Haq's Musings

Riaz Haq writes this data-driven blog to provide information, express his opinions and make comments on many topics. Subjects include personal activities, education, South Asia, South Asian community, regional and international affairs and US politics to financial markets. For investors interested in South Asia, Riaz has another blog called South Asia Investor at http://www.southasiainvestor.com and a YouTube video channel https://www.youtube.com/channel/UCkrIDyFbC9N9evXYb9cA_gQ

Sunday, November 30, 2025

IMF Questions Modi's GDP Data: Is India's Economy Half the Size of the Official Claim?

The Indian government reported faster-than-expected GDP growth of 8.2% for the September quarter. It came as a surprise to many economists who were expecting a slowdown based on the recent high-frequency indicators such as consumer goods sales and durable goods production, as well as two-wheeler sales. At the same time, The International Monetary Fund expressed doubts about the Indian government's GDP data.

The IMF has recently expressed doubts about Prime Minister Narendra Modi's BJP government's GDP data. It has particularly questioned the government's statistical methodologies, inflation measurement, and the estimates of the informal economy used in reporting the country's gross domestic product. Professor Arun Kumar of Jawaharlal Nehru University believes the IMF's concerns are valid. He thinks the real size of India's economy is only half of what is officially claimed. “The economy is almost 50% wrong – when the government says it’s $3.8 trillion, my estimate is it is probably still $2.5 trillion because we are overestimating the unorganized sector, which is actually declining. This is building up over a period of time,” Kumar told Indian journalist Karan Thapar.

In its recent assessment, the International Monetary Fund (IMF) has given a "C" grade to India's national accounts. In particular, the IMF has raised the issue of the government using 2011-12 as the base year as being outdated, the discrepancy between production and consumption data and the use of Wholesale Price Index, and not a Producer Price Index, to deflate many economic activities to derive real GDP from nominal GDP.

The source of the biggest error is the way India estimates the informal economy which, including agriculture, accounts for almost 45% of GDP. To do so, India uses the formal sector as a proxy to estimate the performance of the informal sector. But if the two sectors are moving in opposite directions, as has happened after demonetization, GST imposition and the pandemic, you could end up overestimating the unorganized sector.

Indian-American economist Ashoka Mody, author of "India is Broken", has argued that the current unemployment crisis in India is a direct result of the destruction of the informal sector, particularly the mom and pop stores that employed a large number of Indians.

Questions about the veracity of India's official GDP figures are not new. These have been raised by many top economists. For example, French economist Thomas Piketty argues in his best seller "Capital in the Twenty-First Century that the GDP growth rates of India and China are exaggerated. Picketty writes as follows:

"Note, too, that the very high official growth figures for developing countries (especially India and China) over the past few decades are based almost exclusively on production statistics. If one tries to measure income growth by using household survey data, it is often quite difficult to identify the reported rates of macroeconomic growth: Indian and Chinese incomes are certainly increasing rapidly, but not as rapidly as one would infer from official growth statistics. This paradox-sometimes referred to as the "black hole" of growth-is obviously problematic. It may be due to the overestimation of the growth of output (there are many bureaucratic incentives for doing so), or perhaps the underestimation of income growth (households have their own flaws)), or most likely both. In particular, the missing income may be explained by the possibility that a disproportionate share of the growth in output has gone to the most highly remunerated individuals, whose incomes are not always captured in the tax data." "In the case of India, it is possible to estimate (using tax return data) that the increase in the upper centile's share of national income explains between one-quarter and one-third of the "black hole" of growth between 1990 and 2000. "

Monday, November 24, 2025

Retail Investor Growth Driving Pakistan's Bull Market

Pakistan's benchmark index KSE-100 has soared nearly 40% so far in 2025, becoming Asia's best performing market, thanks largely to phenomenal growth of retail investors. About 36,000 new trading accounts in the South Asian country were opened in the September quarter, compared to 23,600 new registrations just three months ago, according to Topline Securities, a brokerage house in Pakistan. Broad and deep participation in capital markets is essential for economic growth and wealth distribution in any country.

