Pakistan's Per Capita income Rises to $3135 Amid Slow Growth

[RiazHaq]

Here is a post that can be nominated for epic failure. Growth in nominal terms cannot be fuelled by inflation for long! The market forces balance things out. If that is the case, then a currency that is free float will not be valued at the same conversion rate.


With no proof you claim drop in purchasing power !

Similar to Pakistan's nominal growth, at least a part of India's nominal growth in per capita gdp and income is also driven by rising domestic inflation of over 10% and appreciating Indian rupee (5.5% from 48.32 in 2009 to 45.65 in 2010) from strong hot money inflows from the Fed's quantitative easing in the United States and elsewhere. India's FDI has declined by a third from $34.6 billion in 2009 to $23.7 billion in 2010. Its current account deficit is being increasingly funded by significant short-term capital inflows (FII up 66% from $17.4 billion in 2009 to $29 billion in 2010) rather than more durable foreign direct investment (FDI).

South Asia Investor Review: Double Digit Gains in Pakistan's Per Capita Income

 

[notsuperstitious]

So I produces ten kilo rice last year, the price of that rice was 1000 rupees.

This year I produce 10 kilo rice, but the price of that rice is 1170 rupees.

Does that mean I produced more? (GDP)

Does that mean I have more money as everything else also is more expensive by 17% (welfare)

Not to mention foreign aid money keeping Pakistan rupee strong (USD Conversion)

 

[great]

Similar to Pakistan's nominal growth, at least a part of India's nominal growth in per capita gdp and income is also driven by rising domestic inflation of over 10% and appreciating Indian rupee (5.5% from 48.32 in 2009 to 45.65 in 2010) from strong hot money inflows from the Fed's quantitative easing in the United States and elsewhere. India's FDI has declined by a third from $34.6 billion in 2009 to $23.7 billion in 2010. Its current account deficit is being increasingly funded by significant short-term capital inflows (FII up 66% from $17.4 billion in 2009 to $29 billion in 2010) rather than more durable foreign direct investment (FDI).


South Asia Investor Review: Double Digit Gains in Pakistan's Per Capita Income

I still don't understand how is FII and FDI is relevant here. Are we talking of investment patterns here? Would you say our growth is fake if we had FII invested? We are talking of present growth rates and not risks associated with future investment. I don't think the rupee appreciation indicates inflation but rather deflation. As consumer products would be easier to buy.

 

[AgNoStiC MuSliM]

Thread cleaned up - stick to the topic please

 

[Pioneerfirst]

So I produces ten kilo rice last year, the price of that rice was 1000 rupees.

This year I produce 10 kilo rice, but the price of that rice is 1170 rupees.

Does that mean I produced more? (GDP)

Does that mean I have more money as everything else also is more expensive by 17% (welfare)

Not to mention foreign aid money keeping Pakistan rupee strong (USD Conversion)

Most of the wold thinks that Pakistan is running on foreign that is not true.Take year 2010-2011 We have not get even a single dollar from IMF.USA aid had been almost zero,world bank and ADB provided funds for different projects but that are their investment not for running country,
Pak rupee is strong due to 20% increase in exports and almost 30% in remittances,but no one in the world want to see.

 

[King Solomon]

This is the nominal income. Much of this is due to inflation.

 

[Rafael]

The figures and analysis of these so called institutions means crap if the situation on the ground doesn't gets better for an average Pakistani.

 

[notsuperstitious]

Most of the wold thinks that Pakistan is running on foreign that is not true.Take year 2010-2011 We have not get even a single dollar from IMF.USA aid had been almost zero,world bank and ADB provided funds for different projects but that are their investment not for running country,
Pak rupee is strong due to 20% increase in exports and almost 30% in remittances,but no one in the world want to see.

I'm not saying Pakistan is running on aid. I'm saying the inflows in USD (which include remittances and exports as you correctly pointed out) do keep the rupee strong, that leads to these problems. Basically nominal numbers are useless, as they are not comparable and do not measure anything useful. Their meaning changes country to country too.

The problem with nominal GDP numbers in USD is that USD pricing is no more a rational process.

