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Featured Pakistan’s Current Account Records First Quarterly Surplus in Over 5 Years: SBP

No way your living in Lahore
I don't need to prove my country of residence to someone who choses to remain flagless. I have been on this forum when you were probably in your chadi with a chosni in your mouth. Alot of people including webmaster know me from than and will tell you where I am from.
Rest of your post is as usual more gibberish from you which isnt worth a response. Talk to me when you have actual numbers with sources to back up your claims.
 
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Sadly our awaam is so jahil, even certain "senior moderators" on this forum aren't capable enough to process such news. Pakistanis deserve to be ruled by ganwaars like Nawaz Sharif.
Senior moderators remind me of senior bureaucrats who are more loyal to Nawaz / Zardari than Pakistan.
We are registering surplus here and some brain damage idiots are questioning PTI performance on economy. Lol
Not brain damage but brainless.
 
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The result of transparent trade policies are showing the results.
As a consequence the Rupees is getting firmer against the dollars in recent days.
This is "market's" mechanism at work.

Not artificial higher value of the rupees maintained by treacherous Dar, who borrowed heavily and on excessive interest rates through private limited companies giving Sovereign guarantees and not including the figures in national debts or foreign debts. He was keeping that borrowed money in the reserves to prompt up the rupee artificially.

If only Pakistanis understand the implications of that move, they would tear the PMLN goons apart.

The current "Mehangai" or "Inflation is caused by two factors.

1- The selfish and criminal attitude of Pakistani traders and others, they are increasing prices of commodities by hoarding and other illegal means. Most of them are PMLN /PPP supporters. They are putting people against PTI government. PM IK should take care of this urgently.

2- By the policies of Dar. The Rupee adjusted itself after PTI transparent policies and achieved its market driven exchange rate. Due to the adjustment of rupee to its actual value against the dollar, the imports became costlier in rupee terms, thus higher prices.
But it is all done by Dar, which have very long terms implications.

More than Nawaz , Dar should be brought back and tried for treason.

For another of his crime to be instrumental in passing of "18th Amendment".
Mark my words, 18th have to go for Pakistan to survive.
 
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The result of transparent trade policies are showing the results.
As a consequence the Rupees is getting firmer against the dollars in recent days.
This is "market's" mechanism at work.

Not artificial higher value of the rupees maintained by treacherous Dar, who borrowed heavily and on excessive interest rates through private limited companies giving Sovereign guarantees and not including the figures in national debts or foreign debts. He was keeping that borrowed money in the reserves to prompt up the rupee artificially.

If only Pakistanis understand the implications of that move, they would tear the PMLN goons apart.

The current "Mehangai" or "Inflation is caused by two factors.

1- The selfish and criminal attitude of Pakistani traders and others, they are increasing prices of commodities by hoarding and other illegal means. Most of them are PMLN /PPP supporters. They are putting people against PTI government. PM IK should take care of this urgently.

2- By the policies of Dar. The Rupee adjusted itself after PTI transparent policies and achieved its market driven exchange rate. Due to the adjustment of rupee to its actual value against the dollar, the imports became costlier in rupee terms, thus higher prices.
But it is all done by Dar, which have very long terms implications.

More than Nawaz , Dar should be brought back and tried for treason.

For another of his crime to be instrumental in passing of "18th Amendment".
Mark my words, 18th have to go for Pakistan to survive.
😍😍😍
 
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So surplus is meaningless while deficit was a good thing.
Nice logic.
By the way this isnt pti manipulating numbers, international agencies are also saying on similar lines. They must also be on PTI payroll.
And talking about being worst than nawaz and zardari lol like drone attacks, memogate, obl raid, sahala check post attack, APS attack happened in the time of PTI.
Seriously kuch thori sa sharam ker lo. Nothing was more black than the combined 10 years of these two leaches.
Look i refuse to accept that a sane person cant comprehend simple concepts of current account deficit, state bank lending(note printing) and negative interest rates leading to negative gdp savings..

These are straight forward concepts..

How difficult is to understand that PMLN simply printed fake notes which led to momentary growth(people got money/stimulus) followed by huge inflation due to unback money and huge imports due to spending..

