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China Has a New Growth Challenger -- Pakistan - (Bloomberg)

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    China Has a New Growth Challenger -- Pakistan - (Bloomberg)

    China Has a New Growth Challenger -- Pakistan: Andy Mukherjee

    June 7 (Bloomberg) -- The world's second-fastest growing economy after China is no longer India. It's Pakistan.

    According to figures released over the weekend by Pakistan's Prime Minister Shaukat Aziz, the $110 billion economy is estimated to have grown 8.4 percent in the current fiscal year that ends June 30. That compares with 9.5 percent expansion in China's gross domestic product last year, while India recorded 6.9 percent GDP growth in the 12 months ended March 31.

    Now that Pakistan is within striking distance of China's growth, it aims to catch up. The growth target for the next fiscal year, as set out in the nation's annual budget yesterday, is as much as 8 percent, the same as Beijing's goal for the year.

    That may be a trifle over optimistic. Pakistan isn't yet ready to sustain 8 percent growth year after year -- not until it can push up its savings rate, which is languishing at 14 percent of gross domestic product.

    Inflation is at an eight-year high of 11 percent, a clear indication of an economy overheating from too much consumption. (China's problem is too much investment.)

    Still, another year of strong growth is eminently achievable in Pakistan, provided the central bank can maneuver deftly to suppress inflationary expectations, even as the government goes ahead and steps up investments in public works.

    Even a slightly less rapid expansion than this year would go a long way in boosting personal incomes, which have risen a very impressive 27 percent in U.S. dollar terms in the past two years.

    Sept. 11 `Windfall'

    Sure, Pakistan's retreat from the brink of a balance-of- payment crisis in 1999 had a lot to do with its Sept. 11 ``windfall,'' as some commentators termed it. Pakistan received grants and debt waivers and additional textile quotas from the Bush administration for helping it topple the Taliban in Afghanistan.

    That was in 2001.

    In 2005, what's helping sustain growth isn't U.S. largesse, but a revival of investor interest, which is evident from the list of bidders short-listed by the government for a proposed sale of 26 percent in state-owned Pakistan Telecommunication Co.

    Bidders for the phone service provider, whose market value is about $5.5 billion, include telecom companies from Singapore, China, Malaysia, United Arab Emirates, Turkey and Saudi Arabia.

    Yesterday, the benchmark Karachi Stock Exchange 100 Index plunged 1.5 percent after the government said it would delay the stake sale in the phone company because of pressure from labor unions. The government said it isn't scrapping the sale, which it now expects to go through by end-June.

    2007 Election

    The risk of such setbacks will remain, though the broad outlines of an investor-friendly regime should stay intact at least until 2007 when President Pervez Musharraf will, according to news reports, shed his army uniform and seek re-election as a civilian. Musharraf, an army general, took power in a coup in October 1999, and appointed himself president in June 2001.

    While poverty still remains endemic, and only 18 percent of women aged 35 to 44 are part of the workforce (compared with 96 percent for males in the same age group), a new middle class has started to emerge in Pakistan.

    Private consumption is up 17 percent from a year earlier in the 12 months ending June 30. Per capita income has surged to $736. Once Pakistan crosses the $1,000 threshold, like China did last year, it'll become a middle-income country with a lucrative domestic market of 154 million consumers.

    Further income growth in Pakistan will require new jobs. And there's no sign yet of a reduction in urban unemployment, which has risen almost 3 percentage points in the last nine years to reach 9.7 percent. For now, GDP growth appears to be driven by more productive use of domestic capital, supplemented lately by an inflow of foreign savings. The current account now has a full- year deficit equal to 1.2 percent of gross domestic product.

    Selling Bonds

    Capital flows have been buoyant, as Aziz, a former executive at Citibank NA, has made good use of easy global liquidity conditions to raise cheap money from bond sales.

    From investor such as Temasek Holdings Pte, the Singapore government's investment arm that bought 25 percent of a Pakistani bank in April, it helps that Pakistan's relations with India are improving as businesses in the two fast-growing economies press for closer ties. The neighbors have fought two of their three wars over Kashmir, a half-century-old dispute that remains unsettled.

    There's help coming from another quarter. Raw cotton, yarn, cloth and garments account for three-fifths of Pakistan's overseas shipments. Along with China and India, Pakistan is widely expected to gain from the new quota-free system of global textile trade.