 

[Gandhi G in da house]

Similar to Pakistan's nominal growth, at least a part of India's nominal growth in per capita gdp and income is also driven by rising domestic inflation of over 10% and appreciating Indian rupee (5.5% from 48.32 in 2009 to 45.65 in 2010) from strong hot money inflows from the Fed's quantitative easing in the United States and elsewhere. India's FDI has declined by a third from $34.6 billion in 2009 to $23.7 billion in 2010. Its current account deficit is being increasingly funded by significant short-term capital inflows (FII up 66% from $17.4 billion in 2009 to $29 billion in 2010) rather than more durable foreign direct investment (FDI).

South Asia Investor Review: Double Digit Gains in Pakistan's Per Capita Income

From the blog ,

this blog is designed to help international investors looking to learn about investing in South Asia with focus on Pakistan. Riaz has another blog called Haq's Musings at Haq's Musings

Quoting your own blog to prove your own point ?

why don't you get a real source rather than posting from blogs that too your own ?

 

[Gandhi G in da house]

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[Gandhi G in da house]

From IMF website for 2011 ,

Pakistan Gross domestic product based on purchasing-power-parity (PPP) per capita GDP Current international dollar Units 2,851.056

 

[ramu]

Similar to Pakistan's nominal growth, at least a part of India's nominal growth in per capita gdp and income is also driven by rising domestic inflation of over 10% and appreciating Indian rupee (5.5% from 48.32 in 2009 to 45.65 in 2010) from strong hot money inflows from the Fed's quantitative easing in the United States and elsewhere. India's FDI has declined by a third from $34.6 billion in 2009 to $23.7 billion in 2010. Its current account deficit is being increasingly funded by significant short-term capital inflows (FII up 66% from $17.4 billion in 2009 to $29 billion in 2010) rather than more durable foreign direct investment (FDI).

South Asia Investor Review: Double Digit Gains in Pakistan's Per Capita Income

Now, that you say that a part of nominal growth, I agree to that and so is the case with China and not just India and Paksitan. For the case of India and China, the growth rate has a significant influence on the nominal growth. It is another story that currency fluctuation is artificially controlled by China and the fluctuation has no direct bearing on inflation.

FDI, FII has nothing to do with the topic being discussed. Fiscal deficit in India is hovering at 4.7 % of GDP and by 2015 it is anticipated to be under 3%. So Let us not mix mangoes and oranges.

 

[ramu]

Most of the wold thinks that Pakistan is running on foreign that is not true.Take year 2010-2011 We have not get even a single dollar from IMF.USA aid had been almost zero,world bank and ADB provided funds for different projects but that are their investment not for running country,
Pak rupee is strong due to 20% increase in exports and almost 30% in remittances,but no one in the world want to see.

PF, First of all, no one thinks Pakistan is living on foreign aid but everyone knows that the Pakistan Government is living on aid and so is its defence forces. Pakistan people shy away from paying taxes to the Government and that has an impact of the fiscal situation.

Exports, imports are great but as long as the expnditure vs reciepts don't match up, this will unfortunately continue.

 

[RiazHaq]

Now, that you say that a part of nominal growth, I agree to that and so is the case with China and not just India and Paksitan. For the case of India and China, the growth rate has a significant influence on the nominal growth. It is another story that currency fluctuation is artificially controlled by China and the fluctuation has no direct bearing on inflation.

FDI, FII has nothing to do with the topic being discussed. Fiscal deficit in India is hovering at 4.7 % of GDP and by 2015 it is anticipated to be under 3%. So Let us not mix mangoes and oranges.

The strength of the Indian rupee has everything to do with foreign capital inflows ..without these, the INR could collapse and there could be a balance of payments crisis. The real danger is the growing dependence on hot money that can leave India as fast as it coming in.

 

[RiazHaq]

From IMF website for 2011 ,

Pakistan Gross domestic product based on purchasing-power-parity (PPP) per capita GDP Current international dollar Units 2,851.056

This figure reported by the IMF in March 2011 is for 2009-2010. The 2010-11 figure I am quoting came out on June 1, 2011 Economic Survey.