Its oldest trick in the book..we saw its effects in afghanistan zimbabwe and vinz.

So its meaningless to discuss with them as they already know this
 
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Sharam kar lo? I could say the same to you but that would put me at your level. So have some respect when speaking to other people irrespective of your political inclinations.

Anyhow, the reason you have no idea about the insane economic situation on ground is because either you don’t live in Pakistan or you don’t work in Pakistan. Go do a fact check on the current GDP to Loan ratio and the increasing per day borrowing.
If you lived here, you’d realise that the way ordinary people used to abuse the Ganja bros and thug zardari was nothing compared what their emotions are towards Imran Khan today. It’s sad because like them, I too for once, thought that things will go in the right direction this time.
Don’t take my word for it tho, just wait till the next elections.

View attachment 681614

1603342267730.png
 
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Look i refuse to accept that a sane person cant comprehend simple concepts of current account deficit, state bank lending(note printing) and negative interest rates leading to negative gdp savings..

These are straight forward concepts..

How difficult is to understand that PMLN simply printed fake notes which led to momentary growth(people got money/stimulus) followed by huge inflation due to unback money and huge imports due to spending..

Its oldest trick in the book..we saw its effects in afghanistan zimbabwe and vinz.

So its meaningless to discuss with them as they already know this

This government printing currency at faster pace than the previous government.

Security Papers Limited (SEPL), the company which produces paper for currency notes, recently posted the highest-ever profit after tax, revealed company officials at a corporate briefing this week.

“When the government faces budget deficit, it meets its expenses by printing new currency notes,” remarked economist Kaiser Bengali.

The government now takes loans from private banks as the International Monetary Fund (IMF) has slapped a condition, preventing it from borrowing from the central bank, which leads to printing of new currency notes.

“Government loans are akin to printing new banknotes because it is the only way through which the leadership can pay its debt,” said the economist.

Pakistan recorded a budget deficit of around 9.2% of gross domestic product (GDP) in fiscal year 2019-20 while the target was to curtail it to 7%.


 
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This just illustrates that only showing numbers without going into details would be misleading. How much of this debt was due to depreciation, how much actual loan taken and on which interest rates and tenure, what were the interest rates and tenure of the previous paid loans?
This author might be a great statistician, but not an economist
 
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This just illustrates that only showing numbers without going into details would be misleading. How much of this debt was due to depreciation, how much actual loan taken and on which interest rates and tenure, what were the interest rates and tenure of the previous paid loans?
This author might be a great statistician, but not an economist

Same could be said about PPP, PMLN loans, but you accuse them for same reasons.
 
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every country is recording a surplus a country like Bangladesh recorded a surplus of more then 3 billion USD in the same period when Pakistan had some 700 million.

i will give credit to any govt when Pakistan export will increase which is not the case with PTI as well till yet.
 
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Time to end the spin

Khurram Husain

Updated 22 Oct 2020

THERE is this pesky thing about reality — it always finds a way to assert itself. You can muzzle it, deny it and spin it away but it will always catch up with you eventually. Perhaps that’s why we call it reality, because it doesn’t go away simply because somebody in a position of power or influence orders it to go away. And for any ruler there are two realities that simply cannot be muzzled, denied or spun away: economics and war.

Take one example of how reality is being spun to try and put a little shine on things. On Wednesday, when the rest of the country was still debating the fallout of the Karachi jalsa, the prime minister tweeted the following: “Great news for Pakistan. We are headed in right direction finally. Current Account was in surplus of $73 mn during Sept, bringing surplus for 1st qtr to $792 mn compared to deficit of $1,492 mn during same time last yr. Exports grew 29pc & remittances grew 9pc over previous month.”

This is spin, pure and simple, and there is an easy way to show that. Look at how the data is presented. For the current account balance (which is in surplus) the data is compared to the same period last year. For exports and remittances — the two key elements in the current account — the data is compared to the preceding months. The impression this creates is one of overall improvement.

But let’s invert this presentation for a moment and see what happens. Let’s compare the current account balance to the preceding months and remittances and exports to the same period last year instead and see what happens.

In July, August and September, the three months under discussion, the current account balance was in surplus by $508 million, $211m and $72m respectively. In case you missed the significance, on a month-to-month basis the surplus is actually shrinking, and rather rapidly. Let’s discuss why a little later.

