Thursday, August 18, 2011

India and Pakistan Per Capita GDPs at $3,100 in 2010-11

Nominal per capita incomes in both India and Pakistan stand at just over $1200 a year, according to figures released in May and June of 2011 by the two governments. This translates to about $3100 per capita in terms of PPP (purchasing power parity). Using a more generous PPP correction factor of 2.9 for India as claimed by Economic Survey of India 2011 rather than the 2.5 estimated by IMF for both neighbors, the PPP GDP per capita for Indian and Pakistan work out to $3532 and $3135 respectively.

Nominal per capita income of Indians grew by 17.9 per cent to Rs 54,835, or $1218, in 2010-11 from Rs 46,492 in the year-ago period, according to the revised data released by the government in May, 2011 as reported by Indian media.

In June 2011, Economic Survey of Pakistan reported that the nominal per capita income of Pakistanis rose 16.9 percent to $1,254 in 2010-11, up from $1,073 in 2009-2010.



Neither of these figures are adjusted for inflation which has been running in high single digits in India (about 9%) and double digits in Pakistan (about 14%).

Economic Survey of Pakistan 2010-11 puts the nation's population at 177 million and nominal gdp at $222 billion. In terms of purchase power parity with the PPP correction factor of 2.5, it works out to $555 billion PPP GDP.

Looking at the increase in nominal GDP alone can be quite misleading in judging the health of any economy. Other indicators, such as real GDP growth and investments, show that the state of Pakistan's economy is very poor. The nation's GDP grew only 2.4% in real terms in 2010-2011. Domestic investment dropped to a 40-year low of 13.4% of GDP, and foreign direct investment (FDI) declined by 29 percent to $1.232 billion during July-April 2010-11 from $1.725 million in the same period a year earlier.

In addition to improved security environment, Pakistan has an urgent need for serious economic reform, greater social justice and better governance. Unless the PPP government acts to improve this situation, no amount of foreign aid, external loans and other help will suffice. The first step in the process is for the ruling elite to lead by example by paying their fair share of taxes and adopting less extravagant personal lifestyles to get Pakistan's fiscal house in order.

Related Links:

Haq's Musings

Economic Survey of Pakistan 2010-11

Pakistan's Per Capita Income Exceeds $3,100 in 2010-2011

Pakistan's Story After 64 Years of Independence

India and Pakistan Contrasted in 2010

Oligarchs of India and Pakistan

24 comments:

Raghotthamacharya said...

I am a lecturer from Hyderabad, India. I wanted to share these thoughts with you about your older posts. Indians are as much in denial about rampant poverty as majority of Pakistanis about terrorism. If you don't like the comparison and just in case if you want to argue that Pakistan is not at all responsible for any terrorism inside or outside it then in order that the point I want to make should not be missed I would speak only about India without comparing. For majority of Indian public (excepting for a very tiny minority) the poor does not exist. The poverty does not exist. Even if they acknowledge that it is there, for them this is but natural. All that they would see is booming IT industry, growing economy, very fast growth of wealth, more cars and cell phones, IITs and IIMs etc. For these majority (and also to many in the world unfortunately these days) as far as India is concerned, it is exactly opposite of what you wrote about Pakistan '5% of bad is heard 95% of time'(In 2007 when I was in UK when I read William Dalrymple's article on Pakistan and India then I realized all perceptions about Pakistan are dead wrong and me, like everybody else, was caught in the RHETORIC that India is developing and Pakistan is backward. I appreciate that you are bringing truth to the notice of all in a sensible manner). In the case of India '20% of middleclass and affluent class's story is heard 99% of the time’. For those who repeatedly take pride in Goldmansachs report that by 2050 India would be 3rd largest economy and blah blah..., any mentioning of this crippling poverty is a major irritant. Like all super patriots they would like to hear only the success story on this side and failure story on the other side of border and so the opposite in any area is an impossible event for them. And they would never like to be told by any person belonging to neutral developed country, let alone a citizen of hostile country like Pakistan.
You have done extraordinarily diligent work in identifying major failures of India and quoting them from all the neutral sources of world and bringing evidence from research data of reputed international organizations. I hope you are not celebrating India’s utter failures in tackling various issues like poverty comparable to that of sub-Saharan Africa etc. I hope you are quoting these indices only to prove the arrogant Indians who gloat about their country’s economic power, that 25 crores of people are below poverty line.
Raghomatthama

Vishesh said...

