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Reality vs perception: Govt likely to miss 4.2% growth rate target, again: ADB

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ISLAMABAD:

As India is poised to become an engine of global growth, just across the border, Pakistan will experience yet another year of modest economic growth rate of 4.2% due to its lack of appetite for reforms, predicts a new report by the Asian Development Bank (ADB).

The Asian Development Outlook – a flagship publication of the ADB — has projected 4.2% economic growth rate for current financial year 2014-15 against the target of 5.1%.

It will be the second straight year when the Pakistan Muslim League-Nawaz (PML-N) government would miss its major economic goal owing to its failure to introduce reforms in energy, taxation and public sector enterprises.


“Pakistan has been quite successful in stabilising the economy but the challenge is how to move towards more growth,” said ADB’s Country Director to Islamabad Werner Liepach.

While unveiling glimpses of key challenges that Pakistan is facing on the economic front, Liepach told the government in plain words to seize the opportunity on back of reduction in oil prices and go for serious reforms.

Liepach said that fall in oil prices globally has provided a breather to the government, which should be used for fiscal reforms.

The ADB’s projections showed that India will grow at a faster pace of 7.8% in the current fiscal year –even higher than China’s projected economic expansion of 7.3%.


“If India can do it, why can’t Pakistan?” asked Liepach. He appealed the government “not to squander historical opportunity for reforms” that came in guise of reduction in oil prices.


He said ongoing efforts to make the power sector financially viable and reforms of public sector enterprises through restructuring and privatisation are vital for macroeconomic gains. Liepach revealed that the outstanding circular debt was around Rs300 billion.

The ADB’s senior economics officer, Farzana Noshab, said that the 4.1% economic growth rate that the government claimed achieving last year was subject to downward revision as well. She said the 4.1% Gross Domestic Product (GDP) growth rate was built on 5.2% provisional growth rate in Large Scale Manufacturing (LSM) sector last year, which the final results showed was 3.9%, pulling down the overall growth rate to below 4%.

She said the LSM sector was not performing as well in the current fiscal yea , reflecting continued energy shortages, low and declining investment in the sector and weak external demand for Pakistan’s exports.

Commenting on the expansion of agriculture and services sectors, Noshab said that the these sectors are also projected to moderately expand in the current fiscal year. Pakistan’s Real Effective Exchange Rate – the weighted average of Pakistan’s currency relative to a basket of other major currencies adjusted for the effects of inflation, appreciated 7.7% till January said Noshab adding that it has somehow neutralised the benefits of duty free access to European markets.

She further said the fiscal deficit was, so far, in line with annual projections but will certainly increase due to a spike in security spending in the second half of the fiscal year. Although the government was controlling its borrowings from the central bank, there was significant spike in SBP’s injections in the money market –an indication that the banks were lending to the government by borrowing from the State Bank, she added.

According to the ADB’s findings, foreign direct investment into Pakistan was mostly stagnant while portfolio investment was picking up, cautioning the country that the portfolio numbers should be watched carefully as there was lot of volatility in the Karachi Stock Exchange.

The ADB also advised the government to further build up the foreign exchange reserves as the current level of reserves was not sufficient to absorb any external shock.

Overall, the Asia region is projected to grow at a pace of 6.3% and the growth is dependent on reforms, recovery in the advanced economies and reduction in commodity prices.

Govt likely to miss 4.2% growth rate target, again: ADB - The Express Tribune
 
do you really expect anything from this utterly useless govt?
all it knows is siasi muk muka and forming inquiry commission lol.
id be hella surprised if they even manage to get 4.0% growth.
 
ISLAMABAD:

As India is poised to become an engine of global growth, just across the border, Pakistan will experience yet another year of modest economic growth rate of 4.2% due to its lack of appetite for reforms, predicts a new report by the Asian Development Bank (ADB).

The Asian Development Outlook – a flagship publication of the ADB — has projected 4.2% economic growth rate for current financial year 2014-15 against the target of 5.1%.

It will be the second straight year when the Pakistan Muslim League-Nawaz (PML-N) government would miss its major economic goal owing to its failure to introduce reforms in energy, taxation and public sector enterprises.


