tag:blogger.com,1999:blog-5848640164815342479.post518184784546419582..comments2024-03-27T15:36:44.737-07:00Comments on Haq's Musings: Pakistani Diaspora Bucks Global Trend With 2.8% Higher Remittances in 2016Riaz Haqhttp://www.blogger.com/profile/00522781692886598586noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-5848640164815342479.post-35030436598646007962018-08-15T20:32:06.647-07:002018-08-15T20:32:06.647-07:00#Remittances from #diaspora keep #Pakistan's e...#Remittances from #diaspora keep #Pakistan's economy afloat. Estimates average from $1.7 to $1.9 billion a month, adding up to $22 billion per year. #IMF #Reserves #bailout #exports #trade #imports <br /> https://www.khaleejtimes.com/remittances-keep-pakistans-economy-afloat<br /><br />Pakistan's economic lifeline is its remittances. A staggering $2billion from overseas Pakistanis per month on an average is a blessing in disguise for the cash-starved economy and has widely helped in balancing payments towards imports, especially oil. They have acted as a catalyst in growth and investments. Undisputedly, it is one of the primary sources of foreign exchange reserves for the country and for an economy, which is ridden with inflation and slump in exports, the annual subscription of more than $25 billion acts as its backbone.<br /><br />The good point is that despite somersaults on the global economic level and a nosedive, Pakistanis have stood fast in retaining their culture of remitting back home, and have widely entrusted the country's banks and other legal avenues for transfer of funds. Despite a wide gap in the dollar rates in open and banking markets, overseas Pakistanis preferred to send money mostly through the banking channel. This reflects their confidence in the government, as well as banks operating in Pakistan. The State Bank of Pakistan, in one of its recent reports, said that Pakistan has fared relatively better than other regional countries concerning foreign remittances.<br /><br />Estimates say an average of $1.7 to $1.9 billion is received on a monthly basis, which accounts for a staggering $22 billion per annum. Most of the remittances are from the Middle East and Gulf countries, especially Saudi Arabia, the UAE, and Oman. Payments from all important destinations, except Saudi Arabia, showed positive growth. Inflows from the kingdom declined 7.5 per cent during the last fiscal year to the tune of 5.5 per cent. Nonetheless, Pakistan received $2.5 billion from Saudi Arabia in the year 2017. The second highest inflow is from the United Arab Emirates, which increased 1.13 per cent to $2.2bn.<br /><br />A silent but sizeable chunk of remittances, although on a quarterly and six-monthly basis, are also registered from the United States, the European Union, South Africa and Australia. Many of the Far East Asian countries, especially Malaysia and Hong Kong, Korea and Japan also are potential remittances pockets. Remittances from the US have also seen an upward trend by around 10 per cent, to cross the barrier of one billion dollars per quarter. Similarly, inflows from the UK also recorded an increase of 23 per cent to $1.35 billion.<br /><br />This primarily acts as seed money for the country's balance of payments, and to a great extent compensates for lack of foreign investment and slowdown in portfolio investments. The pre-budget Economic Review, however, estimated that remittances could grow by 50 per cent if the government provides due incentives to its non-resident citizens, and ensures that their foreign exchange is safe and reusable in the same currency. Likewise, remittances directly deposited in Pakistani bank accounts can also get a boost and shoot up to $100 billion - a retained safe territory, if stringent measures are taken and assurances on withdrawals limits are waived.<br /><br />The free flow of foreign currency in the form of remittances can lift the economy to new heights. Pakistani foreign currency accounts maintained abroad are in billions of dollars, and a submission in the Senate of Pakistan said that they account for around $800 billion. That money sooner than later should be in the mainstream of Pakistan economy, provided anti-money laundering policies get thumbs up.<br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-88489139282070021112017-05-01T09:37:25.798-07:002017-05-01T09:37:25.798-07:00Anon: "Pakistan being an agricultural based e...Anon: "Pakistan being an agricultural based economy can't expect to have high GDP growth.<br />Manufacturing based economies like china and services based economies like Singapore can expect high GDP growth."