SIRJI, you are forgetting one thing, that Pakistans GDP per capita has been calculated according to current prices and Indias according to base price!!

Riaz Haq said...

Vishesh: "you are forgetting one thing, that Pakistans GDP per capita has been calculated according to current prices and Indias according to base price!!"

I'm afraid you are wrong.

Both India and Pakistan figures I have used are based on current prices.

Here's the story from Economic Times:

NEW DELHI: Per capita income of Indians grew by 17.9 per cent to Rs 54,835 in 2010-11 from Rs 46,492 in the year-ago period, according to the revised data released by the government today.

The new per capita income figure estimates on current market prices is over Rs 8,000 more than the previous estimate of Rs 46,492 calculated by the Central Statistical Organisation.

Per capita income means earnings of each Indian if the national income is evenly divided among the country's population.

However, the increase in per capita income was only about 6.5 per cent in 2010-11 if it is calculated on the prices of 2004-05 prices, which is a better way of comparison and broadly factors inflation.


http://articles.economictimes.indiatimes.com/2011-05-31/news/29604458_1_capita-income-national-income-economy-at-current-prices

Raghotthamacharya said...

I disagree with your observation in one of your previous posts that Chandryan mission was a failure . To set a satellite in to moons orbit (that is to change it from earths orbit to moons orbit), called Lunar Orbit Insertion (LoI, that happens much more than one hundred thousand kilometers away from earth) is an extraordinary feat that only 4 or 5 countries have achieved. And then decreasing the orbital radius to nearly 100km around moon (exactly as designed earlier) is another success. In that orbit the satellite revolved for full 300 days sending valuable data. Although the chandrayan was expected to revolve for a 2 year period and it burned down after 10 months, most of the goals have been achieved. You must compare the lives of lunar satellites of US and Russia. Only china's one orbited for over 15 months. Both India and china are the only countries that have succeeded in their 1st attempt. To say the mission was failure was highly inaccurate. Hope you do not belong the type of people who would say 'anything and that happens on other side of the border should be and has to be a failure. Raghotthama

Vishesh said...

and by the way, inflation isn't at 14%, it is at 18%

"The Sensitive Price Indicator (SPI) has recorded
an increase of 17.9"

http://www.finance.gov.pk/survey/chapter_11/Overview%20of%20the%20Economy.pdf

Riaz Haq said...

Vishesh: "and by the way, inflation isn't at 14%, it is at 18%"

The relevant figure here is the consumer price index.

Read page xi of the Overview of the Economy on inflation: It says:

Inflation as measured by the changes in
Consumer Price Index (CPI) has escalated by 1.62 on month-on-month (M-o-M) basis and 13.0 percent on year-on-year (Y-o-Y) basis in April
2011. The cumulative increase in July-April 2010- 11 is 14.1 percent as against 11.5 percent in the comparative period of last year.

http://www.finance.gov.pk/survey/chapter_11/Overview%20of%20the%20Economy.pdf

Anonymous said...

Riaz jee WB states that Indian per capita income is now 1.5 times that of Pakistan.nominal current prices.

http://thinkprogress.org/yglesias/2011/06/27/254722/pakistan-falling-behind-india-despite-decent-growth/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+matthewyglesias+%28Matthew+Yglesias%29


Please see what is happening in Balochistan,Karachi,NWFP etc etc.You think Pakistan and India are still equal!?

Riaz Haq said...

Anon: "WB states that Indian per capita income is now 1.5 times that of Pakistan.nominal current prices"

Nonsense!

Nominal per capita incomes in both India and Pakistan stand at just over $1200 a year, according to figures released in May and June of 2011 by the two governments. This translates to about $3100 per capita in terms of PPP (purchasing power parity). Using a more generous PPP correction factor of 2.9 for India as claimed by Economic Survey of India 2011 rather than the 2.5 estimated by IMF for both neighbors, the PPP GDP per capita for Indian and Pakistan work out to $3532 and $3135 respectively.

