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Thirdly previous government increases electricity production
As new largely coal-fired plants come online, Pakistan is expected by 2023 to have 50pc more power capacity than currently needed.

Because the government must repay loans taken to build the plants and has signed contracts to buy their power, the overcapacity is producing costs “the government has to pay to the power producers under binding contracts, regardless of actual need”, Mr Gauhar said.

“Our fixed-capacity charges have gone through the roof,” he added. Those costs currently stand at Rs850 billion a year, but will rise to almost Rs1.45 trillion a year by 2023 as new largely coal-fired power plants still being built come online, he said.

That is driving up rates consumers pay for power — 30pc in the last two years, Mr Gauhar said — a problem likely to continue unless Pakistan can find more buyers for its new generating capacity, such as by boosting manufacturing or pushing use of electric vehicles.

 

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^^
I said previous govts. not previous govt. which includes all the govts. before current govt. but in your post you are only defending PMLN.

Secondly, I am unaware of what they did with remittances? This is what my question is which you have not answered yet
Boss what can a govt do yo increase remmittance?You believe RDB to be game changer ? Its primarily due to corona and illegal channels are closed due to ban on travel. Legal channels and western union type channels have shown even more growth. For sure you will acknowledge this.

Secondly due to corona many people out of jobs and heading back home.

These are external factors and yes great job with RDB its an achievement at state bank level , to authorize this i am more concerned with our public development spending.
 

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There are some news that exportesers are returing their cash via friends and family and declare them as remittance to save tax.
Because textile export is going good in last year that is creating artificial boost to remittance as well.
 

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The total liquid foreign reserves held by Pakistan stood at $23,520.2 million as of April 23, 2021. The break-up of the foreign reserves position is as under:
  • Foreign reserves held by the State Bank of Pakistan (SBP): $16,427.8 million
  • Net foreign reserves held by commercial banks: $7,092.4 million
  • Total liquid foreign reserves: $23,520.2 million
During the week ended April 23, 2021, the reserves held by the central bank increased by $384 million to $16,427.8 million.
The net reserves held by banks other than the SBP fell from $7,168.9 million to $7,092.4 million.
The total liquid reserves, however, showed positive change upwards from $23,212.8 million to $23,520.2 million at the end of the week in concern.
 

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The economic policies of the government has started yielding results and Pakistan on Friday estimated provisional GDP growth for the fiscal year 2020-21 at 3.94per cent.

The estimated GDP growth is almost double what was forecasted by the global lenders.

“The provisional growth of GDP for the year 2020-21 has been estimated at 3.94per cent which is based upon growth estimates of the agricultural, industrial, and services sectors,” the ministry said in a statement.

The International Monetary Fund (IMF) had estimated GDP at 1.5per cent, and World Bank at 1.3per cent as the COVID-19 pandemic forced the government to impose curbs on businesses in order to slow the spread of the infection.

The provisional progress of the Gross Domestic Product for the year 2020-21 has been estimated at 3.94 %, based on the growth estimates of the agricultural, industrial, and services sectors at 2.77 p.c, 3.57 p.c, and 4.43 p.c, respectively.
 

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Pakistan's growth is expected to stabilize at almost 4% in the coming fiscal year, with the current account deficit narrowing to 0.5 percent of GDP in FY21 from 1.7 percent in FY20, according to Fitch Ratings.

Domestic consumption, continued manufacturing, and improved construction activity are expected to keep the economy stable, as per a Fitch statement.

This comes after Fitch predicted a negative 0.5 percent growth rate for the current fiscal year.
 

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Pakistan’s Economic Growth

The State Bank of Pakistan (SBP) initially predicted a 3% growth in GDP, while the International Monetary Fund (IMF) and World Bank predicted 1.5% and 1.3% increases, respectively. The country’s per capita income will rise 14.6% from $1,405 in 2020 to $1,610 in 2021.

The services sector, which is forecasted to grow by 4.43% in 2020-2021, is responsible for the majority of the growth. This is certainly remarkable for a country like Pakistan which is becoming successful in expanding its services sector. The agricultural sector’s predicted growth is 2.77%, while that of the industrial sector is 3.57%.

Last year, the country saw a surge in cases during the Eid-festival, but the government was quick to move this time, imposing partial lockdowns, closing non-essential enterprises, and prohibiting domestic tourism, which helped the country avoid a spike in cases. However, the restrictions imposed have jeopardized the labor class’s livelihoods.

Vaccination Plan

The government hopes to have vaccinated 70% of the population by the end of 2021. 5.3 million citizens have been vaccinated so far. With the help of CanSino Bio, a Chinese company, Pakistan has developed its own “PakVac“ vaccine, bolstering the country’s vaccination program.

Stock Market Sentiment

Last week Pakistan reported the highest traded volumes on the Pakistan Stock Exchange at 1.56 billion shares and 2.21 billion shares respectively on May 26 and May 27. Investors are optimistic because of the populist budget proposal and improved growth forecasts.

Economic Growth

According to SBP’s Governor, Reza Baqir, the unexpected growth in GDP is due to accommodative monetary and fiscal policy. SBP quickly reduced its policy rate by 625 basis points to 7% and released a stimulus amounting to 5% of GDP. In addition, the governor said that the government was able to control the coronavirus situation reporting 12 new cases per million, compared to 62 new cases per million reported globally.

Public Debt to GDP

The IMF’s world economic outlook numbers Pakistan’s public debt to GDP remained broadly unchanged in 2020 over the previous year, as reported in Bloomberg. This statistic for most emerging countries increased by 10% during the coronavirus pandemic. Reza Baqir explained that this was caused by a ”prudent fiscal and aggressive monetary policy.”

Inflation

Pakistan recently reported a CPI of 11%, up from 6% a few months ago. The country expects inflation to range between 7% and 9%, with experts predicting that it will be closer to the higher end. According to Reza Baqir, recent high inflation was caused by a small number of products such as energy and food. Because of supply-side factors, he described these factors as “one-time,” but officials are prepared to respond quickly to demand-side pressures if they arise.

IMF Program

The International Monetary Fund (IMF) has granted the country a $6 billion Extended Fund Facility (EFF). According to Reza Baqir, who worked at the IMF for nearly 18 years, Pakistan is transitioning from stabilization to growth. He stated that the government was successful in converting a $19 billion current account deficit into a $900 million surplus, as well as more than doubling the country’s foreign reserves from $7.2 billion to $16 billion. These objectives were met not through borrowing, but through “high-quality measures.”

The Bottom Line

The successful management of the coronavirus pandemic and the success of the IMF program, as evidenced by the growth in GDP to 4%, demonstrate Pakistan’s ability to grow and serve as a good investment opportunity.
 

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There are some news that exportesers are returing their cash via friends and family and declare them as remittance to save tax.
Because textile export is going good in last year that is creating artificial boost to remittance as well.
My friend works at a bank, he said because of new FATF regulations, govt is asking banks to crack down hard on exporters. Now based on the L/C opened etc, the exporters have to show that they received money for the exported goods, so they can't just have friends send money as remittance.
 

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