I’m sick and tired of all this daily BS. Suddenly, everyone is economy expert. There’s no harm in asking if you don’t know. if you don’t know stop spreading disinformation. How difficult it is to understand the difference between economic growth & economic development? whenever someone reports on economy growth youthias bring some stats from Mars, stop comparing apples and oranges.
FIRST THING FIRST, Economic growth (Increase in GDP) is POSSIBLE without economic development. (got it?!)
That’s good or bad is another debate just don’t mix them (will get to Economic development in this blog later, don’t worry), let’s see how Pakistan is doing on economic growth & economic development (just realized i used “economic growth” & “economic development” a-lot so will be using EG & ED from here on). to access the EG we’ll look into the following indicators:
- Pakistan Stock Market
- Pakistan GDP
- Pakistan GDP growth rate/Annual growth rate
- Pakistan GDP per capita
- Pakistan GDP per capita (PPP)
- Pakistan Inflation Rate
- Pakistan Food Inflation
- Pakistan Interest Rate
- Pakistan Exports
- Pakistan Remittances
- Pakistan Foreign Exchange Reserves
instead of just talking or listening to “experts on TV” let’s compare some of the figures (yeh stats & figures “wikipedia” say nahi hain, so youthias say peishgi ma’azrat) from past with todays and decide.
while writing all this i got an idea, why only state figures of Pakistan why not compare it too with other (developed, developing) countries? will try to compare each indicator with others too.
- Pakistan Stock Market (KSE100):
Stock Exchange have multiple roles in the economy, such as:
- Raising capital for businesses;
- Facilitating company growth;
- Redistribution of wealth;
- Corporate governance;
- Investment opportunities for small investors;
- Government capital raising for development projects;
- Tax – KSE is one of the largest tax payer. Listed companies in KSE contributes over 10% of total revenue collected to the government of Pakistan.
A stock index is a measurement of the value of a section of the stock market.[KSE-100 Index] is major stock market index which tracks the performance of largest companies/groups by market capitalization from each sector of Pakistan economy listed on Karachi Stock Exchange.
Stock Market in Pakistan averaged 7931.23 Index points from 1990 until 2015, reaching an all-time high of 36228.88 Index points in August of 2015 and a record low of 538.89 Index points in June of 1990.
let’s compare it with some other countries:
US: Stock Market in the United States averaged 2649.31 Index points from 1912 until 2015, reaching an all time high of 18312.39 Index points in May of 2015
UK: The United Kingdom Stock Market (FTSE 100) averaged 3682.40 Index points from 1978 until 2015, reaching an all time high of 7103.98 Index points in April of 2015.
Germany: Germany Stock Market (DAX) averaged 3183.35 Index points from 1970 until 2015, reaching an all time high of 12374.73 Index points in April of 2015.
China: Stock Market in China averaged 1766.99 Index points from 1990 until 2015, reaching an all time high of 6092.05 Index points in October of 2007.
India: Stock Market in India averaged 7056.82 Index points from 1979 until 2015, reaching an all time high of 29681.77 Index points in January of 2015.
- Pakistan Gross Domestic Product (GDP):
Gross Domestic Product (GDP) is the most important of all economic indicators as it attempts to capture the state of the economy in one number. Quite simply, if the GDP measure is up, the economy is growing. If it is negative it is contracting.
GDP has a large impact on nearly everyone within that economy. For example, when the economy is healthy, you will typically see low unemployment and wage increases as businesses demand labor to meet the growing economy. A significant change in GDP, whether up or down, usually has a significant effect on the stock market. It’s not hard to understand why: a bad economy usually means lower profits for companies, which in turn means lower stock prices. Investors really worry about negative GDP growth, which is one of the factors economists use to determine whether an economy is in a recession.
The GDP in Pakistan was worth 246.88 billion US dollars in 2014. GDP in Pakistan averaged 59.62 USD Billion from 1960 until 2014, reaching an all-time high of 246.88 USD Billion in 2014 and a record low of 3.71 USD Billion in 1960. GDP in Pakistan is reported by the World Bank Group.
comparison to other countries:
U.S: GDP in the United States averaged 6353.60 USD Billion from 1960 until 2014, reaching an all time high of 17419 USD Billion in 2014.
UK: GDP in the United Kingdom averaged 1045.83 USD Billion from 1960 until 2014, reaching an all time high of 2963.10 USD Billion in 2007.
Germany: GDP in Germany averaged 1832.82 USD Billion from 1970 until 2014, reaching an all time high of 3852.56 USD Billion in 2014.
China: GDP in China averaged 1437.13 USD Billion from 1960 until 2014, reaching an all time high of 10360.10 USD Billion in 2014.
India: GDP in India averaged 550.27 USD Billion from 1970 until 2014, reaching an all time high of 2066.90 USD Billion in 2014.