Nominal per capita income of Indians grew by 17.9 per cent to Rs 54,835, or $1218, in 2010-11 from Rs 46,492 in the year-ago period, according to the revised data released by the government in May, 2011 as reported by Indian media.

In June 2011, Economic Survey of Pakistan reported that the nominal per capita income of Pakistanis rose 16.9 percent to $1,254 in 2010-11, up from $1,073 in 2009-2010.

Riaz Haq said...

The BBC reports that inflation hit a high of 9.78% in India:

Inflation in India rose to 9.78% in August, its highest level in a year, officials say.

The increase was mainly due to the rising cost of food, fuel and manufactured goods across the country.

Inflation is a major headache for the Indian government and the central bank has raised interest rates 11 times in 18 months to try to keep a lid on it.

Despite this, a senior government adviser has said he thinks inflation will stay between 9-10% this year.

There are fears that that the Reserve Bank of India will continue to raise rates as inflation has remained high.

Correspondents say that the bank is now in the awkward position of fighting high prices amid mounting worries about the health of the global economy.

The government is projecting growth of 8.5% for the fiscal year that ends next March.

But the growth rate is threatened by the rising prices - which limit domestic consumers' spending power.

A further curb could come from lower export demand as developed countries struggle with low or no economic growth.


http://www.bbc.co.uk/news/world-south-asia-14914916

Riaz Haq said...

There are a lot of different figures and forecasts floating around different websites and publications that significantly overstate India's GDP and understate Pakistan's.

The figures I have provided here were released in May 2011 by India and in July 2011 by Pakistan. This is the only apples-to-apples comparison that is valid. The rest is irrelevant.

Economic Survey of Pakistan 2010-11 puts the nation's population at 177 million and nominal gdp at $222 billion or $1254 per person.

And Economic Survey of India 2010-2011 says India's population is 1.2 billion and puts nominal GDP at $1.46 trillion or $1218 per person.

http://articles.economictimes.indiatimes.com/2011-05-31/news/29604458_1_capita-income-national-income-economy-at-current-prices

http://www.infopak.gov.pk/EconomicSurvey/Highlights.pdf

Anonymous said...

India's GDP is 1.72 trillion for 2011.

Riaz Haq said...

Anon: "India's GDP is 1.72 trillion for 2011."

Yes, you are right.

I just located a document by Economic Survey of India which puts India's GDP at INR 78.78 trillion which is about $1.75 trillion or per capita gdp of $1458 at INR 45 to a US dollar.

http://indiabudget.nic.in/es2010-11/echap-01.pdf

Riaz Haq said...

Here's a story from The Hindu on India's gdp and per capita income for 2011-12:

India has become the fourth largest economy in the world due to a strong economic growth but still has a low per capita income, the Economic Survey revealed today.

“India has emerged as the fourth largest economy globally with a high growth rate and has improved its global ranking in terms of per capita income. Yet, the fact remains that its per capita income continues to be quite low,” it said.

“India has moved up the ranks, but is still the poorest among the G-20,” the survey added.

The per capita income of India stood at $ 1,527 in 2011, it said. “...this is perhaps the most visible challenge. Nevertheless, India has a diverse set of factors, domestic as well as external, that could drive growth well into the future,” the survey said.

Between 1980 and 2010, India achieved a growth of 6.2 per cent, while the world as a whole registered a growth rate of 3.3 per cent. As a result, India’s share in global GDP more than doubled from 2.5 per cent in 1980 to 5.5 per cent in 2010, it said.

Consequently, India’s rank in per capita GDP showed an improvement from 117 in 1990 to 101 in 2000 and further to 94 in 2009. China, however, improved its rank from 127 to 74 during the same period.

G-20 or the Group of 20 nations was formed in 1999 after the East Asian crisis as a forum of finance ministers and central bank governors.

