Baby Leone
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AN estimated Rs500 billion Eid ul Fitr economy, in a serious security situation, highlights both the resilience and the softer side of the Pakistani society. It also indicates the potential of the economy to bounce back if the right set of policies are put in place and the quality of governance improves.
As the fragmented society comes together to celebrate the festival in the spirit of sharing and caring, the consumer spending stimulates the sagging economy.
A series of complex calculations based on random data quoted by varied sources particularly banks, market associations, think tanks, etc. helped to arrive at the base number.The estimates forwarded by the philanthropic institutions of the total donations they expected during the current Ramazan were added up to arrive at the size of Eid ul Fitr economy.
Of the enormous Rs500 billion, over one-fourth or Rs150 billion comprises Zakat, Khairat, Fitra etc. Muslims are ordained by their religion to pay at least two-and-a-half per cent of the total worth of their stored wealth as Zakat to the needy at the start of Ramazan, the holy month of fasting. How fairly do people pay what is due on them is difficult to assess. However, there is no denying the fact that most people do help the less fortunate in Ramazan The total withdrawals from all banks during Ramazan is estimated at Rs250 billion. The central banks major liquidity injections helped banks to deal with the liquidity crunch after heavy withdrawals.
In another normal pre-Eid development, the State Bank decided to issue fresh notes to the tune of Rs110 billion, up from Rs94 billion of last year. The demand for fresh notes is generated primarily to finance the distribution of Eidi (gift money).
Some random figures of revenue during the season attributed by the media to representatives of multiple market associations runs into millions during the peak spending periods during Ramazan.
Well, people spend three to five times their normal monthly budget over the month preceding Eid but in absence of consolidated data on sales and volumes it is difficult to quote a number with confidence, Dr Rashid Amjad, director general, Pakistan Institute of Development Economics, commented on phone from Islamabad. He sidelined the question as to why such a study had not been initiated thus far by any of the prestigious economic research institutions.
The informal survey indicated the varying composition of spending in the family budget of different social classes. The proportion of spending on poor increases as income climbs. While in families of modest means, the Eid budget is consumed by basic needs, food, clothing, etc.
The richer families spend as low as one to ten per cent on their personal affects, the rest is invested for some social cause, deposited with some NGOs of their choice or distributed amongst poor families in the traditional way.
The fact is that you try to give back to the society what you have. The elite is large hearted when it comes to supporting the vulnerable, a researcher commented.
Alam sells readymade garments at a mini stall in Zainab Market in the Saddar area in Karachi. For a space barely enough for two people in the passageway, he pays as much as Rs22000 a month as rent.
Yes, the retail price has increased vertically but so is our overhead cost. The impression that we are squeezing hapless customers is a fiction. The competition forces us to keep our margins at the bare minimum. My profit is hardly enough to keep me afloat, he said, adjusting piles of T-shirts on a crowded table.
---------- Post added at 10:46 AM ---------- Previous post was at 10:46 AM ----------
Eid spending a stimulus for the economy | Magazines | DAWN.COM
As the fragmented society comes together to celebrate the festival in the spirit of sharing and caring, the consumer spending stimulates the sagging economy.
A series of complex calculations based on random data quoted by varied sources particularly banks, market associations, think tanks, etc. helped to arrive at the base number.The estimates forwarded by the philanthropic institutions of the total donations they expected during the current Ramazan were added up to arrive at the size of Eid ul Fitr economy.
Of the enormous Rs500 billion, over one-fourth or Rs150 billion comprises Zakat, Khairat, Fitra etc. Muslims are ordained by their religion to pay at least two-and-a-half per cent of the total worth of their stored wealth as Zakat to the needy at the start of Ramazan, the holy month of fasting. How fairly do people pay what is due on them is difficult to assess. However, there is no denying the fact that most people do help the less fortunate in Ramazan The total withdrawals from all banks during Ramazan is estimated at Rs250 billion. The central banks major liquidity injections helped banks to deal with the liquidity crunch after heavy withdrawals.
In another normal pre-Eid development, the State Bank decided to issue fresh notes to the tune of Rs110 billion, up from Rs94 billion of last year. The demand for fresh notes is generated primarily to finance the distribution of Eidi (gift money).
Some random figures of revenue during the season attributed by the media to representatives of multiple market associations runs into millions during the peak spending periods during Ramazan.
Well, people spend three to five times their normal monthly budget over the month preceding Eid but in absence of consolidated data on sales and volumes it is difficult to quote a number with confidence, Dr Rashid Amjad, director general, Pakistan Institute of Development Economics, commented on phone from Islamabad. He sidelined the question as to why such a study had not been initiated thus far by any of the prestigious economic research institutions.
The informal survey indicated the varying composition of spending in the family budget of different social classes. The proportion of spending on poor increases as income climbs. While in families of modest means, the Eid budget is consumed by basic needs, food, clothing, etc.
The richer families spend as low as one to ten per cent on their personal affects, the rest is invested for some social cause, deposited with some NGOs of their choice or distributed amongst poor families in the traditional way.
The fact is that you try to give back to the society what you have. The elite is large hearted when it comes to supporting the vulnerable, a researcher commented.
Alam sells readymade garments at a mini stall in Zainab Market in the Saddar area in Karachi. For a space barely enough for two people in the passageway, he pays as much as Rs22000 a month as rent.
Yes, the retail price has increased vertically but so is our overhead cost. The impression that we are squeezing hapless customers is a fiction. The competition forces us to keep our margins at the bare minimum. My profit is hardly enough to keep me afloat, he said, adjusting piles of T-shirts on a crowded table.
---------- Post added at 10:46 AM ---------- Previous post was at 10:46 AM ----------
Eid spending a stimulus for the economy | Magazines | DAWN.COM
