Pakistan GDP cross $250 billion dollar mark

[deArtist]

I think its well established that the previous PPP government caused significant damage to the economy. The average growth rate during Mr. 10% (Zardari)'s tenure was well below the national average and certainly below Musharraf's generous 7% per annum. So, @farhan_9909, @orangzaib, @Faiez where would our be today had Musharraf's economic trends been continued?

 

[farhan_9909]

I think its well established that the previous PPP government caused significant damage to the economy. The average growth rate during Mr. 10% (Zardari)'s tenure was well below the national average and certainly below Musharraf's generous 7% per annum. So, @farhan_9909, @orangzaib, @Faiez where would our be today had Musharraf's economic trends been continued?

in the 5 year tenure of PPP,the export only was increased by 6Billion dollars,KSE stock exchange by less than 5k points and market cap only 13Billion dollars.

 

[Viper0011.]

I think its well established that the previous PPP government caused significant damage to the economy. The average growth rate during Mr. 10% (Zardari)'s tenure was well below the national average and certainly below Musharraf's generous 7% per annum. So, @farhan_9909, @orangzaib, @Faiez where would our be today had Musharraf's economic trends been continued?

Mushy the Kushy's economic trends weren't real "economic". There was in fact nothing economy related about it. When you get payments for a supporting a war, I don't think any economic model supports that. Its also not sustainable as war is a finite endeavor, whoever decides to embark on that journey.
Economy means policies, procedures, analyses of a country, to grow it from point A to B in X amount of time. In that, you'd model foreign investment if its a poor country, you'll form the basis of future growth, sales pitch, benefits / reforms for foreign investors and then a local way to balance out the trade, find cheaper partners, or build certain things at home, establish a baseline for growth and set up a complex path for that growth to come true. In that process, you are dealing with terrorism related issues, bad political stability, lack of infrastructure and all (in Pakistan's case). So Mushy's time was a heaven, without doing any of the above, he was getting a huge payment in dollars. Because of the need to ship defense products to Iraq from Karachi, the transport business grew a LOT and then people who made a ton of money through coalition support transportation, then invested in their other businesses. So it was really a "feel good" few years when the money was poured in from a military standpoint and without any sustainable, real economic policies. But if you REALLY think Mushy grew the economy, from the World bank, I saw a report a while ago that said, for every dollar, Pakistan lost $ 7 - 10 due to terrorism, bad politics, bad governance and lack of accountability. That is a HUGE loss and makes you wonder how the 7% economic growth was "cooked" if you will.

 

[ziaulislam]

If 5% then 2015 will $264.6 Billion
If 4.5% then 2015 will $263.34 Billion
If 4% then 2015 will $262.08 Billion

Plus we have to check inflation and other factor. As per some experts Pakistan easily achieve 260 mark because of low oil price the pressure on our Forex reduce. In year 2013 Pakistan import bill on oil was $14.914 billion and based on today's market price Pakistan Oil import bill will be between $7 billion to $9 billion with a saving of $5+ billion

sir its not so simple, you have to count inflation too plus some other minor things..your GDP estimates just shows REAL GROWTH only.. say 10 inflation plus 5% real gdp growth adjusted for some other things will give you approx 14% growth which comes out to be 30-35 billion dollars additionally over 250

 

[Faiez]

I agree with that


My friend, I trade dollar on daily basis and follow Forex news on hourly basis so let me tell you something.

Rupee did not only increase because PKR got stronger... It was dollar which got weaker. It is true because USD lost value against Euro, GBP and several other major pairs at the same time. Rupee gained value due to various reasons I mentioned earlier... some of which are

• Dollar became weaker (and if one currency becomes weaker, rival currency is bound to rise)
• Rupee had been highly undervalued from 90 to 110 during the election time and post-election period so it was bound to rebound
• The confidence of foreign investors was too low and after the elections, the confidence was slightly brought back so more dollar inflow was widely seen in the country
• More Forex reserves after blocked payment by IMF and USAid were made
• Massive increase in remittance by overseas Pakistanis after the government decided to offer higher rate to people sending through legal channels such as the bank
• The atmosphere of dollar gaining value was damaged by economists and an impression was created that if you stock dollar, you may incur heavy losses
• That 1 billion dollar of aid from Saudi Arabia meant sudden rise in currency value out of no where

It is a matter of demand and supply. There was a shortage of dollar in the country so it was rising and suddenly it was coming from everywhere... So the rebound settled the price closer to 97 once again... and USD was not gaining strength so it could not regain the space thus far

BUT !!!! SBP DID INTERFERE !!!!

It's no longer just market forces then. It was SBP's intervention. Their injection of something like $60m cash into the markets that resulted in dollar falling from 110 to 105 in ONE DAY. SBP interfered. Currently the market WANTs to trade at a higher price, but SBP not letting that happen.