Meanwhile, the survey said any slowdown in eurozone, which accounts for 19 per cent of the global GDP, could impact the Indian economy. The International Monetary Fund (IMF) has forecast that the eurozone is likely to go through a mild recession in 2012.


http://www.thehindu.com/business/Economy/article2998234.ece

Riaz Haq said...

Here's a News report on Pakistan's 2011-12 GDP estimates:

The size of Pakistan’s economy increased to Rs20.653 trillion and per capita income in dollar terms stood at $1,372 after the revision of GDP growth estimates from 3.2 percent to 3.7 percent for the outgoing fiscal year 2011-12.

“The per capita income on market price basis has increased by 9 percent in the outgoing fiscal year as it went up to $1,372 in 2011-12 compared to $1,258 in the last fiscal year 2010-11,” an official working paper available with The News disclosed. The per capita income will be officially unveiled in the Economic Survey 2011-12 which will be launched a day ahead of the upcoming federal budget 2012-13.



The economic managers, sources said, have used average exchange rate at Rs88.31 against a dollar for the first nine months (July-March) period of the outgoing fiscal year and estimated population at 178.9 million. If average exchange rate of first ten months (July-April) is used, which is at Rs88.7 to a dollar, then per capita income will fall to $1,354 for outgoing fiscal year. It is yet to see which average of exchange rate is taken by the government to estimate per capita income.



After revision of GDP growth estimates up to 3.7 percent by National Accounts Committee (NAC) by abandoning rebasing exercise and deciding to use the previous base year of 1999-2000, the size of the economy increased by Rs2 trillion and went up to Rs20 trillion from earlier estimates of falling around Rs18 trillion.



The rise in size of the economy has helped the government to restrict its budget deficit in the range of 6.7 percent to 7 percent of GDP for the outgoing fiscal year. The one percent of GDP, equivalent to Rs206 billion, means that the budget deficit in rupee terms will be standing at Rs1,442 billion in case of deficit of 7 percent of the GDP.



The Pakistan Statistical Bureau (PSB) had committed blunders in this rebasing exercise as authorities estimated that the financial sector that was shown falling by negative 11 percent in 2011-12 by using base year of 2005-06 but it actually achieved plus 6 percent growth in 2011-12 on the basis of previous base year 1999-2000.



The economic deflator grew by 9.5 percent in outgoing fiscal year from revised estimates of over 18 percent in last fiscal year 2010-11, indicating that it declined by almost 100 percent.



The reasons for this massive decline in deflator was attributed to highest ever increase in cotton prices in international market that surged up to 129 percent in last fiscal year 2010-11 resulting into jacking up deflator in a massive way.



The prices of cotton are not catered into CPI based inflation so it was reflected by end of the last fiscal year through deflator while in outgoing fiscal year the prices of cotton dropped significantly so the deflator in outgoing fiscal year also declined.



In the last Economic Survey 2010-11, it was stated that Pakistan’s per capita real income had risen by 0.7 percent in 2010-11 as against 2.9 percent last year. Per capita income in dollar terms rose from $1,073 last year to $1,254 in 2010-11, thereby showing an increase of 16.9 percent.



This is mainly because of stable exchange rate as well as higher growth in nominal GNP. Real private consumption rose by 7.0 percent as against 4.0 percent attained last year. However, gross fixed capital formation lost its strong growth momentum and real fixed investment growth contracted by 0.4 percent as against the contraction of 6.1 percent in last fiscal year.


http://www.thenews.com.pk/Todays-News-3-107322-Size-of-economy-rises-to-Rs206trn-after-GDP-growth-revision

Riaz Haq said...

Here's the latest per capita income data from Economic Surveys of India & Pakistan:

India's per capita income for 2011-12 Rs 60,972, according to Economic Survey of India 2011-12. It translates into US $1143.09, using INR 53.25 to a US dollar.

The preliminary official estimates are indicating that Pakistan's nominal per capita income has increased by 9% to $1,372 in 2011-12 from $1,258 in 2010-11.

http://indiabudget.nic.in/survey.asp

http://www.thenews.com.pk/Todays-News-3-107322-Size-of-economy-rises-to-Rs206trn-after-GDP-growth-revision

Riaz Haq said...

