Is Pakistani economy entering recession?

[Rank]

if ASIANS want peace in south Aisa... CUT OFF - KICK of USA from each n everything ....

"eek gandi machli poray telaab ko ganda karti hey" thats what USA! in ASIA

 

[Hutchroy]

Is economy entering recession? | Pakistan | News | Newspaper | Daily | English | Online

Agreed, that some of the macro-indicators in Pakistan are showing healthy trends or resilience, exports are up, current account deficit is down, remittances are climbing, reserves are stable and the Pak Rupee is holding out, but gauging from the manufacturing and productivity figures over the last two quarters could Pakistan’s economy be finally sliding into a serious recession?

Riding on the back of some positive figures, the economic managers have thus far not only been blowing their own trumpet of success, but also literally ignoring and mocking their critics, who have tried to draw their attention to the missed opportunities and rather weak economic scaffolding that can simply crumble one day without warning like a house of cards!

Based on industrial production and productivity (especially in the small and medium enterprise sector) Pakistan’s economy contracted by nearly 4 percent - much more than expected - for at least two quarters running now, which basically means that technically we have already entered recession.

Going by this, the big question actually should be that does the country have the political and economic will to fight its way out? The data underlines how the worst natural disaster (floods) to hit Pakistan in decades has foiled all hope of recovery and how the government’s addiction to borrow and the absence of visionary economic policies have contributed to the decline leaving the country in a vicious trap of high debt and a low growth amidst a rapidly rising population.

The global scenario is not helping either. Serious downturns both in the United States (where the predictions of recovery continue to be proven wrong) and the Western European economies, the two main markets for Pakistani goods, mean that the coming months for Pakistani exporters will be even tougher.

All political endeavours on ‘trade not aid’ and preferential ‘market access’ in lieu of our help in the war on terror have also not been fruitful so far. What this basically tells us is that to avoid sinking we need to look inwards and start taking our own measures to embark on a path of economic recovery before the recession turns into an economic quicksand. Time and again, I have pointed out to the examples of China, India and Bangladesh, who have consciously maintained focus on manufacturing at home as their ticket to sustained economic activity and job creation.

To help keep their engine of the industry running all related state and private sector institutions, banking/financial, power and energy, human resource, commerce and trade, have played their due role.

Here is the Second Page of the Article :

Is economy entering recession? | Pakistan | News | Newspaper | Daily | English | Online

Our story, on the other hand, has been different, which is basically a tale of shooting ourselves in the foot. Politics yet again has taken precedence over the larger national interest. The country’s economic progress is being compromised by an unwise energy distribution portfolio that has less to do with maximising national industrial output and raising its productivity, and more to do with a political tug of war and skewed priorities, which give preference to consumer goodsover ventures that generate growth and employment. For example, Punjab, which accounts for the bulk of Pakistan’s industrial base goes without gas for three days a week and with no electricity for nearly 8 to 10 hours per day.

Inefficiencies in the management of the oil and petroleum sector are not only the principal factor fuelling inflation, but also significantly adding to the transportation/communication woes of the country. The world of oil is getting complex and gone are the simpler days of a routine differential movements between the Brent and the WTI. Today’s dynamics demand shrewd reading of the evolving oil basket along with displaying sound technical skills in determining a requirement-mix that optimises cost benefits: Too much to expect perhaps from a doctor of medicine. With state-controlled communications - Railways, PIA, NLC and PNSC already in doldrums - the acute shortages and prevailing uncertainty in the oil and petroleum sectors are making businesses and people suffer adversely. The age old saying in economics is, “you strangulate movement, you strangulate economy.” Adam Smith.

