Pakistan's GDP growth rate is even higher than that of China: Harvard study

[Homo Sapiens]

Pakistan’s predicted annual growth rate over the next 10 years is nearly 6 per cent, according to the revised growth projections presented by researchers at the Centre for International Development (CID) at the Harvard University.

This is a one-point GDP increase as in the CID’s earlier projections, Pakistan GDP was set to grow at 5 per cent by 2025.

Although China’s huge economy (current GDP at $12 trillion) cannot be compared with that of Pakistan (current GDP at $300 billion), Pakistan’s 5.97 per cent growth rate is above that of China, which is set to grow by 4.41 per cent.

Pakistan’s 5.97 per cent growth rate is above China, which is set to grow by 4.41 per cent. PHOTO: THE ATLAS OF ECONOMIC COMPLEXITY, 2015. HARVARD CID

Led by Harvard Kennedy School, the research is called ‘The Atlas of Economic Complexity’.

The CID’s growth projections are based on the measures of each country’s economic complexity, which captures the diversity and sophistication of the productive capabilities embedded in its exports and the ease with which it could further diversify by expanding those capabilities.

According to the Harvard study, the economic complexity not only describes why countries are rich or poor today, but can also predict future growth — about five times more accurately than the World Economic Forum’s Global Competitiveness Index.

Pakistan’s neighbour India, on the other hand, is predicted to grow by 7.72 per cent, the world’s highest. The CID believes that the economic pole of global growth has moved over the past few years from China to neighbouring India and it is likely to stay there over the coming decade.

‘Pakistan’s GDP growth expected to hit 9-year high in current fiscal year’

Except for India, Pakistan will beat all Asian economies in GDP growth. These also include giant Muslim economies.

Here are some regional countries (and their GDP growth) Pakistan will be ahead of:

Muslim and South Asian countries:

Indonesia 5.82 per cent

Turkey 5.64 per cent

Malaysia 4.82 per cent

Sri Lanka 3.77 per cent

Saudi Arabia 3.17 per cent

Bangladesh 2.82 per cent

UAE 2.41 per cent

Shanghai Cooperation Organisation (SCO) countries:

Tajikistan 3.61 per cent

Uzbekistan 3.32 per cent

Kazakhstan 2.65 per cent

Kyrgyzstan 5.77 per cent

Russia 2.60 per cent

According to the Harvard study, the central reason for income differences is know-how. Poor countries produce few goods that many countries can make because of the lack of know-how, while rich countries produce a greater diversity of goods, including products that few other countries can make.

Harvard’s leading research hub uses this fact to measure the amount of the know-how that is held in each economy.

A major trend that emerges from Harvard’s report is that the growth in emerging markets is predicted to continue to outpace that of advanced economies, though not uniformly.

Pakistan’s GDP growth expected at 4.9%: Moody’s

In addition to Pakistan, the CID projections are also optimistic about new growth hubs in East Africa and new segments of Southeast Asia, led by Indonesia and Vietnam. it also notes that economies based on commodity output face slower growth rates as commodity prices continue to remain under pressure.

With special economic zones (SEZs) being built under the China-Pakistan Economic Corridor (CPEC) project, it is an opportunity for Pakistan to move away from commodity output by producing value-added goods in joint ventures with Chinese firms and increase its exports. This way, Pakistan can have even faster income growth.

The Harvard growth projections are in line with other short, medium and long-term GDP growth forecasts for Pakistan.

HSBC: 5 per cent leading to 2050

IMF: 5.5 per cent leading to 2020

The World Bank: 5.8 per cent leading to 2019

The Economist: 5.7 per cent in 2017

In a bid to materialise this growth projection, what needs to be chalked out is a multi-pronged strategy. Pakistan needs to diversify its product capabilities. With likely new FDI inflows, Pakistani firms can go into producing value added goods both for domestic consumption as well as exports.

The firms, currently content with domestic sales turnover, need to introduce some percentage of exports to their strategic plans. Similarly, Pakistan’s agriculture sector needs to address its lack of sophistication and crop and distribution losses. The cumulative effect of even modest steps will help increase our GDP growth.

https://tribune.com.pk/story/1452332/pakistans-gdp-growth-rate-even-higher-china-harvard-study/

What is the use of GDP growth rate when rampant population growth in Pakistan is eating away GDP growth?
China's rapid GDP growth is only half of the story.Other half is the rapid decline of population growth.That two caused the rapid rise of per capita income and development.

 

[Species]

.....yup were just growing at only 2.8%....keep it under your hat......Harvard!....

After all, you need to state something different from others to sell your 'study'!

 

[SBUS-CXK]

I congratulate Pakistan!

 

[Nilgiri]

Pakistan could already be growing a lot faster, it needs to revise its base year (long overdue) and also have better formalisation of its economy wherever possible (so statistics have better base).

But Pakistan seriously needs to address two major things: gross capital formation rate as % of GDP and private credit lending as % of GDP. Both are fairly interlinked (good news - you can solve with same policies), but CPEC will not be enough to address these issues imo. Essentially you need to improve labour and resource flexibility, banking reforms while growing the long term human capital (education, health like is talked about a lot already but is more future-related)......but for that Pakistan needs better politicians and bureaucracy that do not have vested interests in status quo (and just tinkering) but want bold changes to get bold permeation.

 

[AUz]

Pakistan could already be growing a lot faster, it needs to revise its base year (long overdue) and also have better formalisation of its economy wherever possible (so statistics have better base).

