Economy growth: Pakistan set to miss target for second year

[The Great One (Mod ver)]

some of the projects have been earthbreaked , some of those will be earth breaked during later part of this year . Timeline of completion of different projects is different, like sahiwal 1320 mwt and port Qasim 1320 mwatts will be ready by end 2017, nuclear projects 2200 mwts in Karachi will be ready by 2019, Thar coal mining will be ready by 2017 , similarly every project can have different timelines while in short 10,400 mwtts power will be ready by 2018. CPEC will be done in phases and will take a little longer to complete it to full map.

Those are the completion dates. Do you have timelines for the different phases.

 

[ito]

Pakistan has never stopped growing. Since 1947 there is only a single year where Pak economy went into recession (1958 or 1959 perhaps). There are few reasons people often overlook but they keep economy growth going.

1. Undocumented economy which makes for two third of our economy. No figures come out of it but it is always growing.

2. Undocumented inflow of remittances. Not good for government and documented economy but foreign cash flows in lot more than it shows. Population invests this cash into economy again mostly undocumented.

3. Natural resource to population ratio. From fertile lands to minerals, farm cattles to fisheries, nature has blessed Pakistan with too many resources and compared to its size population is not as dense as some other countries (India and Bangladesh for example). With correct policies, Pakistan can be turned around in half the time it will take for India. I call it our economic agility because our economy has to pull less weight.

4. Large number of expats vs total population resulting in good remittances. In numbers we are fraction of India but when you factor in population of both countries picture becomes clearer.

Pakistan has been and still is to some extent land of abundance. Despite wrong decisions Pakistan remains a growing economy though much less what could have been.

Your assumptions are too wild and too much on Undocumented economy, Undocumented inflow of remittances....etc

 

[farhan_9909]

Arre pappu. Sorry if u misunderstood me. I meant how can only in 6-7 years ur GDP nominal increased twice only with 3.5-4% real growth.

how do u explain that? Thats my query.

Indian GDP from 2002-08 also increased like this.

E.g

Indian GDP 2002=523Billion dollars
Indian GDP 2003=618Billion dollars
Indian GDP 2004=721Billion dollars

Increase in
2002-03=18%
2003-04=16%

But officially announced growth rate was 7.5% and 7.2%.So this happens with all the developing countries including Pakistan,india or China

International Monetary Fund, World Economic Outlook-Google Public Data Explorer

 

[Paksanity]

Your assumptions are too wild and too much on Undocumented economy, Undocumented inflow of remittances....etc

We see it happening all around us everyday.

Arre pappu. Sorry if u misunderstood me. I meant how can only in 6-7 years ur GDP nominal increased twice only with 3.5-4% real growth.

how do u explain that? Thats my query.

Apology!

 

[ito]

We see it happening all around us everyday.



Apology!

What I mean is that most under developing countries and developing countries do have significant underground economy. But world bank and other organizations do make adjustments for that. It is not like underground economy is totally not accounted for.

 

[Paksanity]

What I mean is that most under developing countries and developing countries do have significant underground economy. But world bank and other organizations do make adjustments for that. It is not like underground economy is totally not accounted for.

They would have but my guess is it's larger than their estimates. Weak governance has led people to invest in that form of economy more than formal one.

 

[ziaulislam]

Arre pappu. Sorry if u misunderstood me. I meant how can only in 6-7 years ur GDP nominal increased twice only with 3.5-4% real growth.

how do u explain that? Thats my query.

to make it easy to simple, actual GDP growth=real GDP growth+inflation+a few more minor criteria
now for example if your growth is 4% and infaltion is 6%=4+6=10

70/10=7 years doubling time i.e economy doubles in nominal GDP after 7 years, provided your rupee doesn't devalues

They would have but my guess is it's larger than their estimates. Weak governance has led people to invest in that form of economy more than formal one.

over estimating informal econmy is a good type of defense mechanism against inefficiency and sour reality !

Indian GDP from 2002-08 also increased like this.

E.g

Indian GDP 2002=523Billion dollars
Indian GDP 2003=618Billion dollars
Indian GDP 2004=721Billion dollars

Increase in
2002-03=18%
2003-04=16%

But officially announced growth rate was 7.5% and 7.2%.So this happens with all the developing countries including Pakistan,india or China

International Monetary Fund, World Economic Outlook-Google Public Data Explorer

its real growth +inflation=nominal growth
PP growt=real growth only

see nominal growth is when you compare with rest of the world and PP growth is the actual adjusted value through different formulas

for layman to understand this, if you produce 1 kg potatoes which is valued at 50 rs so your GDP is 50, next year if 1 kg of potato price is 60 rs the same potatoes will give a GDP of 60, an increase through inflation with no real growth.