    Yesterday's budget scrapped a 15 percent tax on materials imported by the country's textile industry.

    A textile windfall would be a big bonus for an economy brimming with optimism, and quite deservedly. After all, it has been two decades since it last grew as fast as this year. Mimicking China's growth may be a tough act to follow, but Pakistan seems determined.

    http://quote.bloomberg.com/apps/news...d=aiSFuvMKI2Gw

    #2
    Re: China Has a New Growth Challenger -- Pakistan - (Bloomberg)

    burn, indians, burn
    Adopt me Angelina.

    Comment


      #3
      Re: China Has a New Growth Challenger -- Pakistan - (Bloomberg)

      now thats whats up !
      hamein to apno ne loota gheron mein kahan dam tha....mera scooter wajja wahaan jahaaN rashh kamm tha......

      Comment


        #4
        Re: China Has a New Growth Challenger -- Pakistan - (Bloomberg)

        masha'Allah!
        Courage is going from failure to failure without losing enthusiasm. Courage is the ladder on which all the other virtues mount.

        Comment


          #5
          Re: China Has a New Growth Challenger -- Pakistan - (Bloomberg)

          so now pakistan has become the 2ed fastest growing country in the world :biggthumb

          Comment


            #6
            Re: China Has a New Growth Challenger -- Pakistan - (Bloomberg)

            the Pakistani economy is too tiny and insignificant to elicit any sort of interest from the rest of the world.

            similarly, the GDP of Laos could grow 250% and nobody would care.
            Last edited by nikhil25; Jun 7, 2005, 10:20 AM.

            Comment


              #7
              Re: China Has a New Growth Challenger -- Pakistan - (Bloomberg)

              indian baba,

              firstly stop getting jeolous and secondly Laos growth rate is 6% not 250%, shows lack of indian education and your right nobody cares about india, pakistan has drowned your economy.

              Comment


                #8
                Re: China Has a New Growth Challenger -- Pakistan - (Bloomberg)

                nikhils right. Just cause we have a strong growth rate, does'nt mean we'r able to compete with regional giants like China and India. We still have a long way to go.
                "The Baptism of God, and who can Baptize better than God?" (2:138)

                Comment


                  #9
                  Re: China Has a New Growth Challenger -- Pakistan - (Bloomberg)

                  Originally posted by suhaib
                  indian baba,

                  firstly stop getting jeolous and secondly Laos growth rate is 6% not 250%, shows lack of indian education
                  firstly, stop creaming your pants and calm down. there is no jealousy here....if you haven't noticed, the Indian economy, amongst other things, is the talk of the business world and is on its way to being a powerhouse. maybe you weren't aware of it, but i guarantee you that all Indians are....so rest assured, no Indian on earth is jealous of pakistan's economy. no need to change the subject.

                  you should also look up the definition of the word "hypothetical"

                  i am saying that going crazy over [dubious] growth rates for a globally irrelevant economy makes no sense. comparisons with China and India? like your outstanding Google efforts have shown, Laos has a much higher economic growth rate than Japan and the US. do you think Laotians are orgasming over this meaningless statistic?

                  your right nobody cares about india, pakistan has drowned your economy.
                  lol...

                  Comment


                    #10
                    Re: China Has a New Growth Challenger -- Pakistan - (Bloomberg)

                    Originally posted by lussi
                    burn, indians, burn
                    :bhangra:
                    Tu bhi villain ban sakta tha, "BILLA" ban sakta tha.....

                    Comment


                      #11
                      Re: China Has a New Growth Challenger -- Pakistan - (Bloomberg)

                      Originally posted by suhaib
                      indian baba,

                      pakistan has drowned your economy.
                      having said that, now you wanna take over our companies.
                      Tu bhi villain ban sakta tha, "BILLA" ban sakta tha.....

                      Comment


                        #12
                        Re: China Has a New Growth Challenger -- Pakistan - (Bloomberg)

                        Originally posted by nikhil25
                        firstly, stop creaming your pants and calm down. there is no jealousy here....if you haven't noticed, the Indian economy, amongst other things, is the talk of the business world and is on its way to being a powerhouse. maybe you weren't aware of it, but i guarantee you that all Indians are....so rest assured, no Indian on earth is jealous of pakistan's economy. no need to change the subject.

