Pakistan Sees Growth Surging to 7% as China Invests Billions

[Muhammad Omar]

• Sharif goverment to complete IMF program ending in September
• To sell national carrier, power companies after consultation

Pakistan will see its annual economic growth rate surge to 7 percent in two years as it reaps the benefits from China and others investing more than $40 billion in infrastructure, according to the Finance Ministry’s top bureaucrat.

Prime Minister Nawaz Sharif’s government is showing investors he’s serious about implementing economic reforms by heading toward completion of an International Monetary Fund loan program, Finance Secretary Waqar Masood Khan said in an interview in Islamabad on Wednesday.


“We still face challenges in achieving a higher growth," Khan said. “Compared to our potential, our growth rate is significantly low.”

Sharif is targeting growth of 5 percent for the current fiscal year ending in June, an eight-year high, as he works with the IMF to turn around an economy hindered by energy shortages and terrorism. China’s plans to invest $46 billion in an economic corridor are fueling optimism that growth is set to reach new heights.

Since Pakistan started taking IMF loans in the 1950s, it has struggled to see them through. It came close under former military president Pervez Musharraf, who didn’t take the last installment of that loan.

Khan said completing an IMF loan program “is always very tough." He declined to say whether the government would seek to borrow more from the IMF in the future.


“We will cross the bridge, when we come to it,” he said.

Khan doesn’t see hurdles in selling a stake in national carrier Pakistan International Airlines Corp., a condition for the release of IMF loan installments. Protests by the national carrier’s employees last month halted its flight operations.

"It is evident that there is more interaction required between the stakeholders,” he said. “The government’s commitment to bring strategic partner in PIA and other power companies is there and would be accomplished through a consultative process.”

The Sharif government has raised about $1.5 billion selling its remaining stakes in banks such as United Bank Ltd. and Habib Bank Ltd. That has helped increase the central bank’s foreign reserves to about $16 billion, Khan said.

Source: Bloomberg

 

[Talwar e Pakistan]

• Sharif goverment to complete IMF program ending in September
• To sell national carrier, power companies after consultation

Pakistan will see its annual economic growth rate surge to 7 percent in two years as it reaps the benefits from China and others investing more than $40 billion in infrastructure, according to the Finance Ministry’s top bureaucrat.

Prime Minister Nawaz Sharif’s government is showing investors he’s serious about implementing economic reforms by heading toward completion of an International Monetary Fund loan program, Finance Secretary Waqar Masood Khan said in an interview in Islamabad on Wednesday.


“We still face challenges in achieving a higher growth," Khan said. “Compared to our potential, our growth rate is significantly low.”

Sharif is targeting growth of 5 percent for the current fiscal year ending in June, an eight-year high, as he works with the IMF to turn around an economy hindered by energy shortages and terrorism. China’s plans to invest $46 billion in an economic corridor are fueling optimism that growth is set to reach new heights.

Since Pakistan started taking IMF loans in the 1950s, it has struggled to see them through. It came close under former military president Pervez Musharraf, who didn’t take the last installment of that loan.

Khan said completing an IMF loan program “is always very tough." He declined to say whether the government would seek to borrow more from the IMF in the future.


“We will cross the bridge, when we come to it,” he said.

Khan doesn’t see hurdles in selling a stake in national carrier Pakistan International Airlines Corp., a condition for the release of IMF loan installments. Protests by the national carrier’s employees last month halted its flight operations.

"It is evident that there is more interaction required between the stakeholders,” he said. “The government’s commitment to bring strategic partner in PIA and other power companies is there and would be accomplished through a consultative process.”

The Sharif government has raised about $1.5 billion selling its remaining stakes in banks such as United Bank Ltd. and Habib Bank Ltd. That has helped increase the central bank’s foreign reserves to about $16 billion, Khan said.

Source: Bloomberg

This isnt a surprise - looking at our economic history. Pakistan has immense potential, but many things hold us back. Electricity deficiency accounts for 2% of our growth being hampered while our 36% undocumented economy accounts for another 2% - the Government has pledged to solve both problems by 2018. Terrorism, crime and corruption have also significantly been reduced - terrorism it self has cost us around 80 billion dollars.

It is why we hear about a billion dollar investment in Pakistan everyday - other countries acknowledge this. Just today, South Korea planned on making one of the world's largest IT park in Pakistan. It shows how everyday we hear something new. I see a significantly bright future; its visible in every corner of Pakistan.

