4.14pc GDP growth recorded, highest since 2008-09

[Cyberian]

This is a really good news.

 

[farhan_9909]

IMF/WB will revise it to 4.14% within few months.I am following both of them and both of them usually revise the past year growth rate after few months.

4.14% is not a bad start.But next year growth rate should be no less than 5%.

 

[ziaulislam]

IMF, in its WEO database projects upto 5 years ahead (2019 in april edition). There is a nice note at the end of time series stating from where the estimates start, For april version, the estimates start after 2013....And IMF's forecasts are significantly subjectively driven....


Growth and economic activity needs momentum or push....I said it right when Government was clearing the circular debt that given the state of economy, it needs a push. Clearing circular debt may be a temporary phenomenon but it would give the crucial push to economy to start growing. You can't do anything with a stagnant economy. No energy reforms can kick in unless government doesn't have resources and those resources can't be gathered unless economic activity isn't picking up.
Energy reforms require not only investment in distribution infrastructure but also political support from the provincial governments to help recover electricity dues. While the money is required for first one, it would come from no where but the economy. Secondly, how KPK and Sindh Governments have politicized the recovery, its also a sad fact....

you didnt get what i said, govt used the previous govt fiscal year to clear circular debt and came up with a new circular debt during its tenure...
what govt simply did different from PPPP was to allocate more gas and power to industries, nothing else..we didnt see any change in tax to gdp ratio(now its official same at 8.8%!), we didnt see any electrical reforms with same over 1.5% subsides in power...
so in reality govt didnt achieved much in its first year....
i will excuse the govt for the first three years but excuses cannot be given in taxation and electricty reforms(power theft)...govt has clearly failed in this regard...so if i give PPPP 4/10, i will give PML N at best 6/10..they didnt delivered...

attracting chinese with high return rate in coal at 30% isnt that difficult , it would have been great if they had attracted them at 15-20% return rate, now even for coal we will have to pay 10rs per unit instead of world average of 6-8rs (still better than 22 rs oil or 17 rs LPG option at return rate of 17% from current effcient plants)...
also govt did nothing regarding the DESCO issue

what i am saying, i.e lack of reforms, every learned economist will tell you the same....

IMF/WB will revise it to 4.14% within few months.I am following both of them and both of them usually revise the past year growth rate after few months.

4.14% is not a bad start.But next year growth rate should be no less than 5%.

merely looking at GDP isnt everything, you have to look what caused the growth, what will be the effect on population and what taxation willl govt get for spending..

 

[SBD-3]

you didnt get what i said, govt used the previous govt fiscal year to clear circular debt and came up with a new circular debt during its tenure...
what govt simply did different from PPPP was to allocate more gas and power to industries, nothing else..we didnt see any change in tax to gdp ratio(now its official same at 8.8%!), we didnt see any electrical reforms with same over 1.5% subsides in power...

The debt payment was announced by the government in its first budget....1.7 trillion of deficit wasn't there for nothing.....

so in reality govt didnt achieved much in its first year....
i will excuse the govt for the first three years but excuses cannot be given in taxation and electricty reforms(power theft)...govt has clearly failed in this regard...so if i give PPPP 4/10, i will give PML N at best 6/10..they didnt delivered...

It wasn't bound to achieve much......Do you remember how everyday 2-3 blasts were rocking the country...How Quetta was turned into a somalia..how KPK was burning? Add to that how international lenders were ditching Pakistan? You can't expect an economy to pick up with such law and order and deteriorated fiscal position. Economy is like a locomotive, it needs extreme traction to move but when it starts moving the need for further traction to accelerate reduces...

attracting chinese with high return rate in coal at 30% isnt that difficult , it would have been great if they had attracted them at 15-20% return rate, now even for coal we will have to pay 10rs per unit instead of world average of 6-8rs (still better than 22 rs oil or 17 rs LPG option at return rate of 17% from current effcient plants)...
also govt did nothing regarding the DESCO issue

Well if it wasn't that difficult then why weren't they coming here before?
Do you know why most of the foreign banks pulled out of Pakistan....they were not being compensated for the security risk they were taking.....An investor doesn't merely demand a return based on financial aspects but adds multiple factors for determining the risk. Yes if a power house is generating 15-17 Rs per unit, how would it cost the economy had that demand been filled by fuel and gas guzzling generators?

what i am saying, i.e lack of reforms, every learned economist will tell you the same....

Reforms can't be forced on a system......Just like a medicine.....The effects are gradual with the threats of side effects. Ever wonder who long it took Chinese to reform their production economy from an imitating to an innovating economy like US? Chinese launched the reform process in 2006 and it is expected to complete in 2020......

 

[Dazzler]

I have had a close watch on federal and provincial financial developments and i have to admit, there is hardly any improvement overall, so much so that ishaq "forge dollar" shamelessly attempted to twist facts, again! Infact, KPK government is doing it the right way, they are slow, but surely moving in the correct path. I AM NOT A PTI FAN so do not label me as one, but will always appreciate the right thing no matter who does it.

