October 18th 2017 Global Gdp Ranking

[SMC]

You Pakistanis seems to estimate everything. I want to understand the basis for such estimation. At least name few industries that weren't part of calculation but sprung up lately in the last decade. All of you seem to be superficial economists rather than substantial ones.

These are not my estimates. There have been a ton of articles discussing unreported economy and how big it is in Pakistan.

 

[protest]

exports growth to hit double digit PER WORLD BANK report this and through year
GDP growth 5.5% and will continue to rise with CPEC, remember WB said it aint gona happen(previously projection were 4) but it did happen and WB agrees, WB is more playing catch up....

all govt projections indicate a 7% growth(WB still says aint gona happen) in 2019-2020..
i think we can easily hit 6-8% in next couple of years, key i think is to devise a good export plane to reduce pressure on reserves, IMO 3-4% of current account deficit of GDP is threatening but not an emergency as long as there is more growth in exports as compare to imports...

this second thing which is important is geo politics, Pakistan needs to get it act together and slide out of Afghanistan affairs, refuse CSF, fence the boarder, open it up for trade and respond to all Indian proxy war firmly and globally...

the huge cushion given via CPEC is not count by WB as it considered this as govt to govt investment rather than FDI, counting that there will be no requirement for foreign financing
WB is more biased when it comes to china...

1.second part is undocumented economy govt is doing study with WB its gona add 25% to our nominal GDP..
2. look at the difference between PPPP and nominal, this means that pakistan nominal can increase very rapidly as its disproportionate low to its PPPP
3. govt forcing every cooperate to use banks/cards to pay (15+ job company) is a good move
i think if visa/master is too expensive for merchants Pakistan should introduce its own payment system may be NB should take the lead

if Pakistan does add 25% to its econmy by documenting the undocumented econmy and growth at merely 5% next 5 years than assuming inflation of 7% Pakistan should be 800b$ GDP

and easily within top 20 GDPs of the world by nominal

infact by end of this year we are gona skip 10 or so countries on that list

Wow. They should make you Pakistan's chief economist.

These are not my estimates. There have been a ton of articles discussing unreported economy and how big it is in Pakistan.

Okay, so you have read those articles, so tell me what is being unreported. If they are not being reported how do you know their percentage. You are basing the argument on supposed estimations. Historically, Pakistan rebasing has increased its economy by mere 7%. Even if it is more, it'll just screw up your macroeconomics as someone pointed out your tax to gdp ratio and savings rate are hard numbers and not estimations. Its a double edged sword.

 

[Advocate Pakistan]

Great news. I am convinced Pakistan has one of the largest undocumented economies on earth. There is dire need to log it. Any source or link for this please?

There's a 2012 research paper on the undocumented economy of Pakistan by two of my teachers, M Ali Kemal and Ahmed Waqar Qasim, both research economists at PIDE, the premier economic research institution in Pakistan.
Here are the results, they have used the data from 2007-8 and concluded that the informal economy was 91% of formal GDP for that year, almost near double.
Read the conclusions only, if you are not an economist. Read the whole paper if you are an economist.

 

[ziaulislam]

its not me, its WB
if you have factspeak otherwise dont quote me, i dont have time to engage kids


NOW READ THIS CAREFULLY
"This is substantially larger than previous estimates of between 30 per cent to 50 per cent (albeit using different methodologies). If correct, this implies that the overall size of Pakistan’s economy, both reported as well as unreported, is around $420 billion, with private consumption at current prices amounting to a whopping $365bn in 2012 (which would explain the consumption “conundrum” I have written about previously)."
1. https://www.dawn.com/news/787833
2. http://documents.worldbank.org/cura...p-Pakistan-Development-Update-Spring-2017.pdf

Wow. They should make you Pakistan's chief economist.