 

[ZooZoo]

The Inflation is adjusted and then the GDP growth is calculated.. It may happen that the country GDP growth is 20% but inflation is 14%, so the growth is 6%...

There are many other factors to calculate the GDP growth.. So its not 1+1=2....

 

[WAR-rior]

to make it easy to simple, actual GDP growth=real GDP growth+inflation+a few more minor criteria
now for example if your growth is 4% and infaltion is 6%=4+6=10

70/10=7 years doubling time i.e economy doubles in nominal GDP after 7 years, provided your rupee doesn't devalues


over estimating informal econmy is a good type of defense mechanism against inefficiency and sour reality !


its real growth +inflation=nominal growth
PP growt=real growth only

see nominal growth is when you compare with rest of the world and PP growth is the actual adjusted value through different formulas

for layman to understand this, if you produce 1 kg potatoes which is valued at 50 rs so your GDP is 50, next year if 1 kg of potato price is 60 rs the same potatoes will give a GDP of 60, an increase through inflation with no real growth.

Ya. Even I understood that way. Was just confirming. Means Pakistan's nominal growth is only inflation based growth. Which means nothing concrete as of doubling the economy has been seen in past 7 years.

This only shows Pakistan now needs to completely focus on PPP GDP and hence the real growth. Let hope it works for u guyz.

Indian GDP from 2002-08 also increased like this.

E.g

Indian GDP 2002=523Billion dollars
Indian GDP 2003=618Billion dollars
Indian GDP 2004=721Billion dollars

Increase in
2002-03=18%
2003-04=16%

But officially announced growth rate was 7.5% and 7.2%.So this happens with all the developing countries including Pakistan,india or China

International Monetary Fund, World Economic Outlook-Google Public Data Explorer

Ya I always knew it. Thats the biggest confusion nominal GDP portray.

What do u understand by this? that nominal GDP is never the measured GDP its only calculated by weighing in inflation and monetory factors. Hence, developing countries hsud always focus on PPP growth coy thats the real indicator of health of an economy. U can always improve ur nominal GDP by accounting inflation but then people will die out of hunger.

 

[farhan_9909]

Ya. Even I understood that way. Was just confirming. Means Pakistan's nominal growth is only inflation based growth. Which means nothing concrete as of doubling the economy has been seen in past 7 years.

This only shows Pakistan now needs to completely focus on PPP GDP and hence the real growth. Let hope it works for u guyz.


Ya I always knew it. Thats the biggest confusion nominal GDP portray.

What do u understand by this? that nominal GDP is never the measured GDP its only calculated by weighing in inflation and monetory factors. Hence, developing countries hsud always focus on PPP growth coy thats the real indicator of health of an economy. U can always improve ur nominal GDP by accounting inflation but then people will die out of hunger.

Sir,Apart from my basic interest in economy related activities i don't know much about economics.My field is medical

 

[WAR-rior]

Sir,Apart from my basic interest in economy related activities i don't know much about economics.My field is medical

He He. So what. Its always good to have interests outside ur field. I am an Elec & Telecomm Engineer and then did my MBA in Marketing and Strategy and have interests in Economics. And why stop urself only to economics? Get into something else too. More the knowledge, better the personality u become.

 

[ziaulislam]

Sir,Apart from my basic interest in economy related activities i don't know much about economics.My field is medical

really which year or are you done? coz my field is medicine too

 

[WAR-rior]

really which year or are you done? coz my field is medicine too

Saale. Sab doctors ko economics ka bhoot chadha hai?

 

[ziaulislam]

Ya. Even I understood that way. Was just confirming. Means Pakistan's nominal growth is only inflation based growth. Which means nothing concrete as of doubling the economy has been seen in past 7 years.

This only shows Pakistan now needs to completely focus on PPP GDP and hence the real growth. Let hope it works for u guyz.


Ya I always knew it. Thats the biggest confusion nominal GDP portray.

What do u understand by this? that nominal GDP is never the measured GDP its only calculated by weighing in inflation and monetory factors. Hence, developing countries hsud always focus on PPP growth coy thats the real indicator of health of an economy. U can always improve ur nominal GDP by accounting inflation but then people will die out of hunger.

exactly thats why they call it "real GDP growth" and we only see at those figures
there is limit to which nominal GDP will grow eventually it will cause devaluation of your money.
for example you simply cannot hope to jack up the price of tomatoes to 1000s/kg , its simply not rational, if you do so it simply means your rupees has devalued and hence adjusted to dollars it becomes the same.

so inflation has a limit. we saw rapid inflation in previous govt era but that was due to oil prices and after decade of very low inflation

 

[farhan_9909]

He He. So what. Its always good to have interests outside ur field. I am an Elec & Telecomm Engineer and then did my MBA in Marketing and Strategy and have interests in Economics. And why stop urself only to economics? Get into something else too. More the knowledge, better the personality u become.

Good