Here's the latest per capita income data from Economic Surveys of India & Pakistan:

India's per capita income for 2011-12 Rs 60,972, according to Economic Survey of India 2011-12. It translates into US $1143.09, using INR 53.25 to a US dollar.

The preliminary official estimates are indicating that Pakistan's nominal per capita income has increased by 9% to $1,372 in 2011-12 from $1,258 in 2010-11.

http://indiabudget.nic.in/survey.asp

http://www.thenews.com.pk/Todays-News-3-107322-Size-of-economy-rises-to-Rs206trn-after-GDP-growth-revision

Riaz Haq said...

Here's ET report on preview of Economic Survey of Pakistan 2011-12:

In its fourth year, the Pakistan Peoples Party (PPP)-led government managed to miss all its economic targets, except containing inflation.

The Economic Survey of Pakistan, to be unveiled by Finance Minister Dr Abdul Hafeez Shaikh on Thursday (today), states that growth in the outgoing fiscal 2011-12 clocked in at 3.7%, markedly below the target of 4.2%.

The biggest admission of failure in the budget paper is that half of the industrial capacity remains idle, primarily due to the energy crisis. Growth next year can therefore be achieved without any new investment, simply by tapping this idle capacity.

The finance minister, however, will try to mitigate the impact of domestic policy failures and cite global woes for most domestic problems, and also place some responsibility on nature, or the ‘Great Floods’.

“The progress on resolution of war on terror could have offered support to economic growth in 2011-2, but at the beginning of the current fiscal, natural calamity struck,” the paper states.

According to the document, this year’s growth target of 4.2% was based upon the underlying assumptions of “global recovery, better fiscal management, improved energy availability and a conducive business environment.”

According to the paper, “The 3.7% growth was achieved due to bumper crops in Punjab, improved value-addition in large scale manufacturing and improvement in construction and financial sectors.” The targets for agriculture, industrial and services sectors have been missed. “The industrial sector remained confronted with gas and electricity outages.”

Meanwhile, national savings fell to 10.8%, against a target of 13.2%, and investment fell to 12.5%.

The government’s economic managers confessed that they have failed to manage subsidies, resulting into a higher budget deficit. The paper states that excluding Rs391 billion circular debt payments, budget deficit has crossed 4.3% of gross domestic product (GDP) and the revised target will be difficult to achieve.

Monetary growth

The paper states that the central bank reduced its policy rate by 200 basis points, from 14% to 12%, in order to keep real interest rates from suffocating growth. Due to the surge in government borrowings, money supply grew by 8.7% during the first 10 months of the outgoing fiscal.

Meanwhile, net foreign assets of the banking sector reduced by Rs261 billion in the first 10 months, as opposed to an increase of Rs174 billion, last year. The contraction was mainly due to lower external inflows and higher current account deficit – the gap between foreign receipts and payments, the paper states.

It adds that pressure on the rupee is likely to continue due to uncertain foreign inflows, and substantial government borrowing to finance the budget deficit.

Balance of payments

Against the annual target of $1.4 billion, or 0.6% of GDP, current account deficit widened to $3 billion in the first nine months of the outgoing fiscal, according to the document. The entire contribution to this surge came from trade imbalance, which stood at $12.8 billion in nine months, the paper adds.

“Exports could not sustain the pressure of falling global demand and domestic supply side constraints,” it states.

Total public debt surged to Rs12.1 trillion, or 58.2% of GDP, a net increase of Rs1.3 trillion in just the first months. Foreign investment plunged by 65% in ten months...


http://tribune.com.pk/story/386694/economic-survey-2011-2-govt-missed-all-targets-but-reined-in-inflation/

Riaz Haq said...

Here's an interesting explanation in The Hindu on PPP or purchasing power parity correction factor:

...A $ 100 note is exchangeable today at around Rs 4,500. But with Rs 4,500, you can buy more goods and services in India than with $100 in the US.

Therefore, India's GDP expressed in dollars at current exchange rates is lower than what it would be when adjusted for PPP, i.e. the exchange rate reflecting a currency's effective local buying power.