The bonanza in exports’ growth may also be coming to an end or may have already come to an end. Surge in the global cotton prices and a high demand cycle in textiles - the main driver of growth in Pakistani exports - have both tapered off over time. With an increased acreage (worldwide) allocation to cotton plantation, the cotton prices in 2011-12 are not likely to show the trend witnessed in 2010-11 and owing to a depressed global textile demand, a problem compounded by Pakistan’s growing uncompetitiveness due to its rising costs of production, I will not be surprised if we instead see a declining graph in exports over the next 12 months. As for the growth in exports in other sectors like, services, furniture, information technology, tourism, etc., a) the base is so brittle that the slightest change in the international perception or country outlook can erode it, and b) one is not too sure of the figures because one fails to see that how, for example, tourism could have registered an increase!

Resolving not to borrow or not to accept aid or to solely concentrate on domestic opinions while ignoring global concerns may all sound politically very romantic, but economic prudence requires us to be as much engaged with the developed world as possible, albeit without compromising on self-interest. Even token borrowings carry intangible advantages relating to passing financial stress tests that in turn open doors to other financial undertakings, ratings and perceptions, and most importantly, being in the loop to be able to capitalise on an opportunity as and when one arises.

The investors who only a few years back were pouring money and investment into Pakistan are now pausing and saying, where is Pakistan heading in terms of investment opportunities, the corruption challenge and inflation? Investments move and shake when there is ‘profit’ in the markets and regrettably due to management/governance issues the ‘profitability’ per se has been sucked out of the Pakistani markets. It was rather ironic, when last month I was told by a US businessman in my face that he prefers Afghanistan as an investment destination over Pakistan. His reasoning, simple: “There may be higher risks, but at least the returns are great.” Ask a Japanese and he or she would tell you that recession needs to be feared because it is a very slippery slope. For nearly a proverbial decade now, they have been trying to come out of it. And mind you this is the Japanese we are talking about. As for us, to even stand a chance to avoid the looming economic breakdown, things on our economic front need to change; that too change big and quickly!

The writer is an Entrepreneur and an Economic Analyst.

Email: kamalmannoo@hotmail.com.

 

[farhan_9909]

Before USA gate crashed Afghanistan..your economy was flat ..growing at 2%.. not very different from situations these days.
It is only after USA gatecrashed Afghanistan and American money started flowing into Pakistan , your debts were written off, sanctions removed.. that your economy picked up ..alas the temporary high economic growth was but a bubble which burst at first signs of global recession leading to the situation now.

either your innocent my friend or a ignorent.keep this in my future that pakistan economy was growing with 7-8% growth till 2005 and even after the massive earth quake we were able to achieve 7% growth even in 2007.but due to too much terrorism and instability in pakistan our growth rate is infront of you.before the WOT we were growing with economy growth only 2nd to china.i cant give you the link because i am from mobile but go to google and search that china has got a new growth challenger.their you will see that pakistan was growing with 8.4% and china with around 9% and india growth rate was 7.9%.so this prove that before the us aid and before the WOT START we were growing many times better than now and i have personally calculated the gdp by average 7% growth rate and i found my result 228bn usd till 2011 june.and look now we are standing at 192bn usd.so because of usa we started wot and in return we lost not only billions of dollar not just the economic growth.wo lost our image.we got the title of a terrorist nation.↲whatever but we will bring pakistan back to the 2005 like pakistan.InshALLAH

 

[Abhishek_]

if ASIANS want peace in south Aisa... CUT OFF - KICK of USA from each n everything ....

"eek gandi machli poray telaab ko ganda karti hey" thats what USA! in ASIA

I never heard Pakistanis sing this tune during the cold war days...so why the hurried reversal?

 

[kawaraj]

end the war.

investment will just jump in. believe it or not, let's see. No need argue with them, they just want to drag down this country.

what are those indians saying of the Mumbai attack? "we should bold out as peaceful as possible next day, otherwise it could affect our ecomony.." well, think the same of our country. we want peace and development too.

 

[desiman]

1)Kick the US out
2) Get over Kashmir and form strong relations with India
3) Dont let religion overpower democracy.


Do these and nothing can stop Pakistan from growing again.

