The remarkable recovery!

[TheSnakeEatingMarkhur]

Any thoughts on how to reduce the prices of essential goods short term? My suggestion of state driven over-supply to force down market prices is a no-go, the state doesn't have the courage or the political support to do such a thing.

Only way is subsidies but in long term its a death as subsidies will be given with loan money

 

[313ghazi]

Only way is subsidies but in long term its a death as subsidies will be given with loan money

Subsidies are a non starter. It's wasted money. Any solution needs to be sustainable.

 

[ziaulislam]

Dr. Shahid Masood has raised a very important point. Which countries are importing these rising exports, given that the world economy is contracting due to COVID-19. It is a good question, but I will be the first to point out that essentials such as clothing are always in demand, especially when people tend to hoard up out of fear of lockdowns. It would be good to have a detailed view into these rising exports.

Exports rose to lower value bcause of low prices and demand
But once economy picks up you will see a rpaid growth once values recover

Recovery in volume is much higher then value

Its basically amazing
I wasnt expecting an exports growth in first 3 years and everyone was projecting 30b target in 5 years (still a 33% increase) vs 20 % decrease in PMLN era

Subsidies are a non starter. It's wasted money. Any solution needs to be sustainable.

Solution is to increase economy activity and productivity rather then focusing on price

Ofcourse valgilant on cartal formation and other practices

 

[Goenitz]

Kill the middlemen!

Nah.. all protest in India is bcz of that and MSP

 

[CIA Mole]

Only solution is to work, produce and sell. That’s how you create profit.

Moving up the value chain require education.

 

[Goenitz]

can we ban imports for 5 years

it is better to ban export....as they export deliberately and they get subsidy to support industry (minimum support price type).. then import it when there is shortage..

 

[Clutch]

When I hear our media pundits discuss the state of Pakistan’s economy, I am stunned by their ignorance. During the past two years, Pakistan has made a remarkable recovery, but most people seem oblivious of this fact. It’s a simple and shocking story, based purely on numbers and maybe it remains obscured for this reason — numbers are boring.

In 2013, when Nawaz Sharif came to power, Pakistan’s imports of goods and services were around $48 billion and its exports of goods and services stood just over $31 billion. Remittances were approximately $13 billion and while the situation was precarious, as foreign exchange reserves were around $6 billion, the situation was manageable.

Over the next few years, under the PML-N) government, our imports skyrocketed to almost $68 billion — an increase of over 40%, while our exports stagnated and fell to $30 billion — a decline of 3%. Remittances increased to about $19 billion. For a country with extremely limited foreign exchange, this was suicide on steroids. The massive and growing imbalance between our exports and imports, should have forced the rupee to depreciate, but in a dangerous political move, the PML-N artificially maintained the rupee-dollar exchange rate between 100-110, bleeding the reserves of the State Bank of Pakistan (SBP). In the final two years of the PML-N government, the SBP reserves fell by more than half to around $9 billion, when Imran Khan became the Prime Minister.

In August of 2018, Pakistan was in the midst of a full blown economic catastrophe. A massive current account deficit, which when combined with our long-term financial debt obligations, created a hole of $25-30 billion, while the SBP had foreign exchange reserves of less than $10 billion. This impending financial disaster, resulted in Imran Khan’s infamous tours around the world to beg for financial help due to the criminal mismanagement of the economy by PML-N.

I am astonished that none of our anchors have ever bothered to question the financial geniuses belonging to PML-N about these numbers. How could they justify the increase in imports or the bleeding of the forex reserves by artificially maintaining an unsustainable exchange rate? What was their plan?

Anyway, when you need $20-30 billion and have less than $10 billion, what do you do? You beg, borrow and... And then you fix the mess, created by your predecessor. Reduce imports, increase exports, stop the bleeding of SBP reserves by artificially maintaining an overvalued exchange rate and pray for continued growth of remittances.

In two years, the government of Imran Khan achieved an unbelievable turnaround. Pakistan’s imports went down to $50 billion, a decline of $18 billion. Exports declined by $2 billion, to about $28 billion. Remittances crossed $23 billion, an increase of over $3 billion and SBP forex reserves have just crossed $12 billion. The PML-N left Pakistan with a current account deficit of almost $20 billion, while the PTI government is now expected to post a current account deficit of around $1-2 billion, in the current fiscal year. No one predicted such a quick turnaround, not even the IMF.

In essence, the PML-N government turned Pakistan into the Titanic, searched for the biggest iceberg and rammed into it, but somehow the PTI government has managed to turn the ship around and plugged the hole — a $20 billion hole. Unfortunately, this recovery, just like any recovery, came at a cost. In order to reduce imports and prevent the complete decimation of forex reserves at the SBP, the PTI had to end the delinquent exchange rate policy of PML-N. They allowed the depreciation of the currency, and the rupee-dollar exchange rate went from 110 to around 160, in a short period of time. This not only helped curb imports, by making them more expensive but helped the SBP boost its reserves.