Pakistan's KSE-100 Index Chart. Source: Bloomberg

Increase in trading accounts is helping inflows into local equity mutual funds as well. As much as 16% of total assets managed by asset management companies is now invested in stocks at the end of September, up from 9% at the start of the year, according to data from the Mutual Funds Association of Pakistan, as recently reported by Bloomberg.

Pakistan Investment Accounts Growth. Source: Bloomberg

Massive growth in retail investors is being enabled by increasing digital penetration in Pakistan. The country now boasts 152 million broadband subscribers, bringing the digital penetration to 61.1% as of October 2025, according to the Pakistan Telecommunications Authority (PTA). Pakistan ranks among the world's top 10 nations in terms of Internet and smartphone users. Most of the brokerage houses now offer online trading accounts and mobile apps for retail investors.

Pakistan Telecommunications Indicators. Source: PTA

KSE-100 companies profitability has grown over 13% in 2025. Stocks in the KSE-100 index have an average dividend yield of approximately 5.81% to 5.9%, with a historical average closer to 6.11%. The current yield is considered attractive, especially when compared to its 15-year average price-to-earnings (P/E) ratio of 8.59x, which is a significant discount to other emerging markets which are currently trading at a P/E ratio of 15.86x.

Sharp Drop in Pakistan's Debt Default Risk. Source: Bloomberg

Pakistan’s debt default risk has seen a sharp drop as the country’s economy has stabilized under an IMF program. The nation's GDP for the April-June period grew at 5.66%, higher than the 3.1% expansion predicted by economists in a Bloomberg survey. The large scale manufacturing (LSM) sector saw 4.08% growth in the first quarter of the current fiscal year.

Pakistan is experiencing rapid growth in Fintech (financial technology) applications. The country's journey to build a digital public infrastructure (DPI) began in March 2000 with the establishment of NADRA, the National Database and Registration Authority. The Gates Foundation defines DPI as follows: "DPI is a digital network that enables countries to safely and efficiently deliver economic opportunities and social services to all residents. DPI can be compared to roads, which form a physical network that connects people and provides access to a huge range of goods and services...... strong DPI has three foundational systems—identity, payments, and data exchange—that together can make life easier in important ways".

Monday, November 17, 2025

PIMEC 2025: Pakistan Plans to Boost Maritime Sector, Blue Economy

Pakistan recently held its second International Maritime Expo and Conference (PIMEC-25) in Karachi where it announced ambitious plans to expand its maritime sector and boost its blue economy. It is an initiative of the Pakistan Navy, organized under the patronage of the Ministry of Maritime Affairs. The country plans to invest a $100 billion in maritime development by expanding its national shipping fleet, building three new deep sea ports, adding a new shipyard at Gwadar, modernizing its fisheries, and upgrading maritime education. The plan called "Maritime @100" focuses on turning Pakistan into a regional maritime hub for trade, energy, food, and sustainability. It aims to increase the sector's GDP contribution from the current 0.4%-0.8% to 4% by 2047.

PIMEC 2025. Source: Lovin Karachi

Pakistan has a 1,046 kilometers long coastline on the Arabian Sea with maritime sovereignty over 200 nautical miles deep Exclusive Economic Zone (EEZ) and 150 nautical miles of Continental Shelf. This adds 290,000 square kilometers of sea or about 36% of the country's land area open for tapping vast resources in it.

Pakistan's "Blue Economy" in this extended economic zone includes seafood and energy resources as well as international trade connectivity with the rest of the world. It offers opportunities for water sports, recreation and tourism in the coastal areas of Pakistan. The country recently awarded licenses for 23 offshore exploration blocks to four consortiums led by local energy companies, some partnered with foreign firms including Turkey's national oil company TPAO. These blocks cover an area of 53,500 square kilometers.

PIMEC-25 attracted 178 exhibitors, including 28 international firms and 150 local organizations, alongside 133 international delegations representing 44 countries from Europe, Asia, the Americas, Africa, the Middle East, and the Far East. Participants showcased a wide array of innovations, from uncrewed underwater vehicles (UUVs) and drone jamming guns to advanced port technologies, showcasing Pakistan’s growing role in regional maritime trade.