Had SBP not interfered, dollar would have been higher.

Might be possible that I need a thoroughr reading of economics. But tell me about what impact would have on our imports? Where we are oil importer countries and large chunk of our foreign reserves goes into it approximately 12-15$b. When our currency is devalued then its means our imports are more
expensive and when Imports are
expensive specifically oil and raw
material then your cost of production
becomes high and so the inflation. So
the benefit the exporters try to capitalize is offset by the rising cost which erodes purchasing power of consumers so in real time you erodes the benefit where your exports are struggling because of high input prices which makes you internationally uncompetitive.
I know that there are benefits for devaluation but everything is good in the required perimeters. You have to see theoobjective situation of a country to reap the benefit.whereas you can't compare China devaluation in context ofp pakisPakistan because it has its own structural and unique problems. So if you say that country like Pakistan can reap benefits from devaluation where your large scale manufacturing output is not increasing then the con's are going to arise more than prose.
It is all about your argument that Pakistan should have devalued currencyand sshould not chest thumping over this.
The thing is, a policy to give its positive results then the policy should be according to the prevailing circumstances

Oil prices have already fallen by 45% something, that saves alot on the import bill. Right now is the ideal time to devalue currency. It would cause minimal inflation but still boost exports alot. So according to the situation, it's better to devalue currency right now(if they absolutely have to interfere, otherwise I support the free market).

I think its well established that the previous PPP government caused significant damage to the economy. The average growth rate during Mr. 10% (Zardari)'s tenure was well below the national average and certainly below Musharraf's generous 7% per annum. So, @farhan_9909, @orangzaib, @Faiez where would our be today had Musharraf's economic trends been continued?

It wasn't just pakistan, the entire global economy grew very quickly during those years. Musharaf was keeping the currency overvalued through SBP interventions and kept it low until he had to leave. Then the economic crisis came right when PPP came and they had no choice but to let the dollar rise (we just didn't have the money to keep it low anymore, it wasn't sustainable). The global crisis resulted in lower growth. Plus the government was corrupt too, which didn't help, rather worsened the situation. Too much cash was simply thrown in the gutter during that gov.'s time.

So to answer your question, Musharaf HAD to leave, he couldn't do what he was doing sustainably. Had he been through the economic crisis, the country would have still have lower growth. But perhaps slightly better than PPP's performance.

 

[ziaulislam]

a very simple formula whether SBP interfered or not is to look at foreign reserves. SBP interfered during 2011-12 and it drained it foreign reserves very quickly..its simple SBP didnt interfered during past few years. its simply a fact that instability in govt affairs means greater instability in rupee and it swings both ways purely on sentiment bases

 

[Hyde]

BUT !!!! SBP DID INTERFERE !!!!

It's no longer just market forces then. It was SBP's intervention. Their injection of something like $60m cash into the markets that resulted in dollar falling from 110 to 105 in ONE DAY. SBP interfered. Currently the market WANTs to trade at a higher price, but SBP not letting that happen.

Had SBP not interfered, dollar would have been higher.

60 million dollar is peanuts.. but you can say out of various factors the close monitoring of SBP was also one of the key factors for stabilisation of rupee... or controlling devaluation of rupee. The end result is the conjunction of various factors

a very simple formula whether SBP interfered or not is to look at foreign reserves. SBP interfered during 2011-12 and it drained it foreign reserves very quickly..its simple SBP didnt interfered during past few years. its simply a fact that instability in govt affairs means greater instability in rupee and it swings both ways purely on sentiment bases

Totally agree

 

[Faiez]

60 million dollar is peanuts.. but you can say out of various factors the close monitoring of SBP was also one of the key factors for stabilisation of rupee... or controlling devaluation of rupee. The end result is the conjunction of various factors

Pakistan is a tiny market. And since people expect dollar to always rise, that sharp fall in price in one day caused panic selling.

 

[rockstar08]

Good Going , hope to see more investment in Power sector ... lets make our country safe for everyone to invest ..

 

[Hyde]

Pakistan is a tiny market. And since people expect dollar to always rise, that sharp fall in price in one day caused panic selling.

acha acha tum jeetay yaar... kahani khatum

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Edit: Waise agar economy suddenly increase ho gayi hai, exports bhi increase hoe hain, imports bhi technically increase hoe hain lakin % wise gap widen nahi howa, rupee stability, stock market main zayada halchal aur sab kuch positive vibes pe hi hai to aisi intervention buri baat nahi --- hai naa?

Kyounke negative impact closer to none hi nazar aaya hai

aur SBP bought dollars from the open market in order to show better representation of Pakistan's Foreign account and it is not bad in sense that you don't want to tell to the people that you are hungry