- Pakistan GDP growth rate/Annual growth rate:
Real Economic Growth Rate is the rate at which a nation’s Gross Domestic product (GDP) changes/grows from one year to another. GDP is the market value of all the goods and services produced in a country in a particular time period.
Real Economic Growth Rate takes into account the effects of inflation. Since inflation plays a key role in the GDP of an economy, it is very important to ascertain the effects of inflation on GDP. As a result, the Real Economic Growth Rate takes into account the buying power and is inflation-adjusted. This is the reason it is considered to be a better measure of growth rate than the nominal growth rate.
The Gross Domestic Product (GDP) in Pakistan expanded 4.14 percent in 2014 from the previous year. GDP Growth Rate in Pakistan averaged 4.92 percent from 1952 until 2014, reaching an all-time high of 10.22 percent in 1954 and a record low of -1.80 percent in 1952. GDP Growth Rate in Pakistan is reported by the Pakistan Bureau of Statistics.
in comparison to US, UK, Germany, China & India:
- Pakistan GDP per capita:
GDP per capita is a measure of average income per person in a country. GDP per capita divides the GDP by the population.
The Gross Domestic Product per capita in Pakistan was last recorded at 818.87 US dollars in 2014. The GDP per Capita in Pakistan is equivalent to 6 percent of the world’s average. GDP per capita in Pakistan averaged 489.98 USD from 1960 until 2014, reaching an all-time high of 818.87 USD in 2014 and a record low of 219.37 USD in 1960. GDP per capita in Pakistan is reported by the World Bank.
in comparison to other countries:
US: GDP per capita in the United States averaged 31261.08 USD from 1960 until 2014, reaching an all time high of 46405.26 USD in 2014
UK: GDP per capita in the United Kingdom averaged 27152.82 USD from 1960 until 2014, reaching an all time high of 41567.28 USD in 2007
Germany: GDP per capita in Germany averaged 28937.39 USD from 1970 until 2014, reaching an all time high of 39717.70 USD in 2014
China: GDP per capita in China averaged 873.24 USD from 1960 until 2014, reaching an all time high of 3865.88 USD in 2014
India: GDP per capita in India averaged 477.50 USD from 1960 until 2014, reaching an all time high of 1262.64 USD in 2014
- Pakistan GDP per capita (PPP):
Purchasing power parity (PPP) is a technique used to determine the relative value of different currencies. The concept of purchasing power parity allows one to estimate what the exchange rate between two currencies would have to be in order for the exchange to be at par with the purchasing power of the two countries’ currencies.
For example, suppose that two countries produce the same physical amounts of goods as each other in each of two different years. Since market exchange rates fluctuate substantially, when the GDP of one country measured in its own currency is converted to the other country’s currency using market exchange rates, one country might be inferred to have higher real GDP than the other country in one year but lower in the other; both of these inferences would fail to reflect the reality of their relative levels of production. But if one country’s GDP is converted into the other country’s currency using PPP exchange rates instead of observed market exchange rates, the false inference will not occur.
The Gross Domestic Product per capita in Pakistan was last recorded at 4619.28 US dollars in 2014, when adjusted by purchasing power parity (PPP). The GDP per Capita, in Pakistan, when adjusted by Purchasing Power Parity is equivalent to 26 percent of the world’s average. GDP per capita PPP in Pakistan averaged 3669.26 USD from 1990 until 2014, reaching an all-time high of 4619.28 USD in 2014 and a record low of 2961.11 USD in 1990. GDP per capita PPP in Pakistan is reported by the World Bank.
In comparison to other countries:
- Pakistan Inflation Rate:
Low inflation rate is self-explanatory. The inflation rate in Pakistan was recorded at 1.72 percent in August of 2015, the lowest since July of 2003. Inflation Rate in Pakistan averaged 7.96 percent from 1957 until 2015, reaching an all-time high of 37.81 percent in December of 1973 and a record low of -10.32 percent in February of 1959. Inflation Rate in Pakistan is reported by the Pakistan Bureau of Statistics.
in comparison to other countries:
- Pakistan Food Inflation:
Cost of food in Pakistan decreased 0.57 percent in August of 2015 over the same month in the previous year. Food Inflation in Pakistan averaged 6.53 percent from 2011 until 2015, reaching an all-time high of 12.99 percent in November of 2013 and a record low of -1.05 percent in April of 2015. Food Inflation in Pakistan is reported by the Pakistan Bureau of Statistics
In comparison to other countries:
- Pakistan Interest rate:
Interest rates are another important indicator of economic growth. They represent the cost of borrowing money. These rates change as a result of economic and market events.
