GDP rebasing done with 2015-16 base. GDP growth rate for FY21 is 5.57%. GDP size: 55.5 tr or $346 bn. Per capita $1666. Debt to GDP 72%.

[muhammadhafeezmalik]

Yes

Nope. Artificial overvaluation of Rs does not make gdp in dollars much higher. Eventually currency has to be devalued to avert the crisis caused by overvalued exchange rate and the gdp in dollars comes back to reality

https://twitter.com/x/status/1173923661985636352

View attachment 810053

What are the consequences to keep $ overvalued??

 

[Maula Jatt]

What are the consequences to keep $ overvalued??

@Norwegian

 

[ziaulislam]

Nope, on exchange rate of Rs 105 to 1$ the GDP in Dollar terms would be far higher.
That's where BD or India is looking better than Pakistan in dollar terms. Devaluation of rupees has hit Pakistan GDP and Per Capita in dollar terms.
Ishaq Dar should be publicly hanged, he is the one who borrowed through private companies with sovereign guarantees , these were the mines Dr Ishfaq was referring to, these borrowing never shown in the official figures, thus giving the impression of better economic conditions than there were.
It kept the rupee artificially high in international market.
As a matter of fact Pakistan was technically bankrupted by thug Ishaq Dar.

Stupid Pakistani public should be thankful to Imran Khan that Pakistan is still functioning, if it was PMLN , Pakistan would have been in dire situation.

If u self proclaim that the one apple that you grow in your orchaid is worth two apples now in your area it doesnt make or increase your productivity(or GDP) what it does is make other people quickly sell their own apples on you(subsidized imports) to grab 100% profit you are giving

This is exactly what we did with the rupee

In long run this should cancel out with inflation

Lastly nominal GDP really isnt important its purchasing power

The difference is one counts the apples the other apples worth in $

What matters?

What are the consequences to keep $ overvalued??

You can do an experiment yourself
Go to street of lahores grab some apple
And scream this apple is worth 1000 rupees...

When people ask tell them if you dont beleive me i will take a 1000 rs for anyone who brings me an apple.

When you buy few dozen apples from people from all over lahore lining infront of you ..you will know what overvalued rupee does to you..in flip side you will have
Alot of apples(low inflation) & alot of debt
Reminds of you of someone??

Just declaring rupee overvalued will lead to high imports (& low inflation while u have the money/$$ to finance it) nothing else

 

[ziaulislam]

This is bad..& unsustainable
Next 4 months will tell if we are moving to another crash landing or not

If CAD run above 1b$ per month we are heading towards a crash

We know oil will drop soon(5-6months) so we can run it abit high for few months but not at ~1.8b/month

Will govt adjust or will it double down and make it worse like PMLN for election purposes

 

[ziaulislam]

If CAD remains below 15 billion $ would that make you confidant that we are on a more sustainable path.

15b isnt sustainable..anythong beyond 7-8b isnt

But really depends upon growth of exports

Let say you have deficit but double digit export growth that will make lenders believe that okay they will be pay it off

Hence why lenders panic in 2018 because our exports were growing negative

Economy has now almost corrected it self from 2018 artifical state of imbalance(still you will see high inflation as lag effect of rupee devalution stuff is much more cheaper in pakistan especially agri products)

Issue going forward is what will international lenders think..can we raise funds

I would go for fund rasing now particularly WAPDA should go and rise green bonds

I will aslo fast pace some CPEC projects

 

[crankthatskunk]

If u self proclaim that the one apple that you grow in your orchaid is worth two apples now in your area it doesnt make or increase your productivity(or GDP) what it does is make other people quickly sell their own apples on you(subsidized imports) to grab 100% profit you are giving

This is exactly what we did with the rupee

In long run this should cancel out with inflation

Lastly nominal GDP really isnt important its purchasing power

The difference is one counts the apples the other apples worth in $

What matters?


You can do an experiment yourself
Go to street of lahores grab some apple
And scream this apple is worth 1000 rupees...

When people ask tell them if you dont beleive me i will take a 1000 rs for anyone who brings me an apple.

When you buy few dozen apples from people from all over lahore lining infront of you ..you will know what overvalued rupee does to you..in flip side you will have
Alot of apples(low inflation) & alot of debt
Reminds of you of someone??

Just declaring rupee overvalued will lead to high imports (& low inflation while u have the money/$$ to finance it) nothing else

Well, if you know economics, you should know that anyone try to sell above supply and demand would fall on his face. That's why price rises always followed by artificial shortages. That's how mafia makes the bucks.

Did you say or criticised Ishaq Dar about import lead progress!! In his time the imports soared and the reserves fall sharply to the point of technical bankruptcy.

I have always said that GDP and per capita income are subjective and misleading. It is just median of a country's total income over its population.
I have in the past posted the figures that Pakistan is better off than India, BD and Sri Lanka on affordability and purchasing power.

 

[Norwegian]

What are the consequences to keep $ overvalued??

How many times do I have to tell you that? You go bankrupt with overvalued exchange rate. Look at Lebanon for reference.
@Patriot forever @ziaulislam @farok84 @Sainthood 101

 

[Norwegian]

Reminds of you of someone??