Next up, if you compare exports and remittances in the month of September from the same month last year, you will notice that exports rose this year by $72m, or 3.8 per cent of their value last year. This is not exactly a triumphant increase. Remittances in the month of September saw an increase of $544m from last year, or just above 31pc.

The thing to note in the data is the $417m increase in the trade deficit in September, which is almost 29pc, or just about the same as the increase in remittances. It is not clear whether or not this increase in remittances owes itself to any government policy yet, so let’s wait before celebrating it as a major triumph of any sort, but we can note this simple reality: the remittances are financing the trade deficit.

Notice how the shine goes off the numbers if you invert the manner in which they are presented. The current account was helped along by a near collapse in imports during the months of the Covid-19 lockdowns, and now that those are receding, oil prices are regaining their earlier levels, the surplus that was posted in July and August is shrinking.

The bigger point is that nothing in the underlying economy has changed so if the government guns for growth at this point the current account deficit will reappear with a vengeance.

Anytime you see any government loudly celebrating individual data points, telling you to rejoice because reserves are up this week or the current account deficit is down, or whatever, you can be sure that they have no real story of success to tell and are leaping from one data release to the other as if they are stepping stones that actually lead somewhere. If you look at all the data points that they have invoked in the past and urged us to rejoice, you will realise that the story of the economy is not going anywhere as of right now.

I have said it in the past and it bears repeating: deficit reduction is not the key here. Of course deficits need to be reduced when an economy has depleted its foreign exchange reserves or blown all its fiscal buffers to the point where its debt levels have hit unsustainable heights. Where exactly that point lies is a subjective judgement though.

There are examples from our very own neighbourhood of countries that have persistently run deficits in their fiscal and current accounts for almost three decades now without depleting their reserves (or at least nowhere near as often as Pakistan has) and without blowing out their fiscal balance sheet. India and Bangladesh stand out as examples, as to a lesser extent Sri Lanka and Nepal too.

In Pakistan what matters is what we do after the deficits have been reduced. Every government in the past 30 years has begun its term in office by reducing the current account deficit, and in some cases, the scale of the reduction has been larger than what the current government is boasting. There is nothing unusual in this. It happens every time in the first year of an IMF programme. Perhaps the only unusual thing for this government is that it will have two first years of an IMF programme in two years, given they are about to negotiate a return to the programme and present a circular debt reduction plan as well as a tax plan for the ongoing fiscal year.

The reality is that this government is adrift. There is no vision at play, whether for tax reform or on state-owned enterprises. We are told something has been developed for the power sector, but the test of this plan will be their ability to arrest and reduce the circular debt without recourse to tariff hikes.

Reality is asserting itself now, in the data as well as the streets. Time to end the rhetoric.

The writer is a member of staff.

khurram.husain@gmail.com

Link: https://www.dawn.com/news/1586413

Comments: A very hard hitting article, what do people over here think and how would they critique, respond to the author if they wanted to?
 
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Time to end the spin

Khurram Husain

Updated 22 Oct 2020

THERE is this pesky thing about reality — it always finds a way to assert itself. You can muzzle it, deny it and spin it away but it will always catch up with you eventually. Perhaps that’s why we call it reality, because it doesn’t go away simply because somebody in a position of power or influence orders it to go away. And for any ruler there are two realities that simply cannot be muzzled, denied or spun away: economics and war.

Take one example of how reality is being spun to try and put a little shine on things. On Wednesday, when the rest of the country was still debating the fallout of the Karachi jalsa, the prime minister tweeted the following: “Great news for Pakistan. We are headed in right direction finally. Current Account was in surplus of $73 mn during Sept, bringing surplus for 1st qtr to $792 mn compared to deficit of $1,492 mn during same time last yr. Exports grew 29pc & remittances grew 9pc over previous month.”

This is spin, pure and simple, and there is an easy way to show that. Look at how the data is presented. For the current account balance (which is in surplus) the data is compared to the same period last year. For exports and remittances — the two key elements in the current account — the data is compared to the preceding months. The impression this creates is one of overall improvement.