When the rate increases, banks and other lenders have to pay higher interest rates to obtain money. They, in turn, lend money to borrowers at higher rates to compensate, which thereby makes borrowers more reluctant to take out loans. This discourages businesses from expanding and consumers from taking on debt. As a result, GDP growth becomes stationary.
The central bank of Pakistan reduced interest rates to a 42-year-low of six per cent, after inflation fell dramatically. It is the fourth rate cut this year. Interest Rate in Pakistan averaged 11.86 percent from 1992 until 2015, reaching an all-time high of 19.50 percent in October of 1996 and a record low of 6.50 percent in May of 2015. Interest Rate in Pakistan is reported by the State Bank of Pakistan.
In comparison to other countries:
- Pakistan Exports:
When the level of exports of a country increases the national income of that country will increase. An increase in exports means that more employment opportunities have emerged in the nation, more exports means more goods have been produced which require more labor. An increase in exports will also improve the balance of trade of a country.
Exports in Pakistan increased to 187737 PKR Million in August from 162532 PKR Million in July of 2015. Exports in Pakistan averaged 35468.07 PKR Million from 1957 until 2015, reaching an all-time high of 275483 PKR Million in September of 2013 and a record low of 51 PKR Million in April of 1958. Exports in Pakistan is reported by the Pakistan Bureau of Statistics.
in comparison to other countries:
- credit ratings:
Credit ratings give investors insight into the level of risk associated with investing in a particular country and also include political risks. At the request of the country, a credit rating agency will evaluate the country’s economic and political environment to determine a representative credit rating. Obtaining a good sovereign credit rating is usually essential for developing countries in order to access funding in international bond markets.
Another common reason for obtaining sovereign credit ratings, other than issuing bonds in external debt markets, is to attract foreign direct investment. To give investors’ confidence in investing in their country, many countries seek ratings from credit rating agencies like Standard and Poor’s, Moody’s, and Fitch to provide financial transparency and demonstrate their credit standing.
Pakistan’s credit ratings from S&P, Moody’s, Fitch (updated today 15-09-2015) & TE in comparison to other countries like Australia, Bangladesh, Canada, China, France, Germany, India, Philippines, Singapore, South Africa, Sri Lanka & Turkey.
- Pakistan Remittances:
Remittances constitute an important mechanism for the transfer of resources from developed to developing countries. Actually the term “remittances” can be defined as financial inflow to home country from abroad by migrant. It has become an important source of foreign exchange earnings for developing economies. The remittance is paramount indicator of economic condition for the remittances recipient’s economies
Remittances in Pakistan increased to 5125 USD Million in the second quarter of 2015 from 4347 USD Million in the first quarter of 2015. Remittances in Pakistan averaged 2271.79 USD Million from 2002 until 2015, reaching an all-time high of 5125 USD Million in the second quarter of 2015 and a record low of 906 USD Million in the third quarter of 2003. Remittances in Pakistan is reported by the State Bank of Pakistan.
- Pakistan Foreign Exchange Reserves:
Foreign Exchange reserve can be defined as deposits of a foreign currency held by the central bank of a country. It is important for a country to have good amount of foreign exchange reserves, it increases the confidence in the monetary and exchange rate policies of the government, it enhances the capacity of the central bank of the country to intervene in the foreign exchange market and control any adverse movement and stabilize the foreign exchange rates to provide a more favorable economic environment for the progress of the country, during time of any crisis foreign exchange reserves come to the rescue of any country so as to absorb the distress related to such crisis.
Foreign Exchange Reserves in Pakistan increased to 18816.80 USD Million in July from 18705.70 USD Million in June of 2015. Foreign Exchange Reserves in Pakistan averaged 13847.23 USD Million from 1998 until 2015, reaching an all-time high of 18816.80 USD Million in July of 2015 and a record low of 1973.60 USD Million in December of 1999. Foreign Exchange Reserves in Pakistan is reported by the State Bank of Pakistan.
Now the most debatable & Pakistan’s most favorite:
- External/Foreign Debt
External/Foreign debt is simply the money that a government owes either to other countries, or private individuals and organizations that belong to other countries. Almost every country in the world borrows money from other countries, regardless of whether the country is rich or not. Because the world economy is so inter-connected, it is sometimes easier for a government to borrow from other countries than to borrow domestically. Borrowing on a state level is not unlike borrowing individually: cash becomes immediately available; it allows for expenses to be paid when one does not have the spending power. There’s nothing necessarily wrong with borrowing – as long as one is able to pay the money (with interest) back on time.