                        you should also look up the definition of the word "hypothetical"
                        there you go, i have proved how jeolous you are,

                        maybe you have been sleeping latly, but india being a powerhouse is old news and all the american companies that moved in there have now moved out into bangladesh and pakistan due to fruads which use to happen daily in there companies by your guys, and there is no more talk on it bacha. If you have been reading business magazines latly you would have seen pakistan has become the new talk of the town, it has been latly in all international business magazines, india has not come in any for a lonf time now, the superpower joke has come to an end.


                        i am saying that going crazy over [dubious] growth rates for a globally irrelevant economy makes no sense. comparisons with China and India? like your outstanding Google efforts have shown, Laos has a much higher economic growth rate than Japan and the US. do you think Laotians are orgasming over this meaningless statistic?


                        so now that i proved you wrong on laos growth rate you gona come up with more excuses. lol


                        beta stop getting jeolous and go back to some indian forum and discuss you indian superpower dreams there, and stop providing us with laughts, this is the business and economy forum not the humor section.

                        pakistan has become the second fastest growing country in the world and has knocked india off the no.2 spot so i do understand how you indians will be feeling .

                        Comment


                          #13
                          Re: China Has a New Growth Challenger -- Pakistan - (Bloomberg)

                          suhaib are u on crack. what are u trying to prove.
                          Nikhil you are no better. rather than trying to prove your pakistani brother wrong encourage and congratulate him for his country is taking baby steps towards progress after almost a decade. A stable strong Pakistan = a stable india.

                          Both of you grow up.
                          hamein to apno ne loota gheron mein kahan dam tha....mera scooter wajja wahaan jahaaN rashh kamm tha......

                          Comment


                            #14
                            Re: China Has a New Growth Challenger -- Pakistan - (Bloomberg)

                            Pak economy is going in circles. No solid foundation.

                            Foriegn currency reserved - post 9-11
                            Lots of money in banks to lend out
                            Increase expenditure of middle class - car, house and good on lease - middle class living starndard raises but consumption is based on borrowed money from banks (Rs. 77 B approx for last year)
                            No new manufacturing plants are installed in terms of forien investments - only services like telecom etc are benefitted and they investers taking profit out of the country. Fewer jobs created, no R&D in technology or manufacturing.
                            Taxes raised for salaried people - No taxes on feudles and elite class.
                            Fake hype in property and KSE ate Billions of Rs. of middle and poor class and a certain class and some generals filled their pockets.
                            Selling country's assets to foriegn companies is also risking our economic security.
                            I think we didn't properly use the forex that came after 2001.
                            charah saazon se alag hai mayar mera kay main
                            zakham khaaonga tou kuch aur nikhar jaaonga

                            Comment


                              #15
                              Re: China Has a New Growth Challenger -- Pakistan - (Bloomberg)

                              Originally posted by suhaib
                              there you go, i have proved how jeolous you are,

                              maybe you have been sleeping latly, but india being a powerhouse is old news and all the american companies that moved in there have now moved out into bangladesh and pakistan due to fruads which use to happen daily in there companies by your guys, and there is no more talk on it bacha. If you have been reading business magazines latly you would have seen pakistan has become the new talk of the town,
                              yes, i must have been sleeping and continue to sleep....because i have yet to see any mention of Pak in BusinessWeek, Economist, etc....whereas India or India-related issues will have 2-3 articles per issue without fail.
                              it has been latly in all international business magazines, india has not come in any for a lonf time now, the superpower joke has come to an end.
                              lol....care to name these "international business magazines"?

                              so now that i proved you wrong on laos growth rate you gona come up with more excuses. lol
                              like i said, you should learn what the words "hypothetical" and "could" mean. i'm unable to determine whether you are joking or are really this dumb.

                              beta stop getting jeolous and go back to some indian forum and discuss you indian superpower dreams there, and stop providing us with laughts, this is the business and economy forum not the humor section.
                              this thread is about the Pakistani economy, not the Indian economy.

                              pakistan has become the second fastest growing country in the world and has knocked india off the no.2 spot so i do understand how you indians will be feeling .
                              why do you insist on making comparisons to India when it is in an entirely separate league? your comparisons should be directed towards similar countries to Pakistan, such as Bangladesh.

                              Comment

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