But let’s invert this presentation for a moment and see what happens. Let’s compare the current account balance to the preceding months and remittances and exports to the same period last year instead and see what happens.

In July, August and September, the three months under discussion, the current account balance was in surplus by $508 million, $211m and $72m respectively. In case you missed the significance, on a month-to-month basis the surplus is actually shrinking, and rather rapidly. Let’s discuss why a little later.

Next up, if you compare exports and remittances in the month of September from the same month last year, you will notice that exports rose this year by $72m, or 3.8 per cent of their value last year. This is not exactly a triumphant increase. Remittances in the month of September saw an increase of $544m from last year, or just above 31pc.

The thing to note in the data is the $417m increase in the trade deficit in September, which is almost 29pc, or just about the same as the increase in remittances. It is not clear whether or not this increase in remittances owes itself to any government policy yet, so let’s wait before celebrating it as a major triumph of any sort, but we can note this simple reality: the remittances are financing the trade deficit.

Notice how the shine goes off the numbers if you invert the manner in which they are presented. The current account was helped along by a near collapse in imports during the months of the Covid-19 lockdowns, and now that those are receding, oil prices are regaining their earlier levels, the surplus that was posted in July and August is shrinking.

The bigger point is that nothing in the underlying economy has changed so if the government guns for growth at this point the current account deficit will reappear with a vengeance.

Anytime you see any government loudly celebrating individual data points, telling you to rejoice because reserves are up this week or the current account deficit is down, or whatever, you can be sure that they have no real story of success to tell and are leaping from one data release to the other as if they are stepping stones that actually lead somewhere. If you look at all the data points that they have invoked in the past and urged us to rejoice, you will realise that the story of the economy is not going anywhere as of right now.

I have said it in the past and it bears repeating: deficit reduction is not the key here. Of course deficits need to be reduced when an economy has depleted its foreign exchange reserves or blown all its fiscal buffers to the point where its debt levels have hit unsustainable heights. Where exactly that point lies is a subjective judgement though.

There are examples from our very own neighbourhood of countries that have persistently run deficits in their fiscal and current accounts for almost three decades now without depleting their reserves (or at least nowhere near as often as Pakistan has) and without blowing out their fiscal balance sheet. India and Bangladesh stand out as examples, as to a lesser extent Sri Lanka and Nepal too.

In Pakistan what matters is what we do after the deficits have been reduced. Every government in the past 30 years has begun its term in office by reducing the current account deficit, and in some cases, the scale of the reduction has been larger than what the current government is boasting. There is nothing unusual in this. It happens every time in the first year of an IMF programme. Perhaps the only unusual thing for this government is that it will have two first years of an IMF programme in two years, given they are about to negotiate a return to the programme and present a circular debt reduction plan as well as a tax plan for the ongoing fiscal year.

The reality is that this government is adrift. There is no vision at play, whether for tax reform or on state-owned enterprises. We are told something has been developed for the power sector, but the test of this plan will be their ability to arrest and reduce the circular debt without recourse to tariff hikes.

Reality is asserting itself now, in the data as well as the streets. Time to end the rhetoric.

The writer is a member of staff.

khurram.husain@gmail.com

Link: https://www.dawn.com/news/1586413

Comments: A very hard hitting article, what do people over here think and how would they critique, respond to the author if they wanted to?

The writer is a known N leaugue / PPP supporter. Whatever he writes should be seen in that context.

Few weeks ago, he wrote an article about how current account deficits are good for the country in some cases.
 
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This surplus is meaningless. The only reason the government has s CA surplus is because they didn’t make any interest or loan payments this year. Wait till next year you will note a much higher CA deficit than ever. I feel sorry for the poor idiots who buy this manipulation of numbers. The reality on ground in Pakistan is worst than ganja and chor zardari’s tenure combined. The truth is no matter how this government twists facts and words, it has lost all credibility along with 80% of the public support it enjoyed before elections. Those who have a hard time processing this will find this out very soon.

You have a valid point regarding stoppage of loan payment because of corona but nevertheless surplus will go beyond $1.5 billion in next 6 months time which will be a substantial difference even in case of loan repayment. Exports are also increasing on quarterly basis unlike in the past where, on average we were losing our exports by $ 1 billion per year.