Okay, so you have read those articles, so tell me what is being unreported. If they are not being reported how do you know their percentage. You are basing the argument on supposed estimations. Historically, Pakistan rebasing has increased its economy by mere 7%. Even if it is more, it'll just screw up your macroeconomics as someone pointed out your tax to gdp ratio and savings rate are hard numbers and not estimations. Its a double edged sword.

no it wount
india India's tax-to-GDP ratio is at ~12% worse than ours
https://economictimes.indiatimes.co...-scrutiny-government/articleshow/60010602.cms

pakistan is ~13% imporved from around 9% in 2013
realistically speaking after the adjustments our tax to gdp ratio will be around 10% which makes sense as poor taxation as compred to india

like all idiots, no matter what facts and figures i give you it will not matter so just dont quote me again

 

[Nilgiri]

As per NILGRI Nominal GDP sucks as compared to GDP (PPP) for below 5000 USD bracket.

It does because it literally extrapolates single digit % of GDP to full 100% on 1:1 basis.

Its especially bad when all you export as developing country is one commodity like BD does. Neither do BD people only consume clothes inside their country....neither do the people outside BD after all. This distorts the exchange rate considerably, esp if you import much wider base of goods/services to what you export (specifically their price elasticities - exacerbated by such thing as the guaranteed LDC quota/low tariff BD enjoys in Europe over India/Pak)....putting aside the low raw volume/GDP to begin with.

5000 or 10k GDP per capita etc for better nominal applicability is a rule of thumb because generally a country has become broad based enough in its industries/services and world trade footprint regarding them for nominal USD to apply in a better fashion to the extrapolation to whole economy. Even then its not perfect, it depends, it just gets a lot closer to PPP in relevance/accuracy.

Pakistani members must use the PPP argument firmly whenever a BD guy brays about nominal per capita being close/surpassed one a) irrelevant metric to begin with b) several outdated base/methodologies at play. Everyone should at least come to same SNA 2008 standard and use a new base year as possible. SNA 2008 standard needs a base revision every 5 years unlike prior standards too (so Pakistan and BD automatically will benefit long term for data), but both BD and Pakistan need to do lots of reform in their accounting vetting by IMF I believe as first major step. Arguably BD and Pakistan have much more priorities in the meantime to deploy the "reform" resources, I have little information on that.

When Pakistan's GDP gets rebased, it's likely going above 400 billion, possibly 500 billion. That will likely put Storm Force in the ICU.

I will update an estimate after doing an analysis (using stock market data) on this thread below given ongoing Pak base year problem (time pending of course):

https://defence.pk/pdf/threads/how-...-per-capita-income.519979/page-5#post-9903119

I don't think it will be as huge increase as you estimating here, but it will be considerable. There are no real short term solution to capturing more of the informal economy into formal one in some impulse way (not without considerable collapse in the informal given nature of how it operates), its a long term process (improve tax reforms, crack down on black money, better credit availability to pvt sector esp SME and digital economy push etc).

Re-basing itself only looks at how the formal sector itself has expanded organically (into informal and also just pure growth) and changed (say IT/comms being bigger % than before compared to heavies like oil, cement etc) since the last snapshot. Thus size of informal (estimate) is really just a buffer of potential (and exists for every developing country), there is little indication it can be realised in a short time frame by simply re-basing in any significant way.

 

[AyanRay]

its not me, its WB
if you have factspeak otherwise dont quote me, i dont have time to engage kids


NOW READ THIS CAREFULLY
"This is substantially larger than previous estimates of between 30 per cent to 50 per cent (albeit using different methodologies). If correct, this implies that the overall size of Pakistan’s economy, both reported as well as unreported, is around $420 billion, with private consumption at current prices amounting to a whopping $365bn in 2012 (which would explain the consumption “conundrum” I have written about previously)."
1. https://www.dawn.com/news/787833
2. http://documents.worldbank.org/cura...p-Pakistan-Development-Update-Spring-2017.pdf


no it wount
india India's tax-to-GDP ratio is at ~12% worse than ours
https://economictimes.indiatimes.co...-scrutiny-government/articleshow/60010602.cms

pakistan is ~13% imporved from around 9% in 2013
realistically speaking after the adjustments our tax to gdp ratio will be around 10% which makes sense as poor taxation as compred to india

like all idiots, no matter what facts and figures i give you it will not matter so just dont quote me again