Zarwah Enterprises, a startup led by Minahil Yousaf, Pakistan’s first female-led aquaculture company, demonstrated sustainable pond construction and shrimp farming solutions. AquaTech Fisheries, founded by Muhammad Kamran and Ahmad Hussain, presented innovative fish feed and aquaponics systems across Pakistan, including new farms in Punjab.

Woot Tech and Winged Innovative Solutions (WIS) rolled out remote-controlled drones and unmanned surface vessels (USVs) equipped with rotary cameras, designed for surveillance, mapping, and cloud seeding. WIS showcased an unmanned underwater vehicle (UUV) for deep-sea repairs and a portable jammer system for military use. These gadgets highlight how homegrown tech Karachi maritime solutions are supporting both commercial and naval operations.

The National Electronics Complex of Pakistan (NECOP) demonstrated the SAFRAH drone jamming gun, which can disable drones up to 1.5 km away for 40 minutes. NECOP also displayed a maritime logistics drone and the Integrated Platform Management System (IPMS), letting ships monitor multiple systems from a single control point. Another Pakistani defense firm revealed a 25-foot remote-controlled USV capable of traveling 30 km and running for up to five hours.

PakAlumni Social Network

Monday, November 10, 2025

NED University Alum's Chip Startup Acquired by ARM For $265 Million

DreamBig, a fabless semiconductor company founded by NED University alumnus Sohail Syed, has been acquired by Advanced RISC Machines (ARM) for $265 million. The Silicon Valley-based startup is developing networking chips for data centers, with hardware specifically designed to run AI applications. The startup does not manufacture its own chips but instead licenses its designs to other semiconductor companies. It has had a partnership with Samsung’s foundry division to bring its hardware to market.

Sohail Syed, Founder and CEO of DreamBig Semiconductors

Here's how DreamBig Semiconductor describes itself on its website:

"DreamBig Semiconductor is a chiplet-based networking company dedicated to providing comprehensive, high throughput solutions for the AI, Datacenter, edge compute and Automotive markets. Headquartered in San Jose, CA, USA, we have over 200 employees globally and partnerships with the largest semiconductor companies in the world. Founded by RDMA experts and chiplet innovators, DreamBig removes the bottlenecks to on- and off-chip networking, transforming the most important applications on the planet".

Nvidia and several other AI chip companies have licensed ARM's processor core technology for use it in products. Major tech companies including Amazon, Apple, Google, Qualcomm and Samsung are among the ARM licensees. ARM's processor cores are known for their energy efficiency and are widely used in mobile devices, but are increasingly found in servers, desktops, and other applications that require good performance-per-watt. Examples include the Apple M-series processors, which are custom ARM-based CPUs for Macs. Most of the advanced semiconductor chips are manufactured by TSMC (Taiwan Semiconductor Manufacturing Corp) in its fabs located in Taiwan.

DreamBig Semiconductor has established a design center in Pakistan in collaboration with the National University of Sciences and Technology (NUST), which includes a chip design and training center and a chip testing lab. It is a part of Pakistan's broader effort to develop its semiconductor industry, and DreamBig has also sponsored training workshops at universities like the NED University in Karachi and the University of Engineering and Technology (UET) Lahore.

Pakistan has recently launched The INSPIRE Pakistan initiative to train a new generation of semiconductor professionals and enter the global chip design and research market. The initiative, formally named Initiative to Nurture Semiconductor Professionals for Industry, Research & Education, is a five-year plan designed to train over 7,200 professionals and establish Integrated Circuit (IC) labs in universities across the country. It aims to bridge the gap between academia and industry, develop local tech capacity, and position Pakistan as a player in the global semiconductor ecosystem.

Dr. Naveed Sherwani, an NED University alumnus and a serial Silicon Valley entrepreneur, has been instrumental in launching INSPIRE Pakistan initiative. He headed the task force that recommended the initiative to the Pakistani government. Dr. Sherwani is currently the head of the National Semiconductor Hub in Saudi Arabia which aims to attract and develop semiconductor design industry in the Kingdom.

