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Well the difference is even after a slowdown ..our growth rate is three times as much as yours.
Yes currency devaluation has positive effects on exports ..but this effect is highly overrated for example ..you currency has devalued by almost 70% in last 4 yrs..would care to guess out what is the percentage increase in your exports during the same period
...inversely devaluation also has inflationary effect on the economy.
Economically Pakistan is in a bad shape ..though not yet on 2008 levels ..but unhindered it can regain those levels in a blink .. especially with SBA ending...time to return the $8 Billion to IMF arriving..those foreign reserves will be depleting fast.
you dont share a long porous border with a country that is a narco-state, with a raging insurgency and foreign military presence; you havent faced 2 major earthquakes and 2 major floods all within just the past 5-6 years.....have you?
you dont have a spineless govt. that can't even provide basic things like un-interrupted electricity supply.....you dont have the extent of corruption that the establishment does.
so perhaps you should keep that in mind when talking about your growth rate (which has been slowing down too)
yes our growth rate is slow, but the GDP is still growing nevertheless....not anywhere near the level Pakistan is capable of (such as what we saw in mid 2000s) but for now, at least the economy is growing and not shrinking.
the data is readily available....in fact the current account deficit is narrowing --i dont know if this is because of IMF conditions or because the ministries are keen to keep the deficit down.
our current account deficit is not large at all; Fiscal 2010 and 2011 saw increased exports (higher % level in 2010). Meanwhile, we've been seeing steady decrease in imports from 2009.
in 2009, our current account imbalance was approx. $9b whereas by the end of fiscal 2011 it will hopefully be around $1.5 - 2b
there are many other factors that would affect inflation ---currency deval. isnt the only one
yes there would be cost inflation....Pakistani govt. could create incentives to save money (interest rates, etc.)
ultimately at the end of the day, inflation is one of the obstacles on the way of development. In Pakistan, it has squeezed a section of the population. It needs to be controlled by strategic planning. Domestic production should be encouraged instead of imports; investment should be given preference in consumer goods instead of luxuries, Agriculture sector should be given some subsidies, foreign investment should be attracted once the security environment improves -which it kind of is already...
it is in tough waters but it isnt the ''end of the world'' or ''doomsday'' the way a few outsiders -with their vested interests -would have you think. On the ground in Pakistan, it's just another day. People are still shopping, still going about, still living their lives.
the govt. cant seem to resist the debt trap temptation; that's unfortunate that a good % of budget goes towards debt servicing......we should try to push to have some of those debts forgiven or re-scheduled.
oh and by the way, foreign reserves are not used to repay external debts to IFIs
the data is readily available....in fact the current account deficit is narrowing --i dont know if this is because of IMF conditions or because the ministries are keen to keep the deficit down.
our current account deficit is not large at all; Fiscal 2010 and 2011 saw increased exports (higher % level in 2010). Meanwhile, we've been seeing steady decrease in imports from 2009.
in 2009, our current account imbalance was approx. $9b whereas by the end of fiscal 2011 it will hopefully be around $1.5 - 2b
I think your view on Current account numbers is overly optimistic.. You had a good year last year because of remittances and flood relief money coming in..
Current account deficit balloons to $2.1bn in five months
2011-12 is not looking good at all
you indians of all people should keep your pie-holes shut, considering your own economy is slowing down as well.....(as is the value of your currency)
Well you too should have kept your P-H shut before making this comment, just few weeks back many Pakistani members are commenting on India's lower then expected growth rate of 6.9% (not bad considering the current global situation) saying India's growth story is western propaganda!!!, this, that and so many nasty things, and then immediately next week we saw Pakistan posting worst growth compared to India around 3.5%...first get your house in order before commenting on India, and it applies to us also...
ok, so i was off by $0.1b (assuming the article is correct; and also based on MY source(s) -- the W.E.O. and IFS)
$0.1B ??
You estimated 1.5-2 billion USD deficit for the whole year, where as the 1st 5 months only have resulted in the deficit of 2.1 billion, which would probably end close to 5 billion USD for the whole year, and may be even worse because Pakistan will start paying back the IMF loan starting 2012 (unless it defaults on it).. So you are probably off by over $ 3 Billion
Why didn't Riaz Haq comment in this thread at all?We miss you Mr.Blogger!