Now coming to your point regarding at ground level, yes at micro level, things are not that good as of now, inflation is high but seriously this was bound to happen when you sign off with IMF. They keep your macro levels indicators in check while you have to compromise on micro level which of course, directly effects the people but considering Pakistani economy in mind, it will take atleast 4-5 more years to have a very improved, sustainable economy at macro level and than ONLY improvement will automatically be transferred to micro level on its own. Good macro level indicators will dictate improve micro indicators itself. So at the moment Pakistan is going thru a correction phase where emphasize is clearly on the macro level and in a longer run its a better solution.

Working on micro level indicators while ignoring macro level stuff is always a temporary solution which previous Govts used to do hence the economy never took off over the years.
 
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Let’s discuss why a little later
How clever? When it came to why the author instead chose to get on to remittances. Nice!
When he is stating that surplus is shrinking why does he forget that the previous months under lock down and Corona devastated the entire economies of the developed world yet alone a country like Pakistan, still we came out better with a likely forecast by IMF that sees a negative growth of only 1 to 1.5%.
Secondly he talks about remittances and than goes own to say a 3.8% increase isn't any triumph. Again he missies out that after corona and hitting of world economies how many people have gone jobless specially in the Gulf countries, still instead of going negative, an increase is indeed a feat. Than he says it is not clear if this increase is due to government policies. Lol like everything bad is because of government policies but an increase, certainly No, nothing to do with government. Forget how government using its channel made sure that Saudi Arabia continues to pay dues to Pakistani labour or Qatar is asked to pay for laid of force and how after 13 years 600 Pakistani medical professionals will be employed in Kuwait. On top of this he has the audacity to call this as truth.
 
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The writer is a known N leaugue / PPP supporter. Whatever he writes should be seen in that context.

Few weeks ago, he wrote an article about how current account deficits are good for the country in some cases.

Refute the facts he presented with logic. Don't shoot the messenger.
How clever? When it came to why the author instead chose to get on to remittances. Nice!
When he is stating that surplus is shrinking why does he forget that the previous months under lock down and Corona devastated the entire economies of the developed world yet alone a country like Pakistan, still we came out better with a likely forecast by IMF that sees a negative growth of only 1 to 1.5%.
Secondly he talks about remittances and than goes own to say a 3.8% increase isn't any triumph. Again he missies out that after corona and hitting of world economies how many people have gone jobless specially in the Gulf countries, still instead of going negative, an increase is indeed a feat. Than he says it is not clear if this increase is due to government policies. Lol like everything bad is because of government policies but an increase, certainly No, nothing to do with government. Forget how government using its channel made sure that Saudi Arabia continues to pay dues to Pakistani labour or Qatar is asked to pay for laid of force and how after 13 years 600 Pakistani medical professionals will be employed in Kuwait. On top of this he has the audacity to call this as truth.

Yeah! how clever!!

"This is spin, pure and simple, and there is an easy way to show that. Look at how the data is presented. For the current account balance (which is in surplus) the data is compared to the same period last year. For exports and remittances — the two key elements in the current account — the data is compared to the preceding months. The impression this creates is one of overall improvement."
You have a valid point regarding stoppage of loan payment because of corona but nevertheless surplus will go beyond $1.5 billion in next 6 months time which will be a substantial difference even in case of loan repayment. Exports are also increasing on quarterly basis unlike in the past where, on average we were losing our exports by $ 1 billion per year.

Now coming to your point regarding at ground level, yes at micro level, things are not that good as of now, inflation is high but seriously this was bound to happen when you sign off with IMF. They keep your macro levels indicators in check while you have to compromise on micro level which of course, directly effects the people but considering Pakistani economy in mind, it will take atleast 4-5 more years to have a very improved, sustainable economy at macro level and than ONLY improvement will automatically be transferred to micro level on its own. Good macro level indicators will dictate improve micro indicators itself. So at the moment Pakistan is going thru a correction phase where emphasize is clearly on the macro level and in a longer run its a better solution.

Working on micro level indicators while ignoring macro level stuff is always a temporary solution which previous Govts used to do hence the economy never took off over the years.

The CA is shrinking month by month so how can you predict that it will be same for next qtr??
 
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