“Pakistan has been quite successful in stabilising the economy but the challenge is how to move towards more growth,” said ADB’s Country Director to Islamabad Werner Liepach.

While unveiling glimpses of key challenges that Pakistan is facing on the economic front, Liepach told the government in plain words to seize the opportunity on back of reduction in oil prices and go for serious reforms.

Liepach said that fall in oil prices globally has provided a breather to the government, which should be used for fiscal reforms.

The ADB’s projections showed that India will grow at a faster pace of 7.8% in the current fiscal year –even higher than China’s projected economic expansion of 7.3%.


“If India can do it, why can’t Pakistan?” asked Liepach. He appealed the government “not to squander historical opportunity for reforms” that came in guise of reduction in oil prices.


He said ongoing efforts to make the power sector financially viable and reforms of public sector enterprises through restructuring and privatisation are vital for macroeconomic gains. Liepach revealed that the outstanding circular debt was around Rs300 billion.

The ADB’s senior economics officer, Farzana Noshab, said that the 4.1% economic growth rate that the government claimed achieving last year was subject to downward revision as well. She said the 4.1% Gross Domestic Product (GDP) growth rate was built on 5.2% provisional growth rate in Large Scale Manufacturing (LSM) sector last year, which the final results showed was 3.9%, pulling down the overall growth rate to below 4%.

She said the LSM sector was not performing as well in the current fiscal yea , reflecting continued energy shortages, low and declining investment in the sector and weak external demand for Pakistan’s exports.

Commenting on the expansion of agriculture and services sectors, Noshab said that the these sectors are also projected to moderately expand in the current fiscal year. Pakistan’s Real Effective Exchange Rate – the weighted average of Pakistan’s currency relative to a basket of other major currencies adjusted for the effects of inflation, appreciated 7.7% till January said Noshab adding that it has somehow neutralised the benefits of duty free access to European markets.

She further said the fiscal deficit was, so far, in line with annual projections but will certainly increase due to a spike in security spending in the second half of the fiscal year. Although the government was controlling its borrowings from the central bank, there was significant spike in SBP’s injections in the money market –an indication that the banks were lending to the government by borrowing from the State Bank, she added.

According to the ADB’s findings, foreign direct investment into Pakistan was mostly stagnant while portfolio investment was picking up, cautioning the country that the portfolio numbers should be watched carefully as there was lot of volatility in the Karachi Stock Exchange.

The ADB also advised the government to further build up the foreign exchange reserves as the current level of reserves was not sufficient to absorb any external shock.

Overall, the Asia region is projected to grow at a pace of 6.3% and the growth is dependent on reforms, recovery in the advanced economies and reduction in commodity prices.

Govt likely to miss 4.2% growth rate target, again: ADB - The Express Tribune

Mate we need energy to run our economy and hope after 1 1/2 year things will be change a bit.
 
Nawaz Sharif recently said his government cant focus on economy right now as their first priority is rooting out the terrorism.
 
What Pakistan needs is a leader who knows 1 or 2 things about economy and global politics.

I can beat that...
How about a society and a people that know 1 or 2 things about the economy?

No leader will be gifted to you, you make your own way in life or keel over and die while the rest of the world marches on. One thing that has been my pet peeve on this forum is Pakistanis asking for x, y, z type leader to fall right out of the sky and grace them with his presence, so that he may give them wealth, happiness and respect, all for free while they do nothing to earn it.
 
Terrorism and WOT has taken a toll on Pakistan. Ever for a semblance to return it will take decades. Forget about economic growth.

I think NS is doing the right thing by focusing first on eliminating terrorism
 
I can beat that...
How about a society and a people that know 1 or 2 things about the economy?

No leader will be gifted to you, you make your own way in life or keel over and die while the rest of the world marches on. One thing that has been my pet peeve on this forum is Pakistanis asking for x, y, z type leader to fall right out of the sky and grace them with his presence, so that he may give them wealth, happiness and respect, all for free while they do nothing to earn it.
leader are never gifted, they lead people and they just listen or not listen to gifted people..sorry to say but in case of energy and taxation it seems nawaz belongs to later group
 
No worries. We will calculate the growth rate based on BJP Economic formula.
 
