Pakistan Economy $313 Billion in 2017 : IMF

[Alternative]

GDP is undoubtedly the best aggregate measure of economic activity for a country, primarily because it represents the total dollar value of all goods and services produced over a specific time period.

To put it simply if we consider a home was a country; total income of its residents whether in cash or in kind or in the form of goods obtained in exchange for the labour performed would be its GDP.

However, one thing to remember is that size of the national GDP tells us little about over all or individual economic welfare or general living conditions. For example should the total output increase at the same rate as the population, there is likely to be no resultant rise in our material well-being. Therefore before we start jumping with joy, let us wait for the population numbers.

One must think about the 'parallel economy', that is, undocumented economy of Pakistan: Legit businesses nowhere accounted for.
Estimates ranges from 30% to more than 100% of documented sector..............
You can read the views of Chief of Institute of Chartered Accountants of Pakistan on Business Recorder below
http://fp.brecorder.com/2016/05/2016051345400/
If you search you will find foreign sources on undocumented sector of Pakistan Economy also.

And we can corroborate this, rather easily, if we compare some key information with other Country, say, Bangladesh. IMF say Bangladesh's GDP is $270 Billion.
For example, Petroleum consumption, you will find that Pakistan Consumes for than 3 times the Bangladesh.
http://www.theglobaleconomy.com/rankings/oil_consumption/

Number of registered vehicles total
http://apps.who.int/gho/data/node.main.A995
In Bangladesh some 21062 cars were registered in year 2015,http://www.dhakatribune.com/bangladesh/2016/09/22/quader-will-fix-number-cars-family-can/
and in Pak Suzuki alone produced more than 134,000 motor cars, not counting other manufacturers and imports.
Check the natural gas consumption figures of Pakistan which is about double of Bangladesh.
Check the Electricity production and consumption figures too.

 

[UKBengali]

One must think about the 'parallel economy', that is, undocumented economy of Pakistan: Legit businesses nowhere accounted for.
Estimates ranges from 30% to more than 100% of documented sector..............
You can read the views of Chief of Institute of Chartered Accountants of Pakistan on Business Recorder below
http://fp.brecorder.com/2016/05/2016051345400/
If you search you will find foreign sources on undocumented sector of Pakistan Economy also.

And we can corroborate this, rather easily, if we compare some key information with other Country, say, Bangladesh. IMF say Bangladesh's GDP is $270 Billion.
For example, Petroleum consumption, you will find that Pakistan Consumes for than 3 times the Bangladesh.
http://www.theglobaleconomy.com/rankings/oil_consumption/

Number of registered vehicles total
http://apps.who.int/gho/data/node.main.A995
In Bangladesh some 21062 cars were registered in year 2015,http://www.dhakatribune.com/bangladesh/2016/09/22/quader-will-fix-number-cars-family-can/
and in Pak Suzuki alone produced more than 134,000 motor cars, not counting other manufacturers and imports.
Check the natural gas consumption figures of Pakistan which is about double of Bangladesh.
Check the Electricity production and consumption figures too.

These stats mean nothing.

1. Pakistan has more total wealth than BD since it has had higher GDP/capita till now. It is a bit like the difference in wealth between an engineer who has been earning 100,000 US dollars a year for 5 years and another that has been promoted and also earns 100K dollars US.

2. BD actively discourages car use and puts massive import duty and so cars are so much more expensive in BD rather than in Pakistan. This also leads to lower oil consumption due to less demand for petrol in BD.

3. A lot of industry in BD generates their own electricity and so the figure from power stations is not the actual amount of generation that takes place.

 

[Alternative]

These stats mean nothing.

1. Pakistan has more total wealth than BD since it has had higher GDP/capita till now. It is a bit like the difference in wealth between an engineer who has been earning 100,000 US dollars a year for 5 years and another that has been promoted and also earns 100K dollars US.

2. BD actively discourages car use and puts massive import duty and so cars are so much more expensive in BD rather than in Pakistan. This also leads to lower oil consumption due to less demand for petrol in BD.