They missed all their targets this year, and agriculture sector ended up in disaster. I mean, seriously, it was missed by a long shot, leave the tax collection aside which is a norm really.

 

[American Pakistani]

For a country like Pakistan 4.1% growth is nothing...not even peanuts.

 

[arushbhai]

Pakistan and the IMF --


Its on IMF Website

you trollll hahaha that was the projected one.

 

[ziaulislam]

The debt payment was announced by the government in its first budget....1.7 trillion of deficit wasn't there for nothing.....

It wasn't bound to achieve much......Do you remember how everyday 2-3 blasts were rocking the country...How Quetta was turned into a somalia..how KPK was burning? Add to that how international lenders were ditching Pakistan? You can't expect an economy to pick up with such law and order and deteriorated fiscal position. Economy is like a locomotive, it needs extreme traction to move but when it starts moving the need for further traction to accelerate reduces...


Well if it wasn't that difficult then why weren't they coming here before?
Do you know why most of the foreign banks pulled out of Pakistan....they were not being compensated for the security risk they were taking.....An investor doesn't merely demand a return based on financial aspects but adds multiple factors for determining the risk. Yes if a power house is generating 15-17 Rs per unit, how would it cost the economy had that demand been filled by fuel and gas guzzling generators?


Reforms can't be forced on a system......Just like a medicine.....The effects are gradual with the threats of side effects. Ever wonder who long it took Chinese to reform their production economy from an imitating to an innovating economy like US? Chinese launched the reform process in 2006 and it is expected to complete in 2020......

you are getting pretty blind because of your support for PML N.
short facts
1. reforms like taxation can be achieved in short time, there are half a dozens of examples, the Chinese reforms you are talking are about the state let going the econmy. so PML N is excused as taxation takes time and its office tenure is 5 years..did u saw the budget, only poor have been hit again with taxation on electricity and let going industrial output tax of 2%.in short govt did nothing new at all.

2. the growth rate of 4% was only modestly better than PPPP previous year due to high large scale and fertilizer sector due to power supply to them from the domestic sector.

3. the fiscal adjustment was an artificial one due to fact that in june 2013 the last month of fiscal year of PPPP PML N took huge debts and paid the circular debt but they booked that debt in fiscal year of PPPP ballooning their fiscal deficit from 5 to 8%. now this was acceptable to me had it not been nearly at same level as before, circular debt is again nearly same level as PPPP govt came in may

4. there shoud be a balnce between what u offer , simply giving a too high return rate is not what we call transparent, (the PPPP govt was stupid to not ALLOW ANY COAL PLANT due to thar interest appaernt from there fight with asian bank for 5 years before PML N came and accepted imported coal(right decision) however PPPP didnt offered so much return rate. ironically PMLN even today in all there documents criticize PPPP in 90s for IPPs when they offered a 17% return rate(instead of whopping 30% by PML N... i mean there should be a limit to profit..(its isnt a hydro BOOT plant that will be hand over to govt after 25 years!)

5. the only positives of this govt is there interest in rapidly developing the infrastructure and going for cheap coal for power sector (though the cheap coal is now expensive coal due to unbelievable return rate). govt may even achieve a growth rate it claims but without taxation what benefit will it bring to the poor. govt simply increasing indirect taxation and squeezing the poor instead of taxing the rich.

6. summary
pros.
1. power high return in coal wil solve the power crisis without govt doing anything.
2. favourble genral environment for investment

cons.
miserable taxation reforms( same 8.8% DESPITE HUGE AMOUNT OF WITHHOLDING AND DIRECT SALE TAX))
low spending , ignoring health and education(lack of money)

verdict....govt going for short term unsustainable growth model due to poor taxation and consequently low spending in social structure


PS. i am myself a supporter of PML N when it comes to PPPP, but facts are facts
ask any economist you know, he will tell you the same..
DAR ends are tightened he wants reforms but PML N party politics cannot allow this..
what i am saying look at historical record, PPPP and PML N on average achieved same growth but where PPPP growth was rural driven(agricultre e.g) PML N growth was industrial and urban infrastrutre driven..the only real mistake PPPP made was refusing coal plants they put there trust too much in thar, which wasnt possible for short term. other wise no difference between PPPP and PML N in taxation (pppp however,more reluctant in direct taxation on poor) or electricity reforms(theft etc)

 

[Thorough Pro]

No liar, different ways of calculations, remember world bank revising their estimates for 2012 growth a few weeks/months ago?

IMF website says GDP 3.1

wonder who is a liar here, creditor or debtor ?

 

[ziaulislam]

No liar, different ways of calculations, remember world bank revising their estimates for 2012 growth a few weeks/months ago?

i dont think he is laying regarding the growth rate...as i said not easy to lie

 

[SBD-3]

you are getting pretty blind because of your support for PML N.
short facts
1. reforms like taxation can be achieved in short time, there are half a dozens of examples, the Chinese reforms you are talking are about the state let going the econmy. so PML N is excused as taxation takes time and its office tenure is 5 years..did u saw the budget, only poor have been hit again with taxation on electricity and let going industrial output tax of 2%.in short govt did nothing new at all.