We will most likely achieve 4.8% this year
very optimistic...But with nothing being done to curb floods (mind you agriculture is our biggest income), nothing being done to invest for the future (via education, enrichment programs and so on: youth is our greatest power), no improvement in industry, opening different projects which stop mid way coz of lack of funds or sudden increase and recalculation in "estimated" project price, no improvement in electricity (industries do run on electricity), power lines still shitty, inflation not linear with pay and many others....I dont see how we will reach even 4% from a country plundered and resources wasted!
 
I can beat that...
How about a society and a people that know 1 or 2 things about the economy?

No leader will be gifted to you, you make your own way in life or keel over and die while the rest of the world marches on. One thing that has been my pet peeve on this forum is Pakistanis asking for x, y, z type leader to fall right out of the sky and grace them with his presence, so that he may give them wealth, happiness and respect, all for free while they do nothing to earn it.
And they did get one, in KPK.

KPK growth is also part of Pakistan. If it has higher growth, it will boost Pakistan's as well. Take a look at this: 7pc growth rate target is overambitious - Pakistan - DAWN.COM


Leaders aren't going to change Pakistan, we will have to. If we as people stop stealing and begging for subsidy, only then can Pakistan prosper. But noooo, gotta steal that electricity cuz why pay Nawaz, he gonna stash money in Swiss banks anyway. And if Nawaz steals, why can't we steal (as they were saying, if Ishaq dar money launders and is free, free that ayla or whoever got arrested free as well). And why should I pay profitable fare to metro bus? The gov't is supposed to make it free! But I will pay full price to private bus because they will kick me out if i don't pay and will beat the hell out of me if I damage their property. Gotta damage public property, cuz hey, it's not mine. Oh and not pay taxes either, because zardari and nawaz don't pay (ignoring the fact their money is abroad/under children so they are not liable for taxes).


Anything with gov't = Steal/pay peanuts
Anything private = Act like prisoners and pay in full (take a look at Pakistanis flying PIA and then Pakistanis flying Delta/British Airways. It's like as if they were slapped a few times so they sit quiet and nice).


PIA airline:


So because of the combination of our own fault do we end up with budget deficit, and thus, our economy cannot grow with a high rate.
 
At this moment GOP has big task on their plate is to improving law and order situation across Pakistan.
But single stick will not gonna work every where . GOP can improve law and order situation in metro cities.Pump some funds in and around metro cities for infra. This will give jump start to local industries. Those local industries has big part in overall GDP.
Again , GOP should look for mid-term and long term benefits. Start isolating areas which can work better with less fund and better administrations like PSM.This will give boost at no or less cost but just with right intent.

Cleaner image of administration will start confidence building. This will start flow of funds from across glob for investment. As well local industrialist with start investing more.
Not boasting about India or PM Modi , but what helped him and helping him now is his administrations clean and clear image. They show real intent of getting work done. Yeah it can be nightmare to get it done but intent is first right and strong step.
GOP is still not showing that , it is more talk and most of announcement of for local consumption and for cheap publicity.
 
At this moment GOP has big task on their plate is to improving law and order situation across Pakistan.
But single stick will not gonna work every where . GOP can improve law and order situation in metro cities.Pump some funds in and around metro cities for infra. This will give jump start to local industries. Those local industries has big part in overall GDP.
Again , GOP should look for mid-term and long term benefits. Start isolating areas which can work better with less fund and better administrations like PSM.This will give boost at no or less cost but just with right intent.

Cleaner image of administration will start confidence building. This will start flow of funds from across glob for investment. As well local industrialist with start investing more.
Not boasting about India or PM Modi , but what helped him and helping him now is his administrations clean and clear image. They show real intent of getting work done. Yeah it can be nightmare to get it done but intent is first right and strong step.
GOP is still not showing that , it is more talk and most of announcement of for local consumption and for cheap publicity.
law and order improves as jobs and better education are available.

There is a reason why all bad stuff comes from Fata. Because its budget is very very low. This is why I don't mind roads being made, because it puts people to work.
 

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