3. A lot of industry in BD generates their own electricity and so the figure from power stations is not the actual amount of generation that takes place.

Bangladesh figure were taken to make a point on 'parallel economy' of Pakistan, not to make a point on Bangladesh.
Current yearly consumption of Petroleum, natural gas, electricity, vehicle production matters etc etc matters and are very relevant.
Total registered cars in Bangladesh in 2014 was about 2 Million, and total registered vehicles in Pakistan were more than 9 million in 2010.
http://apps.who.int/gho/data/node.main.A995
But I didn't stressed above point in my last post; I mention that in 2015 in Bangladesh about 21000 vehicles were registered and a single manufacturer Pak Suzuki sold more that 134,000 cars....
Not historical but current production consumption data, easily verifiable.
and dear, do you know how much worth of Electricity Generators the Pakistani private sector Companies imports per year for last many years?.... let me appraise you that due to long power outages by WAPDA entities (Production, transmission and distribution), now any company worth its salt can survive without Wapda, but at a hefty cost: the electricity would be much costlier.

All these petroleum, natural gas, electricity consumption for what...................
Curbs on transportation has no relevance in this analysis. If you are discouraging imports that why are not producing or assembling vehicles? remember this discussion is about GDP.

 

[Nilgiri]

All these petroleum, natural gas, electricity consumption for what...................
Curbs on transportation has no relevance in this analysis. If you are discouraging imports that why are not producing or assembling vehicles? remember this discussion is about GDP.

Also look at their consumption of public transport and commercial vehicles (both capex and opex)....it is very puny.

For example:

https://www.brta.gov.bd/images/statistics-bd-sept-16.pdf

The argument of discouraged private transport (cars etc) falls flat when you look at the bigger picture.

 

[Alternative]

Also look at their consumption of public transport and commercial vehicles (both capex and opex)....it is very puny.

For example:

https://www.brta.gov.bd/images/statistics-bd-sept-16.pdf

The argument of discouraged private transport (cars etc) falls flat when you look at the bigger picture.

So, what in your opinion is the secret of GDP of $270 Billion of Bangladesh?

 

[Nilgiri]

So, what in your opinion is the secret of GDP of $270 Billion of Bangladesh?

What secret? There is no secret here. They have low PPP (physical consumption) because they have lower development of internal economy (can look up their rating on logistics index for example). Thus extrapolating the Taka exchange rate with USD to their entire economy is quite flawed (but their people on this forum think its the be all end all). In 10 years time there can be some conversation started regarding where they stand then....their investment ratio will have had some time to play a role by then and we can see what quality it was at (capacity provision wise).

 

[Alternative]

What secret? There is no secret here. They have low PPP (physical consumption) because they have lower development of internal economy (can look up their rating on logistics index for example). Thus extrapolating the Taka exchange rate with USD to their entire economy is quite flawed (but their people on this forum think its the be all end all). In 10 years time there can be some conversation started regarding where they stand then....their investment ratio will have had some time to play a role by then and we can see what quality it was at (capacity provision wise).

Sorry, I am at a loss here.
Higher GDP means, higher purchasing power for the populace, given that distribution of wealth will be some what skewed, some segments will get larger share. What were the consumption habits of Indians when India's per capita GDP was $1575 a few year ago? Huge appetite for goods for all kinds, this trend is not visible in Bangladesh's case.
If Taka is overvalued against dollar, and its some what become evident if we compare nominal PPP per capita GDP figures; it would still translate that goods would/should be cheaper in Bangladesh, hence support higher consumption. Which is clearly not the case.
So there is a SECRET................

 

[volatile]

World bank study is important to even identify white economy rest for black economy we need another studies ,Now for studies related to consumption data`s e.g major manufacturers in Pakistan show low production just to save taxations

 

[ziaulislam]

our GDP nominal and PP are way different i.e hence re basing is needed(purchasing power parity)

with rebasing and + adding undocumented economy GDP should cross 400 by end of next year
but having said 20 crore population means that our peer capital position is continuously falling and we have miserable situation in HDI

 

[PAKISTANFOREVER]

These stats mean nothing.