<br /><br /><br />Agriculture output in Pakistan accounts for only 20% of GDP while services account for 55% and manufacturing 25%. <br /><br /><br />The problem is that Pakistan, like many other countries, does not accurately account for output and growth in service and manufacturing sectors. <br /><br /><br />Here's found State Bank of Pakistan reported about inadequacy of measuring manufacturing output:<br /><br /><br />"In terms of LSM growth, a number of sectors that are showing strong performance; (for example, fast moving consumer goods (FMCG) sector; plastic products; buses and trucks; and even textiles), are either under reported, or not even covered. The omission of such important sectors from official data coverage, probably explains the apparent disconnect between overall economic activity in the country and the hard numbers in LSM." State Bank of Pakistan Annual Report 2014<br /><br /><br />http://southasiainvestor.blogspot.com/2015/01/pakistans-official-gdp-figures-ignore.html<br /><br />More recently, economist Shahid Javed Burki said some of the methods that Pakistan was using and the surveys that collected required data were seriously outdated. Pakistan was also not correctly estimating the size of its modern services – in particular information, communications, entertainment, travel and advanced commerce. All these sectors contribute much more to the economy than suggested by official numbers, he wrote.<br /><br />https://tribune.com.pk/story/1397094/dissatisfied-size-pakistans-economy-dar-authorises-world-bank-study/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-22225025114375630032017-05-01T08:55:37.114-07:002017-05-01T08:55:37.114-07:00Pakistan being an agricultural based economy can&#...Pakistan being an agricultural based economy can't expect to have high GDP growth.<br />Manufacturing based economies like china and services based economies like Singapore can expect high GDP growth.<br /><br />Pakistan needs to focus on manufacturing as for services companies won't invest due to prevailing security scenario.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-10473388436732987732017-04-30T14:52:03.493-07:002017-04-30T14:52:03.493-07:005% growth is decent, but at Pakistan's level o...5% growth is decent, but at Pakistan's level of development it should be doing 7-8%. I think we will get a clearer picture of the society and economy once the census is completed, and next year GDP should be rebased for the first time in about 15 years. I would not be surprised if rebasing shows the GDP is 20% larger than currently reported. Given the facts on the ground (rising consumption and stock prices and corporate profits), I think GDP growth has been running faster than the current statistics are showing.nayyer alinoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-84781922234237610342017-04-25T16:40:12.219-07:002017-04-25T16:40:12.219-07:00Ahmad: "Not good. Why did it come to this?&qu...Ahmad: "Not good. Why did it come to this?"<br /><br />It was generally expected that Pakistan's imports would significantly rise with progress on CPEC projects. What was not expected is the huge drop in exports. <br /><br />In fact, the Pakistan government set an ambitious $35 billion exports target for current year, up from $24 billion last year. <br /><br />In reality, Pakistan's exports have tumbled to $15 billion in the first 9 months due to softness in export markets and increased competition from cheaper garment exports from Bangladesh. <br /><br />Pakistan needs to diversify its exports from textiles and garments to more higher value goods to remain competitive. Hopefully, with Chinese labor getting relatively more expensive, Pakistan will get FDI from China to build some more products in CPEC export zones being set up in Pakistan. <br /><br />Meanwhile, Pakistan will need to be bailed out by the Chinese to maintain its dollar reserves at a reasonable level with growing imports. Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-80598140905997639552017-04-25T16:39:30.376-07:002017-04-25T16:39:30.376-07:00Not good. Why did it come to this? Not good. Why did it come to this? Ahmed F.noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-34086730048279053242017-04-25T07:52:44.635-07:002017-04-25T07:52:44.635-07:00China bails out Pakistan with over $1bn in loans
