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

[Mrc]

Looks like money laundering is being checked bit by bit! A long way to go though....

According to the Italian Ambassador to Pak, 80% of Pak's economy is undocumented/unregulated/untaxed...

Well that's true..

Its probably even more than 80 percent

 

[Hakikat ve Hikmet]

Well that's true..

Its probably even more than 80 percent

Shoot....

 

[PakFactor]

Where are the worshippers of papa Nawaj Chayreef??? @volatile @Jungibaaz @Tameem

Don’t forget our residence Noon League space station.

 

[The Accountant]

Bloomberg - Are you a robot?

Yes you are probably right in terms of remittances however, it goes down is still a question mark as economies are opening again. Furthermore, the capital being brought into country means more foreign currency for investments.

Right now the stuation is really good. Yesterday I talk to someone at top position in Al-Karam Textile and he told me that they have so many export order that Al-Karam mill is not able to adjust small orders of Al-Karam studio (the local designer wear garment arm of Al-Karam). Similar is the position with my organization.

So while remittances are going to get down in future months, the export is expected to increase in coming months.

 

[The Accountant]

Looks like money laundering is being checked bit by bit! A long way to go though....

According to the Italian Ambassador to Pak, 80% of Pak's economy is undocumented/unregulated/untaxed...

Its slightly reduced but not controlled. Probably after FATF law the crack down will expedite. The problem is the backers of these money launderers are powerful people having connections in political parties (both government and opposition), military and bureaucracy. Any move against them resist from all sides but the top leadership of Pakistan both in government and establishment are now committed to fight this white color crime.

Lets pray Allah give them success.

 

[volatile]

lets not jump just wait for H1 to over and summarize

Yes you are probably right in terms of remittances however, it goes down is still a question mark as economies are opening again. Furthermore, the capital being brought into country means more foreign currency for investments.

Right now the stuation is really good. Yesterday I talk to someone at top position in Al-Karam Textile and he told me that they have so many export order that Al-Karam mill is not able to adjust small orders of Al-Karam studio (the local designer wear garment arm of Al-Karam). Similar is the position with my organization.

So while remittances are going to get down in future months, the export is expected to increase in coming months.

 

[The Accountant]

lets not jump just wait for H1 to over and summarize

Shouldn't this work both way? I mean if I should wait for 6 months to analyze the long term positive trend in CAD then you should also wait for 6 month to give negative remarks ... shouldn't you ? ya hamary ly qanoon alag ha ?

 

[volatile]

Shouldn't this work both way? I mean if I should wait for 6 months to analyze the long term positive trend in CAD then you should also wait for 6 month to give negative remarks ... shouldn't you ? ya hamary ly qanoon alag ha ?

our history is negative CAD and also this may be outlier or one time event

 

[blueazure]

kindly read the article these all are temporary measures

met a sales guy yesterday. he was in saudi arabia for 15years , got laid BEFORE covid and is now searching for job . countless others like him who have returned from ME

ME is totally going to crash in next 2-3 years unless we see 120 USD oil prices ( highly unlikely)

if remittance is our hope for forex, god help us

 

[ziaulislam]

CAD is not a goal or metric..
goal is GDP growth, infact even that is not a right metric
i would say goal is improvement in HDI

CAD however is essentially for stability and achieve the above goal ..the hyper inflation we saw in last two years is direct consequence of this instability..albeit it could have been much much worse, i was surprised how it was contained to this level..

apparently our begging ability is much better then originally thought..
let see what happens in 2028 after Maryam/bhutto complete their term, may be than time we will surely default

 

[ziaulislam]

Shouldn't this work both way? I mean if I should wait for 6 months to analyze the long term positive trend in CAD then you should also wait for 6 month to give negative remarks ... shouldn't you ? ya hamary ly qanoon alag ha ?

this temporary due to covid related low economic acitivty
i expect this to return into negative again

however, a negative 1-2% CAD is nothing to worry about

its a problem when goes upto 3-4+ %(or is projected to go up with no reserves as cushion , as economy is always forward looking)

summary of our problem is that govt "print notes" in last 18 months and drops interest rates to create fiscal space for heavy spending. The result is obvious low inflation, high imports, high CAD, high growth(which the govts sell as a success) though this inevitably causes a burst (fake money) which cancels al the growth we achieved

this tried and tested method has made PMLN & PPPP popular, so why wouldn't they do it again, they are our drug sellers and Pakistanis are their junkies

 

[ziaulislam]

=======
now remember covid over spending and printing notes that we did this year and last year of overspending due to high interest rates means that stabilization process will continue this fiscal year too.

i think it would truly be the fourth year when economy will be stabilized..
so the effect of 2018 over spending to achieve a 5.8% growth destroyed 3 years of 4+ growth we could have achieved..

but jus like a junkie doesnt believe the doctor and blames his for all his misery (though invariables come to him after he shots up) the people of pakistan(educated people) act the same as well, already asking for the next dose of heroine that would again result in same conculsion..

will PTI govt be able to resist that call to print notes last yr? i really doubt it, as that would be political suicide as printing notes is still a popular idea in Pakistan. Thus untill every one unites in resisting this idea of over spending in election yr the bomb and burst cycle will continue

 

[Rafael]

lets not jump just wait for H1 to over and summarize

The exports in July were up by 30% if I am not wrong and down in August by 16% I am told which is partially due to floods in Karachi.

I expect them to jump back on positive side this september. Lets see.

 

[Rafael]

Yes you are probably right in terms of remittances however, it goes down is still a question mark as economies are opening again. Furthermore, the capital being brought into country means more foreign currency for investments.

Right now the stuation is really good. Yesterday I talk to someone at top position in Al-Karam Textile and he told me that they have so many export order that Al-Karam mill is not able to adjust small orders of Al-Karam studio (the local designer wear garment arm of Al-Karam). Similar is the position with my organization.

So while remittances are going to get down in future months, the export is expected to increase in coming months.

Same situation in Punjab. The deliveries of fabric from looms have increased so much due to the workload they have. Earlier, you could get the fabric delivered in 30-45 days after order and now it is taking upto 90 days. The capacities are running short these days.

 

[The Accountant]

our history is negative CAD and also this may be outlier or one time event

no brother, the current account deficit was on continuous trajectory of decline right after PMLN left and from average 1.7 billion dollar a month fell to just 300 million a month even before lock downs and corona.