The Survey estimates India's PPP correction factor at 2.9, meaning the stuff available here for $100 will cost $290 in the US. That corresponds to an exchange rate of roughly Rs 15.5 to the dollar. But the interesting bit is about the linkage with GDP. Countries with per capita GDP of $1,000-1,400 in 2009 – which include India, Pakistan and Vietnam — have an average PPP adjustment factor of 2.3.

In comparison, those with per capita GDP (unadjusted for PPP) between $8,000-12,000 — the likes of Brazil, Mexico, Russia and Turkey – require a correction of only 1.6 or thereabouts.

From this follows the conclusion that as economies grow, the required PPP adjustment also falls. Thus, India currently has a per capita GDP of $1,300 with a PPP correction of 2.9.

If the present high growth rates continue, its per capita GDP would touch $10,000 in 2039. By then, its PPP correction factor, too, would have dropped to 1.6, implying that the same basket of commodities costing $290 in the US (assuming no inflation there) will now be available here for $181, as against the earlier $100 level.

The fall in the PPP adjustment factor from 2.9 to 1.6 by 2039, in turn, entails either (a) an appreciation of the rupee to Rs 24.9 to the dollar or, (b) prices in India rising cumulatively by 81 per cent or 2 per cent per annum in constant dollars or, (c) a combination of both. Assuming three-fourths of the reduction to happen via (b), it would translate into an average annual dollar price inflation of 1.5 per cent in India. And that is what the Survey (more precisely, Dr Basu) calls ‘PPP catch-up inflation'.

Elegant though this formulation is — as is to be expected from our erudite Professor — it is not without flaws.
The order of catch-up

The main problem has to do with the direction of causality. Does inflation result from PPP levels aligning themselves closer to market-determined exchange rates? Or, is it just the other way round, wherein inflation is a cause rather than effect of PPP catch-up? The Basu formulation — an adaptation of the so-called Balassa-Samuelson effect — seemingly presumes PPP catch-up to be the causal variable, which necessarily engenders inflation.

To quote from the Survey: “…due to this apparent fall in the PPP correction factor, there would be some increase in prices…(The country) would face an inflation of 2 per cent per annum solely on account of this PPP adjustment”.

In the real world, however, things probably work in the reverse. As inflation erodes the rupee's domestic purchasing power, the basket of goods and services that can be bought with Rs 4,500 will shrink over time. Assuming no corresponding depreciation of the rupee, domestic prices would increasingly approach global levels.

In the process, the PPP exchange rate is driven nearer to the market-determined exchange rate. We are, in other words, talking of ‘inflation catch-up PPP' as opposed to ‘PPP catch-up inflation'!
Lamb vs. Tiger

The phenomenon of ‘inflation catch-up PPP' can be seen in India, where the rupee has, over the years, emerged as a ‘lamb' at home and a ‘tiger' abroad. Since 2004-05, it has depreciated by hardly 4 per cent against the dollar, which is way below the 46 per cent rise in the all-commodities wholesale price index..


http://www.thehindubusinessline.com/opinion/columns/harish-damodaran/article1540678.ece

Riaz Haq said...

Here's a Business Standard story on falling Indian rupee's impact on India's GDP calculations:

India may turn into a $2-trillion economy by the end of this financial year, provided the rupee remains below 50.79 against the dollar during this period. The government has projected India's gross domestic product (GDP) for 2012-13 at Rs 101 lakh crore, against Rs 88 lakh crore in 2011-12—a growth of 14.7 per cent.

In 2011-12, when the rupee stood at an average of 47.95 against the dollar, the size of the economy was $1.84 trillion at current prices (including indirect taxes). A growth of 14.7 per cent would mean the economy would expand to $2.11 trillion.

The catch, however, is the rupee stood at 47.95 against the dollar in 2011-12, while its average exchange rate against the dollar so far this financial year is 53.24. At this rate, by the end of 2012-13, India would be a $1.9-trillion economy. Any further depreciation in the rupee would further reduce the size of the economy in dollar terms.