1. Pakistan has more total wealth than BD since it has had higher GDP/capita till now. It is a bit like the difference in wealth between an engineer who has been earning 100,000 US dollars a year for 5 years and another that has been promoted and also earns 100K dollars US.

2. BD actively discourages car use and puts massive import duty and so cars are so much more expensive in BD rather than in Pakistan. This also leads to lower oil consumption due to less demand for petrol in BD.

3. A lot of industry in BD generates their own electricity and so the figure from power stations is not the actual amount of generation that takes place.

We couldn't care less about bangladesh or it's economy. It is a nation we have absolutely nothing in common with, 1000s of kms away from us. You may as well bring up the details of the Zulu economy. It's that ridiculous. If you're interested in the economy of bangladesh go to a bangladeshi forum. Don't come here.

 

[Zee-shaun]

Why are we discussing BD economy here?

 

[Nilgiri]

Sorry, I am at a loss here.
Higher GDP means, higher purchasing power for the populace, given that distribution of wealth will be some what skewed, some segments will get larger share. What were the consumption habits of Indians when India's per capita GDP was $1575 a few year ago? Huge appetite for goods for all kinds, this trend is not visible in Bangladesh's case.
If Taka is overvalued against dollar, and its some what become evident if we compare nominal PPP per capita GDP figures; it would still translate that goods would/should be cheaper in Bangladesh, hence support higher consumption. Which is clearly not the case.
So there is a SECRET................

Taka is not "overvalued" per se (hard to find that for any developing economy), its just less under-valued than PKR and INR...because their (BD) export basket is a lot narrower and focused (RMG) esp compared to their import basket (capital goods, fuel, engineering items, electronics etc)

That in itself has pros and cons...but in BD case more cons because it hides the low realised (on the ground) consumption they actually have (by extrapolating demand/supply of Taka internationally to their entire demand/supply of economy in nominal USD calculation). This only becomes more accurate to do when a country becomes broad-based and integrated with the world economy (like say China).

Otherwise its not really a secret really, its more of an artefact of narrow export base being applied (for extrapolation to) to a largely insulated domestic developing economy.

So yes you are right both India and Pakistan would definitely have much different total per capita consumption of steel, cement, oil, rubber etc etc when they were at even 1000 USD nominal per capita compared to BD. They never really had that "one" product that they pushed in (with help of LDC status to get low tariff access) to create a somewhat artificially higher ratio of demand/supply for their currency overseas compared to that found domestically. Neither does BD have a broader base of exports like China to make their higher nominal/PPP ratio a valid argument of higher development either. One trick pony versus thoroughbred argument essentially.

 

[Major Sam]

Taka is not "overvalued" per se (hard to find that for any developing economy), its just less under-valued than PKR and INR...because their (BD) export basket is a lot narrower and focused (RMG) esp compared to their import basket (capital goods, fuel, engineering items, electronics etc)

That in itself has pros and cons...but in BD case more cons because it hides the low realised (on the ground) consumption they actually have (by extrapolating demand/supply of Taka internationally to their entire demand/supply of economy in nominal USD calculation). This only becomes more accurate to do when a country becomes broad-based and integrated with the world economy (like say China).

Otherwise its not really a secret really, its more of an artefact of narrow export base being applied (for extrapolation to) to a largely insulated domestic developing economy.

So yes you are right both India and Pakistan would definitely have much different total per capita consumption of steel, cement, oil, rubber etc etc when they were at even 1000 USD nominal per capita compared to BD. They never really had that "one" product that they pushed in (with help of LDC status to get low tariff access) to create a somewhat artificially higher ratio of demand/supply for their currency overseas compared to that found domestically. Neither does BD have a broader base of exports like China to make their higher nominal/PPP ratio a valid argument of higher development either. One trick pony versus thoroughbred argument essentially.

can you please explain in layman way. I didn't get it.

wat i believe is more GDP per Cap will translate into more consumption in all the sectors any developing economy needs. From Electricity to Food consumption is way low in comparison with Pak or India but their GDP is quite comparable in per capita. Hows thats possible.

one more thing @Nilgiri their Govt. Revenue us around 20B but their budget is around 45B. How they generate this remaining money while they still have fiscal deficit.