2. the growth rate of 4% was only modestly better than PPPP previous year due to high large scale and fertilizer sector due to power supply to them from the domestic sector.

3. the fiscal adjustment was an artificial one due to fact that in june 2013 the last month of fiscal year of PPPP PML N took huge debts and paid the circular debt but they booked that debt in fiscal year of PPPP ballooning their fiscal deficit from 5 to 8%. now this was acceptable to me had it not been nearly at same level as before, circular debt is again nearly same level as PPPP govt came in may

4. there shoud be a balnce between what u offer , simply giving a too high return rate is not what we call transparent, (the PPPP govt was stupid to not ALLOW ANY COAL PLANT due to thar interest appaernt from there fight with asian bank for 5 years before PML N came and accepted imported coal(right decision) however PPPP didnt offered so much return rate. ironically PMLN even today in all there documents criticize PPPP in 90s for IPPs when they offered a 17% return rate(instead of whopping 30% by PML N... i mean there should be a limit to profit..(its isnt a hydro BOOT plant that will be hand over to govt after 25 years!)

5. the only positives of this govt is there interest in rapidly developing the infrastructure and going for cheap coal for power sector (though the cheap coal is now expensive coal due to unbelievable return rate). govt may even achieve a growth rate it claims but without taxation what benefit will it bring to the poor. govt simply increasing indirect taxation and squeezing the poor instead of taxing the rich.

6. summary
pros.
1. power high return in coal wil solve the power crisis without govt doing anything.
2. favourble genral environment for investment

cons.
miserable taxation reforms( same 8.8% DESPITE HUGE AMOUNT OF WITHHOLDING AND DIRECT SALE TAX))
low spending , ignoring health and education(lack of money)

verdict....govt going for short term unsustainable growth model due to poor taxation and consequently low spending in social structure


PS.
ask any economist you know, he will tell you the same..DAR ends are tightened he wants reforms but PML N party politics cannot allow this

1-Whats that obsession with increasing the font size and painting things in red.
2- I asked you very simple questions...probably a survey the literature would provide you with that.
3- You have been passing the same verdict on every second thread...
4- I myself am a graduate student of economics now looking for a PhD....
P.S: If you need access to economics research portals, do feel free to contact me as i don't think anything beyond google scholar or SSRN would be available for you....good resources are indeed expensive...

 

[ziaulislam]

1-Whats that obsession with increasing the font size and painting things in red.
2- I asked you very simple questions...probably a survey the literature would provide you with that.
3- You have been passing the same verdict on every second thread...
4- I myself am a graduate student of economics now looking for a PhD....

well then how do you defend poor taxation,
stupidly increasing sale and withholding tax, when its already the highest in the world
no electrical reforms,
and stupidly high return rate of 30% when your party was against a 17% return rate in first place????

econmy didnt acheved its target not due to law and order(that was already put into factor while placing the target) but due to cutting off developemnt fund due to poor taxation, i am sure you know that so accept it...
low social spending will hinder any chance of long term sustainable growth, you know that too..govt may be excuse for short term situtation

to me PML N is simply a lesser evil than PPPP but still poor performance

 

[Thorough Pro]

That's what I said, "No Liar"

i dont think he is laying regarding the growth rate...as i said not easy to lie

 

[Xeenon]

Whenever you look for a solution for any given problem, there are two methods; one short term and one long term. Economy is no different, some drastic steps are required in short term to give economy the right direction and push even when the middle class and lower class gets squeezed. Once your energy problems are solved and infrastructure for development is in place then you can go for a more sustainable model. 5-10 years in any nations history is nothing with respect to economy but it can give it push in the right direction.

 

[SBD-3]

well then how do you defend poor taxation,
stupidly increasing sale and withholding tax, when its already the highest in the world
no electrical reforms,
and stupidly high return rate of 30% when your party was against a 17% return rate in first place????

econmy didnt acheved its target not due to law and order(that was already put into factor while placing the target) but due to cutting off developemnt fund due to poor taxation, i am sure you know that so accept it...
low social spending will hinder any chance of long term sustainable growth, you know that too..govt may be excuse for short term situtation

to me PML N is simply a lesser evil than PPPP but still poor performance

Its called Energy/Power sector reforms, not electrical reforms...I ignored it twice before...
My good friends, speaking in absolute vaccume doesn't help things. Reforms are a continuous process. Please provide me one example where a government was able to put through all of its reforms agenda in even 3-5 years, let alone one single year. The "lesser evil" has still proven far better than the alternatives presenting yet again a "tax-free" budget.....

Btw IMF is offering ESRx (Energy Sector Reforms) training program in this month, those who work in public sector can attend this online training free of cost and would be provided by a verifiable certificate of achievement by IMF.