On Thursday, the rupee fell to a record low of 56.52 against the dollar. It has depreciated 14 per cent from its high this year, exerting pressure on the trade and current accounts.

With limited foreign exchange reserves and reforms unlikely, analysts expect the rupee to depreciate further in the coming days, with a recovery unlikely anytime soon. “The high inflation, sluggish growth, poor flows and the strengthening dollar index would continue to drive the rupee to new lows. We expect the rupee to breach 57-levels soon,” said Abhishek Goenka, chief executive, India Forex Advisors.

In 2010-11, when the rupee stood at an average of 45.57 against the dollar, India’s GDP stood at $1.68 trillion, while it was $1.36 trillion in 2009-10, at an average exchange rate of Rs 47.42/dollar. GDP growth at constant prices (excluding indirect taxes) stood at 5.3 per cent in the quarter ended March 31, with growth in financial year 2011-12 at 6.5 per cent—the lowest in nine years.

“This persistent sluggishness in the economy puts the Reserve Bank of India in a conundrum. It has to cut interest rates to stimulate growth. However, it can’t cut much, as this would lead to more depreciation in the rupee,” said Bundeep Singh Rangar, chairman of London-based consulting firm IndusView.

Though the central bank had cut policy rates by 50 basis points in April, it had warned it saw limited scope for more any cuts, partly because inflation remained high.


http://business-standard.com/india/news/india-to-be-2-trn-economy-by-fy13-end/475983/

Riaz Haq said...

Here's a PakistanToday story on Pakistan's current GDP being closer to $300 Billion:

The actual Gross Domestic Product (GDP) of Pakistan is nearer to $300 billion and not $210 billion, as is shown officially. And, if the ailing economy of the troubled Pakistan is assumed to grow by 3 per cent per year by 2015 the size of the actual GDP would likely to set between $ 350 and $ 375 billion. This was stated by Managing Director KSE Nadeem Naqvi while briefing the visiting V. Shankar, Member of the Board, Standard Chartered Bank PLC and CEO Europe, Middle East, Africa and Americas here at Karachi Stock Exchange (KSE) on Wednesday.
“Using conservative estimates, 50 per cent of the economy is in the undocumented sector,” Naqvi said adding that further estimation showed that the per capita income of top 10 per cent of households in Pakistan was near $5,000 versus national per capita income of $1,190.
“This represents a significant potential market for investment and financial services,” the MD added. Also, Naqvi highlighted the areas where KSE and SCBPL could cooperate that, he said, include investor awareness generation, attracting Non-Resident Pakistanis (NRPs) to the capital market and helping private companies list on the Exchange. Earlier, Shankar, accompanied by Mohsin Nathani, Chief Executive of Standard Chartered Bank (Pakistan) Limited (SCBPL) and senior members of his management team, rang the “Opening Bell” of the KSE in the presence of Chairman KSE Muneer Kamal, MD Nadeem Naqvi, DMD KSE Haroon Askari and directors of the KSE Board.
On the occasion Shankar said there was tremendous opportunity for growth in intra-regional trade for the South Asian economies, particularly India and Pakistan. Illustrating India-China bilateral trade, he said when Sino-Indian trade opened up they had to overcome some apprehensions, however, today they were one of the largest trading partners with benefit to both countries. Welcoming the guests, chairman KSE Muneer Kamal said Pakistan’s economy was at an inflection point. Despite challenges posed by low tax-to-GDP ratio, power sector difficulties and current account pressure due to demand slowdown in key export markets, Pakistan at present was in a position to repay IMF loans.
The foreign exchange reserves, supported by strong remittances by overseas Pakistanis, were in a much healthier position than at the height of global financial crisis in late 2008. While debt servicing burden had risen, it should be viewed in the global context and Pakistan’s total debt-to-GDP ratio of 64 per cent was far lower than many Euro zone and G-8 economies.
A concerted effort to mobilise tax revenue and focus on emerging domestic energy resources such as coal would go a long way in fixing structural deficiencies causing large budget deficits. Kamal highlighted that economic growth can be further accelerated with growing intra-regional trade in the sub-continent. He pointed out that while intra-regional trade in East Asia was 23 per cent of GDP, it was only 1 per cent of the GDP in South Asia.


http://www.pakistantoday.com.pk/2012/03/01/news/profit/kse-contradicts-official-figures-for-pakistan%E2%80%99s-gdp-says-actual-amounts-to-300bn/

HopeWins Junior said...