Semiconductors power modern life, forming the core of everything from computers and networking to smartphones and military weapons. Countries such as Pakistan need the knowledge and the human capital trained in semiconductor technology for their long-term economic prosperity and national security. The global semiconductor market size is currently about $600 billion and it is growing rapidly.

Wednesday, November 5, 2025

Mayor-Elect Zohran Mamdani Makes History in New York City

"Ana minkum wa alaikum" declared Zohran Mamdani, the mayor-elect of New York City in his victory speech on November 4, 2025. The phrase translates to "I am from you and and I am with you". "New York will remain a city of immigrants, a city built by immigrants, powered by immigrants and, as of tonight, led by an immigrant", he added. Mamdani is the first Muslim and first immigrant of South Asian descent elected New York City Mayor. At 34, he is not only the youngest but also the first mayor of the Big Apple who was born in Africa.

Zohran Mamdani Speaking Outside the Bronx Islamic Center

With his landslide victory in the mayoral race, Mandani will join London Mayor Sadiq Khan to become the second Muslim mayor of a major western city. Mamdani became the first New York mayoral candidate to win over a million votes since the 1960s — more than Rudy Giuliani or Mike Bloomberg ever received. Mamdani has received 50.4% of the votes counted so far. Cuomo is at 41.6%. Republican Curtis Sliwa is at 7.1%. Mayor Sadiq Khan is serving his third term as the mayor of London. He is of Pakistani descent, as are mayors of several other major British cities.

Zohran Mamdani beat former New York Governor Andrew Cuomo twice, first in the primary and then in the general election, to win on Tuesday. He won in spite of the fact that many prominent Democrats, including Senate Minority Leader Chuck Schumer, the New York senator, refused to endorse him. Mamdani was also vastly outspent by Cuomo, who was backed by a group of Zionist billionaires. President Trump endorsed Cuomo and repeatedly threatened to cut off federal funds to New York if Mamdani won.

Mandani received strong support from Muslims in Silicon Valley and elsewhere. Muhammad Javed of AppLovin tech firm donated $251,500 to New Yorkers for Lower Costs, a super-PAC backing Zohran Mamdani. Omer Hasan gave $250,000 to this super PAC. Other Mamdani super PAC donors include Liz Simons, Philanthropist, and daughter of hedge-fund billionaire Jim Simons, who gave $250,000 and Unity & Justice Fund, the political arm of the Council on American-Islamic Relations CAIR, that gave $100,000. But the biggest support has come from small donors to the Mamdani campaign. It has received a lot more money from small-dollar donors. In August 2025, Mamdani's campaign had raised over $1 million from more than 8,600 private donors, with half of the individual donations being less than $25. His campaign also got millions in public matching funds due to this strong small-dollar donor support.

Mamdani was attacked by his opponents for his Muslim faith. In one appearance, Cuomo agreed with a racist radio host who suggested a Muslim elected official would ‘cheer’ another 9/11. In response, Mamdani made an emotional speech outside a mosque in which he said: "I will not change who I am. I will not change how I eat. I will not change the faith that I am proud to belong to. But there is one thing I will change: I will no longer look for myself in the shadows".

It is particularly noteworthy that Zohran Mamdani, a pro-Palestinian candidate who accuses Israel of carrying out genocide in Gaza, won in New York City which has the world's second largest population Jews after Tel Aviv. During his mayoral campaign, the Zionist-dominated US media kept asking him and other candidates whether Israel would be their first foreign visit if they got elected. Mamdani said no, he would stay in New York City to serve the people. All other candidates in the race pandered to the powerful Israel lobby by saying Israel would be their first foreign visit. Mamdani's win shows that total unqualified support of Israel is not essential to win elections in the United States.

Among the most vocal opponents of Mamdani are Zionist and Hindutva groups in America. This opposition is based on his strong criticism of Indian Prime Minister Modi and Israeli Prime Minister Netanyahu. He has called Modi a "war criminal," drawing parallels between him and Netanyahu. He has repeatedly vowed that, if elected mayor, he would order the New York Police Department (NYPD) to arrest Netanyahu should the Israeli Prime Minister travel to New York.