 

[Pandora]

Seeing is believing lets wait before jumping backwards in joy.

 

[Osiris]

Succesive Pakistani governments have missed their growth forecasts 8 years in a row now.

This year too Pakistani government is very likely to miss its growth forecast of 5%.

IMF projects Pak economic growth at 4.5%

 

[Muhammad Omar]

Succesive Pakistani governments have missed their growth forecasts 8 years in a row now.

This year too Pakistani government is very likely to miss its growth forecast of 5%.

IMF projects Pak economic growth at 4.5%

the main reason is Energy shortfalls (Load shedding of Gas and Electricity) when your Industry is closed how can your GDP will Grow...? but soon these hurdles will overcome

 

[cloud4000]

What about Pakistan subsidizing loss making state owned enterprises like PIA or PSM?

 

[SrNair]

Pakistan needs a 8+ % growth rate .In fact they have the capability .
They should have been a good relation with India .Now they are just wasting their resources because they are buying all of our products through GCC .

 

[Muhammad Omar]

What about Pakistan subsidizing loss making state owned enterprises like PIA or PSM?

Already doing....

 

[Donald Trump]

One of the Pak politicians I heard on YouTube recently mentioned that with the CPEC, rivers of gold will flow in Pakistan! And that it would transform into the fastest growing economy in the world within a couple of years!

But in the same show a retired Pak general mentioned that the Chinese are taking the Pakistanis for a ride as most of the income generated will go to the Chinese companies as they would need to pay back the massive loans they have taken from China's Central Bank to make the CPEC including Gwadar which has been leased to the Chinese for 40 long years!!!

 

[Talwar e Pakistan]

One of the Pak politicians I heard on YouTube recently mentioned that with the CPEC, rivers of gold will flow in Pakistan! And that it would transform into the fastest growing economy in the world within a couple of years!

But in the same show a retired Pak general mentioned that the Chinese are taking the Pakistanis for a ride as most of the income generated will go to the Chinese companies as they would need to pay back the massive loans they have taken from China's Central Bank to make the CPEC including Gwadar which has been leased to the Chinese for 40 long years!!!

People have different views about it - Pakistanis always have to criticize something, when they know nothing of it. Whatever happens only good can come from it. Gwadar has been leased to China for management purposes - they dont get the revenue generated from it.

Here are SOME projects that China has invested into Pakistan from 2014-2015; and then you'll know why we could reach 7% easily in the next coming years.

Succesive Pakistani governments have missed their growth forecasts 8 years in a row now.

This year too Pakistani government is very likely to miss its growth forecast of 5%.

IMF projects Pak economic growth at 4.5%

IMF has been wrong many times before, and they only forecast growth-rates depending on the current situation. Truth is, Pakistan has never had a stable rate - its completely unpredictable and constantly change. It can go from 4.5% to 8% any time. Look the chart below for elaboration.

And we have actually been 1-4% higher on average than forecasts. Our economy took a hit during the peak of war on terrorism or else it usually had an average growth rate of 6%

Our economy is also immune to crisis's whether they be region or international, social or economic.
Economy of Pakistan - Wikipedia, the free encyclopedia

 

[Zaneesh852]

Succesive Pakistani governments have missed their growth forecasts 8 years in a row now.

This year too Pakistani government is very likely to miss its growth forecast of 5%.

IMF projects Pak economic growth at 4.5%

IMF's growth projections are merely forecast numbers coming out of their models. You would see most of the emerging and developing economies missing the forecasts by great deal.

 

[somebozo]

the main reason is Energy shortfalls (Load shedding of Gas and Electricity) when your Industry is closed how can your GDP will Grow...? but soon these hurdles will overcome

Indian exports and industrial output dropping steadily for last 14 months..yet their economy is still assumed to be growth...some impressing number crunching skills

 

[Manindra]

Indian exports and industrial output dropping steadily for last 14 months..yet their economy is still assumed to be growth...some impressing number crunching skills

We are genius in mathematics since ancient era

btw, imports are also sliding by leaps & bounds so not much fear & internal demand would also picked up in future.

 

[Muhammad Omar]

Indian exports and industrial output dropping steadily for last 14 months..yet their economy is still assumed to be growth...some impressing number crunching skills

Point to be noted

 

[Great Sachin]

Long list of loan payment is waiting.....Chinese investment is yet another loan.....

economy = aid + loan......