The Accountant
PDF THINK TANK: ANALYST
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I am not sure that CAD is again going negative by such a big margin. May be it happen in short run but in long term and medium term lot of import substitution projects has started. For example cultivation of palm oil, invenstment in Dams to increase agriculture and local energy projects, and facilitation of exports.this temporary due to covid related low economic acitivty
i expect this to return into negative again
however, a negative 1-2% CAD is nothing to worry about
its a problem when goes upto 3-4+ %(or is projected to go up with no reserves as cushion , as economy is always forward looking)
summary of our problem is that govt "print notes" in last 18 months and drops interest rates to create fiscal space for heavy spending. The result is obvious low inflation, high imports, high CAD, high growth(which the govts sell as a success) though this inevitably causes a burst (fake money) which cancels al the growth we achieved
this tried and tested method has made PMLN & PPPP popular, so why wouldn't they do it again, they are our drug sellers and Pakistanis are their junkies
Let's see how things move forward. but you should remember that CAD even in Jan and Feb was very low.