 

[great]

either your innocent my friend or a ignorent.keep this in my future that pakistan economy was growing with 7-8% growth till 2005 and even after the massive earth quake we were able to achieve 7% growth even in 2007.but due to too much terrorism and instability in pakistan our growth rate is infront of you.before the WOT we were growing with economy growth only 2nd to china.i cant give you the link because i am from mobile but go to google and search that china has got a new growth challenger.their you will see that pakistan was growing with 8.4% and china with around 9% and india growth rate was 7.9%.so this prove that before the us aid and before the WOT START we were growing many times better than now and i have personally calculated the gdp by average 7% growth rate and i found my result 228bn usd till 2011 june.and look now we are standing at 192bn usd.so because of usa we started wot and in return we lost not only billions of dollar not just the economic growth.wo lost our image.we got the title of a terrorist nation.↲whatever but we will bring pakistan back to the 2005 like pakistan.InshALLAH

Buddy we are talking about before 2001. Pakistan was growing at 2-3% in 90's. Also some might argue that Musharaff fudged some numbers but we don't want to go there.

 

[Windjammer]

 

[AZADPAKISTAN2009]

1)Kick the US out
2) Get Kashmir and form strong relations with India give them srilanka as gift
3)Get rid of democracy and hang Bilawal just for sake of making a point


Do these and nothing can stop Pakistan from growing again.

 

[Abhishek_]

1)Kick the US out
2) Get Kashmir and form strong relations with India give them srilanka as gift
3)Get rid of democracy and hang Bilawal just for sake of making a point


Do these and nothing can stop Pakistan from growing again.

you should try stand up comedy

 

[ares]

either your innocent my friend or a ignorent.keep this in my future that pakistan economy was growing with 7-8% growth till 2005 and even after the massive earth quake we were able to achieve 7% growth even in 2007.but due to too much terrorism and instability in pakistan our growth rate is infront of you.before the WOT we were growing with economy growth only 2nd to china.i cant give you the link because i am from mobile but go to google and search that china has got a new growth challenger.their you will see that pakistan was growing with 8.4% and china with around 9% and india growth rate was 7.9%.so this prove that before the us aid and before the WOT START we were growing many times better than now and i have personally calculated the gdp by average 7% growth rate and i found my result 228bn usd till 2011 june.and look now we are standing at 192bn usd.so because of usa we started wot and in return we lost not only billions of dollar not just the economic growth.wo lost our image.we got the title of a terrorist nation.↲whatever but we will bring pakistan back to the 2005 like pakistan.InshALLAH

You neither have the correct facts nor sufficient knowledge to comprehend what I have written.

1. Pakistani growth rate has never..I repeat not once triumphed India's in last 8 yrs.
India GDP - real growth rate - Economy
Pakistan GDP - real growth rate - Economy

2. Before WOT (ie 2001-02 ) you were sanctioned ..and your average growth rate over last 3 yrs was 2.4%.

3. Your growth rate took an upswing in year 2003-04 ..because sanctions were removed, your International debt was written off/rescheduled and you stared receiving more than $1.5 Billion/ yr economic and military aid.
http://www.fas.org/sgp/crs/row/pakaid.pdf

4. Your economy crashed yr 2008-09 was mainly because of global recession and sky high crude prices and as your economy wasn't resilient enough to cope with the recession(unlike India and China). Offcoures expansion of suicide attack to Pakistani cities was one of the reasons but a secondary one. You can ask why.

 

[Avatar]

you should try stand up comedy

Humor is automatic when you live so close to the world's source of poppy.

 

[IFB]

Humor is automatic when you live so close to the world's source of poppy.

lol........................

 

[praful]

Pakistan is in a deep mess..... Political stability is the key....

 

[blain2]

How can an economy that is perpetually in recession go into recession? Pakistan's saving grace is the undocumented economy that is never in recession and essentially carrying the population forward.