That only relates to the Union Govt figures. Add the taxes collected by the State Govt and the ratio rises to 17%, which is also very low. The corresponding figure of Pakistan is 9.5% for the Union Govt and 12.5% if you add the states. And secondly steel, cement and electricity is the backbone for any economy, every industry uses it be it formal or informal. So, find out what's the per-capita consumption of Pakistan for these three products and you will understand where Pakistan really stands.

 

[BetterPakistan]

Okay. I know my economics but i want to understand yours. I want you to give me an detailed reasoning to your understanding of GDP rebasing. Not just 'India gained so could we' cliche. That's just doesn't cut it for me coming from a economist like you.

You know your economics? Its shit. First, you was of the view that Pakistan GDP hasn't crossed $300 bn and now you are going to waste my time in other thing. BTW I haven't seen such an old figure economist like you .. I am not an economist but know basics of economics.

GDP rebasing be it beneficial or not should be done every decade and its necessary. You cannot have the latest data which uses 12 years old base year like Pakistan is working on 2005-06 base year. What exactly India gained from rebasing??

Nigeria gained a lot from rebasing. Its GDP increased 88%.

Also population census should also be done every decade but Pakistan took exception to it, showing its percapita being better than what it is in reality, what do say to that mr.economist?

Mr Illiterate,

Census was initiated in 2011 but failed due to the political situation in Pakistan but still completed in 2017. Our Census also includes those 3-4 million afghans living illegally in Pakistan. And for the fact GDP per capita is not simple like dividing population by GDP. When you go for Census, you should also for the fact that IMF claimed Pakistan informal economy to be at least 36% of GDP.

India does census and rebasing as matter of policy. Rebasing is done every five years and census every decade. India has reason for it to do rebasing given an Industry like mobile production come up from nothing in 2012 to making more than 500 million smart phones in 2016 increasing to more than a billion by 2020. This will have huge impact in our next rebasing.

Have a huge impact on your next re-basing same like demonetization slowed India's GDP growth?

500 million smart phones won't have a huge impact because of having 1.3 bn population. Quantity alone doesn't creates an impact in-fact % of increase compare to previous quantity/value creates an impact. So you're telling me there was no mobile phone industry in India in 2012 . Are you high??

So give me an example like this that is happening in Pakistan. But please don't blurt out CPEC, it'll just expose your understanding of ECONOMICS.

let me expose your example first, kiddo

India has a mere 125 million smartphone users currently, the world’s third-largest base after China and the United States. However, the growth opportunity is huge. The country is slated to overtake the United States in 2016 and become the world’s second-largest market for smartphones, exceeding 200 million smartphone users says research firm eMarketer. China, in contrast, already has over 500 million smartphone users.

Source:- Forbes


How can you prove that India has a mobile industry of 500 million smart phones ?

Nobody is denying the fact that Pakistan needs a re-basing, but on what basis is it being argued that it will show a spike in Pakistan's GDP numbers. Re-basing doesn't mean recounting the GDP. It only readjusts the weightage given to various sectors of the economy. So what really has changed structurally in Pakistan's economy since 2005-06 which would indicate some sectors might have been underrepresented in Pakistan's GDP.

Edit: Can you mention any two "new" sectors which did not exist in Pakistan 10 years ago but now is a very big thing?

First of all, I don't need to understand re-basing from you. Secondly, GDP rebasing be it beneficial or not should be done every decade and its necessary. You cannot have the latest data which uses 12 years old base year like Pakistan is working on 2005-06 base year.