But Pakistan seriously needs to address two major things: gross capital formation rate as % of GDP and private credit lending as % of GDP. Both are fairly interlinked (good news - you can solve with same policies), but CPEC will not be enough to address these issues imo. Essentially you need to improve labour and resource flexibility, banking reforms while growing the long term human capital (education, health like is talked about a lot already but is more future-related)......but for that Pakistan needs better politicians and bureaucracy that do not have vested interests in status quo (and just tinkering) but want bold changes to get bold permeation.

Exactly.

Pakistan's GDP numbers do not match with Pakistan's prosperity on the ground.

For example, when you look at the median wealth and median income levels India and Pakistan--Pakistan seems to be doing much better. Similarly, when we look at the multidimensional poverty index, again, Pakistan seems to be doing not only better but improving a slightly better rate than India. When you look at the numbers of households with television/washing machines/proper toilets/sanitation etc etc--again Pakistan leaves India behind by quite a margin. Then you take the "middle-class" by percentage and whatever definition/criteria you use for 'middle-class', Pakistan has higher middle-class by percentage than India. Furthermore, when you look at the 'food availability/production per capita'---Pakistan has now crossed ahead India even here (India used to be ahead, thanks for far greater water and land resources by percentage than Pakistan).

Yet, when you look at GDP per capita...there is a $200 difference in favor of India. What gives? Well, because we do not have the updated numbers for Pakistan's economy. Our base year is 2005-06 and that too, was partially upgraded from 2000's. So basically, huge sections of our economic output are still being recorded with base year 2000s!

Pakistan's GDP per capita is either higher than India or the gap is not as much as it is shown in the numbers. Hopefully we record our economy properly and upgrade the base year to atleast 2010-11. CPEC will give Pakistan the best connectivity in the entire region (80%+ of our population and industry would be connected via double-tracked 160km railway network by 2021! Unprecedented in the region)...hopefully with proper reforms and hopefully a new government lead by Imran Khan and his team would transform Pakistan's journey and put it on track to lead the region as we once used to (or atleast put us on par with India's growth trajectory).

JIT probing Nawaz Shareef's money trail is submitting its final report to Supreme Court today. All indications point towards trouble for Shareef as FIA also declared that the chairman of one department was caught tempering the record in favor of Shareefs. If Nawaz Shareef goes down, then the great war of Pakistan's politics is here.

Hopefully, we come out of it stronger and more prepared for economic progress than to digress (God Forbid!).

 

[Nilgiri]

Exactly.

Pakistan's GDP numbers do not match with Pakistan's prosperity on the ground.

For example, when you look at the median wealth and median income levels India and Pakistan--Pakistan seems to be doing much better. Similarly, when we look at the multidimensional poverty index, again, Pakistan seems to be doing not only better but improving a slightly better rate than India. When you look at the numbers of households with television/washing machines/proper toilets/sanitation etc etc--again Pakistan leaves India behind by quite a margin. Then you take the "middle-class" by percentage and whatever definition/criteria you use for 'middle-class', Pakistan has higher middle-class by percentage than India. Furthermore, when you look at the 'food availability/production per capita'---Pakistan has now crossed ahead India even here (India used to be ahead, thanks for far greater water and land resources by percentage than Pakistan).

Yet, when you look at GDP per capita...there is a $200 difference in favor of India. What gives? Well, because we do not have the updated numbers for Pakistan's economy. Our base year is 2005-06 and that too, was partially upgraded from 2000's. So basically, huge sections of our economic output are still being recorded with base year 2000s!

Pakistan's GDP per capita is either higher than India or the gap is not as much as it is shown in the numbers. Hopefully we record our economy properly and upgrade the base year to atleast 2010-11. CPEC will give Pakistan the best connectivity in the entire region (80%+ of our population and industry would be connected via double-tracked 160km railway network by 2021! Unprecedented in the region)...hopefully with proper reforms and hopefully a new government lead by Imran Khan and his team would transform Pakistan's journey and put it on track to lead the region as we once used to (or atleast put us on par with India's growth trajectory).

JIT probing Nawaz Shareef's money trail is submitting its final report to Supreme Court today. All indications point towards trouble for Shareef as FIA also declared that the chairman of one department was caught tempering the record in favor of Shareefs. If Nawaz Shareef goes down, then the great war of Pakistan's politics is here.

Hopefully, we come out of it stronger and more prepared for economic progress than to digress (God Forbid!).

Well the poverty and income measurements also leave much to be desired since they are not done in standardised way even in the region. Its why World bank is looking at decreasing Indian poverty rate from 21% in 2011 to somewhere around 12% for that year....and attempting to standardise the better methodology for more countries too. Also nominal exchange rate of GDP per capita means little (unless the country is developed), thats why all poverty and development indices use PPP....which already largely accounts for more of the unaccounted economy than nominal exchange rate (if you look at how ICP surveys consumption baskets)....so it wont be changed so much potentially compared to the nominal figure with re-basing.

But Pakistan's footprint regarding internal investment, internal lending, trade (stuff that does not suffer from base year and other accounting problems) definitely show serious flaws in the economy that do need to be addressed otherwise they become systemic problem (and their %'s probably will worsen if the rebasing expands GDP denominator but not the numerators). CPEC is a small bandaid to these issues (looking at total years needed and impulse of say GCF in % terms and large reliance on transfer momentum while taking into account repayment of loan+interest). Pakistani bureaucracy has to fundamentally overhaul how it extracts, delivers and measures itself in performance terms....rather be in it just for the sake of existing and profiting.

 

[Śakra]

Congrats