Country List – Government Debt to GDP (%age)
Pakistan’s per capita debt is approx. $987 [13/10/2015] (PKR 103000), let’s compare this to other countries:
Debt per capita USD:
|Amount per capita||Countries|
|$50,001-250,000||Netherlands, United Kingdom, Switzerland, Norway, Belgium, Hong Kong, Denmark, Sweden, Austria, France, Germany, United States, Australia, New Zealand, Ireland, Spain|
|$20,001-50,000||Portugal, Puerto Rico, Greece, Italy, Qatar, Cyprus, Canada, Finland, Slovenia, UAE, Japan.|
|$10,001-20,000||Kuwait, Seychelles, Hungary, Malta, Croatia, Bahrain, Israel, Slovakia|
|$5,001-10,000||Lebanon, Azerbaijan, Czech Republic, Malaysia, Cook Islands, South Korea, Taiwan, Sweden, Bulgaria, Kazakhstan, Lithuania, Argentina, Chile, Poland, Turkey, Latvia, Syria, Romania|
|$1,001-5,000||Aruba, Jamaica, Serbia, Uruguay, Mauritius, Panama, Russia, Indonesia, Grenada, Saudi Arabia, Ukraine, Oman, Maldives, Belarus, Bermuda, China, Mexico, Georgia, Venezuela, Cuba, Tunisia, Estonia, Iraq, South Africa, Brazil, Armenia, Thailand, Columbia, Guatemala, Peru, Bahamas, Guyana, Greenland|
|$501-1,000||Ecuador, Turkmenistan, Libya, Samoa, Sudan, Angola, Montenegro, Jordan, Laos, Albania, Sri Lanka, Tango, Morocco, Pakistan, Kyrgyzstan, Mongolia, Philippines, Zimbabwe, Djibouti, North Korea,|
|$201-500||Honduras, Swaziland, Palestine, Egypt, India, Somalia, Vietnam, Senegal, Yemen, Bolivia, Ghana, Zambia, Tajikistan, Kenya,|
|$30-200||Congo, Niger, Iran, Burundi, Cameroon, Nepal, Chad, Fiji, Bangladesh, Madagascar, Burma, Algeria, Nigeria, Ethiopia, Liberia, Haiti.|
Pakistan in comparison to other countries:
Before i get into Economic Development, Let us see how “NAWAZ SHARIF KI HAKOOMAT KHA GAI SAB, ITNA TAX PETROL PAR? SARI DUNIYA MAIN PETROL SASTA YEH KYUN ITNA KAM REDUCE KAR RAHAY”
Petrol prices in Pakistan as on 07/09/2015 [current price is even lower], The average price of petrol around the world is Rs.110.32. Petrol in Pakistan is Rs. 36.56 lesser than the world average (Rs. 110.32).
Youthiyas: KUM HAI TO KYA HUA? ITNA TAX CHARGE KARTAY HAIN..
lets check out the fuel prices around the world & Tax component. many countries have Tax component 120+% These stats are of June, 2015 but still the same (Tax components).
now to access Economic development, lets have a look into the following indicators:
|GDP||GDP (USD Billion)||3.8||10.8||72.3||246.88|
|Income||Per capita Income USD||85||170||495||1513|
|– Registered Doctors||000 nos.||–||6.3||110.5||175.2|
|-Registered Nurses||000 nos.||–||2.9||49||90.3|
|-Registered Dentists||000 nos.||–||0.7||6.1||15.1|
|-Rural Health Centers||nos.||–||1||494||671|
|-Beds in Hospitals||000 nos.||–||38.4||99.1||118|
|-Expenditure on Health||%age of GDP||–||0.6||0.6||0.4|
|Before comparing 0.4% to 0.6% have a look at $246.88 Bln. & $72.3 Bln.|
|-Primary School||(000 nos.)||–||–||155.2||158.7|
|-Middle School||(000 nos.)||–||–||31.9||43.2|
|-High School||(000 nos.)||–||–||18.6||32.6|
|-Expenditure on Education||%age of GDP||–||–||1.7||2.1|
|Agriculture||Production & Manufacturing|
|-Total cropped area||Mln. hectares||–||–||22.9||22.7|
|Fertilizer offtake||Mln. N/tons||–||–||3.3||3.3|
|-Credit Disbursed||Billion Rs.||–||–||113||326|
|-Cotton yarn||Mln. Kg||–||–||2236||2304|
|-Cotton cloth||Mln. Sq. M.||–||–||763||777|
|-Soda Ash||000 Tons||–||–||292.6||319|
|-Caustic Soda||000 Tons||–||195||128.2|
|-Jute Goods||000 Tons||–||105||71.7|
|Infrastructure||Energy, Transport & Communications|
|Crude oil extraction||Mln. Barrels||–||23.5||26.2|
|Electricity Installed Capacity||000MW||–||17.8||23.3|
|Motor vehicle on road||Mln. Nos.||–||5.3||13.9|
|Post offices||000 nos.||–||12.3||12.1|
|Mobile Phones||Mln. nos||–||2.4||134.9|
wanted to write on each ED indicator in detail but it’s already too lengthy, some other day maybe.
Thank you for reading.