Reminds me of him of course. Last person who experimented with overvalued exchange rate and destroyed Pakistan's exports in the process

@muhammadhafeezmalik

 

[N.Siddiqui]

Reminds me of him of course. Last person who experimented with overvalued exchange rate and destroyed Pakistan's exports in the process

Not just exports, destroyed and diminished the Forex as well, with reserves less than 8 billion USD is last year of his tenure.

this 'V' shape recovery looks good, more prominent in the year 2020-21 and 2021-22.

 

[Norwegian]

Not just exports, destroyed and diminished the Forex as well, with reserves less than 8 billion USD is last year of his tenure.

Yeah that too of course. And then he ran away to London on prime minister's plane

 

[N.Siddiqui]

Yeah that too of course. And then he ran away to London on prime minister's plane View attachment 810531

He informed that the PTI-led government had to return $55 billion in its next two years in debt payment, adding that a sum of $32bn had already been paid under debts in the last three years.

"We are paying the price for the legacy left by Asif Ali Zardari and Nawaz Sharif," the minister said, in reference to the last two governments of the PPP and PML-N.

Pakistan's economic position will be 'far better' by August, says Fawad

"We are paying the price for the legacy left by Asif Zardari and Nawaz Sharif," says minister.

www.dawn.com

This is huge, repaying 55 billion plus 32 billion USD is not a small feat, for a country like Pakistan short on forex in just 5 years of PTI.

And why the debt is not decreasing substantially with huge repayment, the Ans. seems to be we are taking new loans with new maturity dates to pay off older loans which has matured.

Still in bad debts, will take some doing.

 

[Patriot forever]

Not just exports, destroyed and diminished the Forex as well, with reserves less than 8 billion USD is last year of his tenure.

View attachment 810530



this 'V' shape recovery looks good, more prominent in the year 2020-21 and 2021-22.

Yes not only exports but remittances as well. Not to mention deindustrilization.

I posted a comparative analysis of REER value of currency, exports and remittances.

A comparative analysis at a basic level.

a) Exports CY basis (Jan-Dec)

Our exports dropped as the result of lack of competitiveness which ultimately led to erosion of capacity. (CY20 is when corona hit).

b) REER value of currency.

From a fairly valued currency in 2013 which should have been maintained SBP interference in currency began ( the longetivity of period clearly shows that it was done as a policy decision by political interference in SBP operations).

c) Remittances.

For 4 years from FY 2014 - FY 2018 our remittances inflows were stagnant and the natural growth momentum/trajectory was subdued due to artificial manipulation of currency.

During the same 5 year period India and Bangladesh enhanced their exports by roughly 50%, making their currency and macros fundamentally strong.

 

[hydrabadi_arab]

View attachment 810471

This is bad..& unsustainable
Next 4 months will tell if we are moving to another crash landing or not

If CAD run above 1b$ per month we are heading towards a crash

We know oil will drop soon(5-6months) so we can run it abit high for few months but not at ~1.8b/month

Will govt adjust or will it double down and make it worse like PMLN for election purposes

Amazing, even all time high remittances , exports are not enough to control CAD. We are back to nightmare of 2018 despite market based exchange rate. Something is seriously wrong with economy and tax collection. Had Pakistan collected Rs8 trillion then CAD will not be like this, Rs6 trillion isnt enough. Need to get money from people hands with direct tax. Problem is 50% of our tax is collected at port.

Looks like we will once again beg around instead of increasing tax collection. And with time it will only get worse. To start off increase petrol price to Rs200. That will collect extra Rs1 trillion.

Honda 70cc mileage is 50-60km per liter. Land cruiser 4km per liter or corolla 10km/liter. Point is majority of petrol is used by car owners and not people with 70CC motorcycles.

 

[ziaulislam]

Lebanon is my favourite they are like pakistanis

How many times do I have to tell you that? You go bankrupt with overvalued exchange rate. Look at Lebanon for reference.
@Patriot forever @ziaulislam @farok84 @Sainthood 101 View attachment 810516

 

[Norwegian]

He informed that the PTI-led government had to return $55 billion in its next two years in debt payment, adding that a sum of $32bn had already been paid under debts in the last three years.

"We are paying the price for the legacy left by Asif Ali Zardari and Nawaz Sharif," the minister said, in reference to the last two governments of the PPP and PML-N.

Pakistan's economic position will be 'far better' by August, says Fawad

"We are paying the price for the legacy left by Asif Zardari and Nawaz Sharif," says minister.

www.dawn.com

This is huge, repaying 55 billion plus 32 billion USD is not a small feat, for a country like Pakistan short on forex in just 5 years of PTI.

And why the debt is not decreasing substantially with huge repayment, the Ans. seems to be we are taking new loans with new maturity dates to pay off older loans which has matured.

Still in bad debts, will take some doing.

I won't blame Zardari. External debt accumulation stabilized by the end of his term. It only became unsustainable during Khota Biryani years. I hope current govt is able to stabilize it once more but it seems unlikely now as we are in an ever growing external debt trap