 

[Nilgiri]

can you please explain in layman way. I didn't get it.

wat i believe is more GDP per Cap will translate into more consumption in all the sectors any developing economy needs. From Electricity to Food consumption is way low in comparison with Pak or India but their GDP is quite comparable in per capita. Hows thats possible.

one more thing @Nilgiri their Govt. Revenue us around 20B but their budget is around 45B. How they generate this remaining money while they still have fiscal deficit.

Basically if you go all in exporting just one product....but you import (and also domestically consume) a much wider selection....the demand/supply of your currency gets skewed in forex market. Thus applying that demand/supply (i.e nominal exchange rate) to your whole economy on 1:1 basis becomes flawed.

Its also seen in many economies that export say 1 or 2 cash crops, or are heavy energy exporters etc (though BD not as bad scenario since there is some manufacturing value addition in RMG at least). Their (local) people dont spend all their own money on these cash crops or all their money on energy etc or in BD case all on RMG internally....thus how much US dollar each of their currency buy on forex market is not accurate to use as exchange rate for whole economy (i.e international consumers are not demanding the majority of what the locals consume as individuals). It becomes more accurate when you export much more closely to what you consume internally (like say developed countries and China increasingly).

Why this exactly happens is more advanced topic, has to do with money velocities regarding demand/supply of goods/services and ultimately boils down to certain "imperfections" of how markets operate ever since dawn of humanity. Closest (detailed) studies of that were done when eastern europe transitioned from socialist, centralised economies to open market ones (given hub-spoke model they operated within themselves and with soviet union) as cold war ended. With developing countries, its more just accepted rather than extensively gathering data on it (unfortunately you need an economy to collapse to get good data on this stuff, similar to not being able to determine momentum and position of particle simultaneously in physics).

As your export diversity widens, accuracy of nominal exchange rate of USD (or using any major international currency for that matter) is much improved.....but that takes much time. Hence PPP more accurate overall.

wat i believe is more GDP per Cap will translate into more consumption in all the sectors any developing economy needs. From Electricity to Food consumption is way low in comparison with Pak or India but their GDP is quite comparable in per capita. Hows thats possible.

Hope its explained now somewhat. Basically narrow trade (either volume and make-up, or both) means narrow applicability of nominal exchange rate in a currency you do not print (rather trade your own for internationally).

Just remember only the US prints (more correctly produces) US dollar. How much demand/supply of your currency internationally w.r.t USD/other currencies based on demand/supply of goods/services produced is never 100% reflective of your internal situation of demand/supply of goods/services. Closest country that comes to that would be US itself (even it would not be 100% given existence of large pools of it outside its borders and the artefacts that produces on the US itself, kind of like the small perturbing a moon has on the planet it orbits due to gravity).

The more developed a country is, the closer it would also (theoretically) be to 100% (or coefficient of 1) in USD nominal GDP per capita. Conversely the less developed, the less accurate....given development these days is highly correlated with integration with the world economy.

one more thing @Nilgiri their Govt. Revenue us around 20B but their budget is around 45B. How they generate this remaining money while they still have fiscal deficit.

Essentially they (govt) will have to borrow it, either domestically or internationally. Issue bonds etc.

Fiscal deficit is literally the result of this (spending more than you collect). Each year whatever the difference between the two is the deficit or surplus (collecting more than you spend). Balanced budget = 0 (or near zero) difference.

 

[ziaulislam]

They are your Islamic brothers and your former country man until 1971, You have more in common with them than any nation on earth.

You people call chinease and Turks brothers....... BUT your real brothers are Bangladeshis

That was over when they stabed you in the back and are keeping doing it even today by teaching extremism to their citizens when it comes to Pakistan