General Musharraf Regime Collapsing In Pakistan: Stephen Cohen

[Neo]

High inflation in Pakistan is a direct result of growing domestic demand of consumers goods and increasing disposable incomes by the middle class whereas local production is failing to meet the growth in demand which again explains the unprecedented hike in iport bills.

But the investors will keep coming to Pakistan despite high inflation as long as we keep providing lucrative and competitive returns. After Vietnam, Pakistan is paying second highest returns to FDI in Asia and no change is expected in this trend anytime soon.

 

[Bull]

High inflation in Pakistan is a direct result of growing domestic demand of consumers goods and increasing disposable incomes by the middle class whereas local production is failing to meet the growth in demand which again explains the unprecedented hike in iport bills..

High inflation does a guarantee you a good return on investment, almost. But when high inflation is accompanied with a low growth the picture is totally different.

GDP can be defined as value/cost of goods/services mfr in pakistan, when inflation is 9.4% the cost will definitly go up by 9.7% and inturn a equal jump in GDP. But here you see inspite of 9.4% jump what we see is 6 % growth. So who is eating up 3%??

If the figurs of 9 and 6% are true there are causes of worry.

My earlier comments were solely based on FDI and KSE.

But the investors will keep coming to Pakistan despite high inflation as long as we keep providing lucrative and competitive returns. After Vietnam, Pakistan is paying second highest returns to FDI in Asia and no change is expected in this trend anytime soon.

Higher inflation automatically demands higher returns or you will end up donating money to the system.

 

[BATMAN]

One element is that we lack enough basic industries and we have to import many basic goods. Our local investment is 80% in non-productive sector i.e. shares, properties, imports, re-sellers etc.
I aslo feel Pakistan lack agricultural land as compare to its population.

 

[blain2]

I aslo feel Pakistan lack agricultural land as compare to its population.

Pakistan does not lack agro-land. Its essentially inefficient usage of the land and not yielding enought output. Our production per acre is a joke compared to the western countries. If we increased it through automation, better fertilizers, seeds etc.,, Pakistan would constantly (year over year) have surplus crops. This is a known fact.

 

[Adux]

Higher inflation automatically demands higher returns or you will end up donating money to the system.

thank you, my point exactly

 

[Bull]

thank you, my point exactly

i just rephrased it....;-)