    There is also a word call stability. When you don't have enough resources to plug the gaps, trade deficit and current account deficit are killers.

    In case of Pakistan, it is devastating, because we have to borrow to plug the gap. Borrowing due to meager resources is becoming harder and harder and tougher and tougher. As you may have noticed, IMF put hurdles, conditions, which results increase in commodities prices, causing hard aches to the poorest in the country.
    No way current account deficit is a good thing for Pakistan in current situation.
    If you notice even though it says that the deficit stands just over $ 500 million. But if the graph has something to go buy, it is almost wiped off.

    Imports $4.1 billion = Exports $ 2.2 billion + Remittances $ 2 billion. This means the account stands a little bit in positive according to the figures in the graph.
     
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  15. Type59

    Type59 FULL MEMBER

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    After blocking imports from India. The deficit should fall further. Remember this data is before article 370 decision.
     
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