...China bails out Pakistan with over $1bn in loans<br /><br />Rising imports and falling exports and remittances pose threat of new forex crisis<br /><br />https://www.ft.com/content/3ae64c9a-ffd8-11e6-96f8-3700c5664d30<br /><br /><br /> China has provided Pakistan with over $1bn in bailout loans since June last year, as the south Asian country looks to stave off a foreign currency crisis that could yet lead to another multinational rescue package. <br /><br /><br /> State-backed Chinese banks have come to Pakistan’s rescue on two separate occasions, officials have told the Financial Times, with $900m coming in 2016, followed by another $300m in the first three months of this year.<br /><br />The loans demonstrate the perilous fragility of Pakistan’s stocks of foreign currency, which have been depleted in the past few months as imports have risen while both exports and inbound remittances from Pakistanis abroad have fallen. <br /><br />China’s financial help also underlines the increasingly close, if complex, relationship between the two Asian neighbours. <br /><br />In 2013, Pakistan secured a $6.6bn loan from the International Monetary Fund after being faced with a similar balance of payments crisis. In the same year, it quietly took advantage of a currency swap line with the People’s Bank of China, the central bank, to shore up its reserves. <br /><br />Islamabad made the final repayment on the IMF loan last year, prompting optimism from policymakers in Pakistan and abroad that the country was finally on the path to economic stability. Christine Lagarde, the head of the IMF, called it a “moment of opportunity” for the country.<br /><br />In recent months however, the country’s trade deficit has widened, depleting its foreign reserves once more.<br /><br />Figures from the State Bank of Pakistan show the country had $17.1bn of net reserves at the end of February, down from $18.9bn at the end of October and a peak of $25bn several years ago. A burgeoning trade deficit with China — which has doubled in recent years, according to data from the Pakistan Business Council — is a big part of the problem.<br /><br /><br /><br /> This has forced the country to seek emergency loans from outside sources to keep being able to repay older loans made in foreign currencies.<br /><br />Of the $1.2bn from the Chinese institutions, $600m came from the government-run China Development Bank and another $600m from the state-owned Industrial and Commercial Bank of China, the only mainland bank to have a branch in Pakistan. Policy banks such as CDB often act on behalf of the central bank. <br /><br />One Pakistani official said: “China keeps a very close eye on our economic trends and they're happy to come to our help wherever needed.”<br /><br />The recent deterioration is expected to continue, however, with China’s investment plans prompting a surge of imports from that country. As a result, experts are now warning Pakistan is likely to have to return to international institutions such as the IMF for further support. <br /><br />“Technically speaking we should have gone back to the IMF in January, but ministers are likely to try and wait until after the election [which is planned for 2018],” said Vaqar Ahmed, deputy executive director of the Islamabad-based Sustainable Development Policy Institute. <br /><br />One member of the ruling PML-N party confirmed to the Financial Times that ministers were loath to return to the IMF until after the election in an effort to limit the political fallout.<br /><br />“The IMF is a politically volatile issue in our country. If we go to the IMF to deal with our needs, that will send a very negative political signal and the opposition [parties] will use that against the government,” the person said.<br /><br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-90482076871642461632017-04-25T01:50:33.984-07:002017-04-25T01:50:33.984-07:00With 46 bn dough coming in from chaptas why are yo...With 46 bn dough coming in from chaptas why are you bothered about small things like CAD, remittances etc<br /><br />RegardsMajumdarnoreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-39492061886782295522017-04-24T22:25:26.651-07:002017-04-24T22:25:26.651-07:00Amjad: " Is this my imagination or these figu...Amjad: " Is this my imagination or these figures are for South Asia only? There are many other countries with foreign remittances like Mexico, Philippines and China"<br /><br /><br />My post focuses mainly on South Asia.<br /><br />Globally, India is the biggest recipient of remittances followed by China (2) , Philippines(3) , Mexico(4) and Pakistan (5).<br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-27393085201233503242017-04-24T22:24:46.957-07:002017-04-24T22:24:46.957-07:00Is this my imagination or these figures are for So...Is this my imagination or these figures are for South Asia only?<br /><br />There are many other countries with foreign remittances like Mexico, Philippines and China<br />Amjad M.noreply@blogger.com