Pakistan’s biggest import is oil and as the rupee depreciated, oil became expensive and this led to high inflation within the country. Inflation in Pakistan has always been closely linked to oil prices. For example, when the PPP came into power in 2008, oil prices increased from around $100/barrel to $150/barrel and Pakistan subsequently experienced double digit inflation. Similarly, when the PML-N came into power in 2013, average annual price of oil was around $100/barrel but by 2015 fell to about $50/barrel and PML-N was able to boast of low inflation below 5%. The double digit inflation being suffered by the PTI is again linked to the increase in oil prices, which was due to the depreciation of the rupee – a depreciation which was inevitable due to the inexcusable management of our imports and forex reserves by PML-N, especially in their final two years.

It is beyond belief that despite the availability of these harrowing figures, the PML-N continues to get a free ride in the media vis-à-vis their handling of the economy while the PTI is crucified for preventing a complete financial collapse.

I will conclude this article by stating that the economy is a large subject and the external sector, discussed above, is an important part of the picture but not the entire story. However, it was the criminal mismanagement of this sector that brought Pakistan to the brink of economic collapse, adversely affecting other variables such as inflation, growth and unemployment and the recovery in this sector is the most significant development for our economy, at the moment. It has laid the groundwork for achieving objectives related to growth, unemployment, and inflation over the coming years which would have been a pipe dream had the PTI failed to overcome this herculean challenge.

The remarkable recovery! | The Express Tribune

Pakistani media itself is also corrupt. DAWN news, Geo News etc. Etc. All are paid $$$$ to report #FakeNews at the behest of PML-Nutcases and PeePeePee....


That's the real reason.... Imran Khan refuses to bribe the Pakistani mainstream #FakeNews media

 

[Imran Khan]

Only solution is to work, produce and sell. That’s how you create profit.

Moving up the value chain require education.

TBH we pakistnais are lazy .including me . we buy real-estate and double our amounts .we dont want to make factories .

 

[CIA Mole]

TBH we pakistnais are lazy .including me . we buy real-estate and double our amounts .we dont want to make factories .

I do real estate too haha

 

[Imran Khan]

I do real estate too haha

billions of billions are struck in RE in pakistan . no one want to risk .

 

[Samlee]

Any thoughts on how to reduce the prices of essential goods short term? My suggestion of state driven over-supply to force down market prices is a no-go, the state doesn't have the courage or the political support to do such a thing.

Introduce Public Distribution System So That The Most Vulnerable Sections Of Society Can Get Food At Low Cost

Ultimately Set Up Cold Storage Because Half Of Our Vegetable Production Gets Spoiled Due To Lack of It.

Also Give A Revolving Credit To Farmers So That They Don't Have To Give Their Crop To Middlemen and Set Up Farmer's Markets

Some Ideas Just On The Top of My Head

 

[N.Siddiqui]

billions of billions are struck in RE in pakistan . no one want to risk .

Exactly, Real Estate speculation is one big reason for non availability of affordable housing, Private housing societies with the word 'luxury' need to be banned, taking up all the precious agriculture land.

Do we see such huge bungalows on 1000, 2000 sq.yds, 2,4 canals in Japan, Germany, China, France and other developed countries, over there functional, affordable housing is provided by govt, with bank loans with low mark-up...just starting in Pakistan with Naya Pakistan Housing scheme.

And they build institutions, commerce, industries, SEZ's, EPZ's, Tech. parks, big and small industrial complexes, R&D based institutions...and in Pakistan that was all missing.

Big bungalows and high end lifestyle needs to be curbed and banned rather, one reason for corruption.

 

[CIA Mole]

But real estate is true hedge against inflation

 

[xyxmt]

Any thoughts on how to reduce the prices of essential goods short term? My suggestion of state driven over-supply to force down market prices is a no-go, the state doesn't have the courage or the political support to do such a thing.

develop farmer's co-operative societies in order for farmer to take their products directly to market cutting the few middlemen

Exactly, Real Estate speculation is one big reason for non availability of affordable housing, Private housing societies with the word 'luxury' need to be banned, taking up all the precious agriculture land.

Do we see such huge bungalows on 1000, 2000 sq.yds, 2,4 canals in Japan, Germany, China, France and other developed countries, over there functional, affordable housing is provided by govt, with bank loans with low mark-up...just starting in Pakistan with Naya Pakistan Housing scheme.

And they build institutions, commerce, industries, SEZ's, EPZ's, Tech. parks, big and small industrial complexes, R&D based institutions...and in Pakistan that was all missing.

Big bungalows and high end lifestyle needs to be curbed and banned rather, one reason for corruption.

once you put "real property taxes" on luxury homes then and only then you will see the reduction in demand.
a 1000 sq yard home should have a yearly property tax of at least one million rupee.

 

[Aryeih Leib]

TBH we pakistnais are lazy .including me . we buy real-estate and double our amounts .we dont want to make factories .

don't pay taxes