RH: "The relevant figure here is the consumer price index"
---

The CPI is generally useful for fine-tuning monetary policy.

When discussing Real GDP versus Nominal GDP, the relevant figure is the "GDP Deflator" and not the CPI.

Here are the GDP Deflators:
http://www.tradingeconomics.com/pakistan/gdp-deflator-base-year-varies-by-country-wb-data.html
http://www.tradingeconomics.com/india/gdp-deflator-base-year-varies-by-country-wb-data.html
http://www.tradingeconomics.com/bangladesh/gdp-deflator-base-year-varies-by-country-wb-data.html

Note the absolute runaway increase in the GDP deflator for our country since 2008...

Riaz Haq said...

Here's a Business Standard report about Indian GDP shrinking on US $ terms:

The size of the country's gross domestic product (GDP) grew to Rs 100 lakh crore in 2012-13, about 11.7 per cent higher than the Rs 89 lakh crore a year before. However, it contracted in dollar terms due to the rupee's depreciation.

GDP at market prices (including indirect taxes) had grown 15.1 per cent in 2011-12.

The GDP size, at Rs 1,00,20,620 crore in 2012-13, is only just short of the advance estimate of Rs 10,028,118 crore issued in February this year by the Central Statistics Office.

In dollar terms, the economy's size fell to $1.84 trillion in 2012-13 against $1.87 trillion the previous financial year. It was so because the rupee depreciated to 54.3 against the dollar on an average in 2012-13, against 47.8 in 2011-12.

India's per capita income grew to Rs 68,757 in 2012-13, growing 11.7 per cent over Rs 61,564 the previous year. In dollar terms, per capita income fell to 1,266.2 in 2012-13 against 1,287.9 in 2011-12. (SECTOR-WISE QUARTERLY ESTIMATES OF GDP GROWTH FOR 2012-13)

According to recent estimates of the Organisation for Economic Co-operation and Development, India's economy has probably surpassed Japan for the third highest slot in world GDP, in terms of purchasing power parity (PPP) at 2005 prices. Both economies had seven per cent share in world output in 2011. However, OECD projected that in 2012 or a year after, India would replace Japan as the third largest economy. Also, India's economy might grow larger than the euro area in about 20 years.

However, in current prices, India's economic size might have shrunk a bit due to fall in the rupee value against the greenback. The OECD estimated that on PPP at current prices, India's share in world GDP was six per cent in 2010 and Japan's was seven per cent.


http://www.business-standard.com/article/economy-policy/rupee-fall-shrinks-fy13-gdp-size-in-terms-113060100014_1.html

Riaz Haq said...

Pakistan's annual GDP rose to $252 billion (184.35 million pop times $1368 per capita) in fiscal 2012-13, according to Economic Survey of Pakistan 2012-13 estimates based on 9 months data.

http://www.finance.gov.pk/survey/chapters_13/executive%20summary.pdf

Riaz Haq said...

Sharp fall in Indian currency against the US dollar and slower economic growth have caused India's GDP for Fiscal  Year 2012-13 to shrink in US $ terms to $1.84 trillion from $1.87 trillion a year earlier. The Indian rupee has plummeted from 47.80 in 2012 to 54.30 to a US dollar in 2013, according to Business Standard. Since this report was published in Business Standard newspaper, Indian rupee has declined further against the US dollar to Rs. 59.52 today. At this exchange rate, India's GDP is down to $1.68 trillion, about $200 billion less than it was in  Fiscal 2011-12.

Meanwhile,  Pakistan's economy continues to struggle with its annual GDP rising just 3.6% to $252 billion ($242 billion at Rs. 100 to a USD exchange rate)  in fiscal 2012-13, according to Economic Survey of Pakistan 2012-13 estimates based on 9 months data. The country is facing militancy and energy shortages impacting its economy.