State of the Pakistan Economy, Quarter One Based Estimates of Flood Damage for Annual Growth in Pakistan
October 27, 2022
The Lahore School’s projection of GDP growth is comparable to the IMF’s estimate for Pakistan, made in October 2022, of GDP growth of 2 percent for FY2023.
Their model also uniquely estimates a supply shock, positive or negative. Which then feeds into a demand shock. To give a final change in GDP for FY2022.
The estimation begins with the supply shock, by assuming an impact of the floods as observed over Q1, July to September 2022. Then, a further caveat is added, that this estimation of the supply shock delivered by the floods, is based only on income loss.
With these caveats, the total impact of the floods on agriculture and non-agriculture is estimated, in Q1 of FY2023, at $11.7 billion.
GOP faces an enormous output gap minimally estimated here $12 billion. Its forex reserves have dwindled to $7 billion.With the extension of the IMF’s EFF covering virtually all of FY 2023, its fiscal stance is extremely limited by the terms of the agreement with the IMF.
That does leave it to the monetary policy to generate growth and support welfare. Monetary policy is primarily occupied with controlling inflation raging at 23% per annum. Largely using the interest rate peaking at 15% per annum.
However, the Lahore School has argued in their last report on the State of the Economy FY 2022, that at least a quarter ofthis inflation rate is being contributed to by the massive depreciation of the exchange.
Further, research at the Lahore School shows that depreciation of the exchange rate sets in place depreciationary expectations, leading to increased capital outflows. Which of course Pakistan’s weak Current and Capital Accounts can illafford. Nor can a weak investment rate of 16% of GDP.
Related: Think-tank Lahore School of Economics cuts GDP forecast on catastrophic floodLabels: Floods, Lahore School, Pakistan, Pakistan Economy, Research
posted by S A J Shirazi @ 10/27/2022 09:20:00 AM,
$12b flood losses in agriculture sector: report
Shahram Haq
Pakistan’s economy, which was devastated by impact of the catastrophic floods that hit the country this summer, has managed to avert defaulting by a sliver says the federal government.
The World Bank recently stated that, “Pakistan is still facing the aftermaths of this flood and has suffered a loss of $32 billion in the shape of flood damages.”
Apart from the damage estimates coming in from international lending agencies, local business school think tanks have also shared their own estimates, focusing primarily on agricultural loss.
In a report released by the Innovation and Technology Center of the Lahore School of Economics (LSE), they estimated that the GDP growth of Pakistan over the fiscal year 2022-23 will be 2.38%.
According to the report flood damage to lives, livelihoods and incomes took a devastating toll on the economy over the first quarter (Q1) of the fiscal year, from July to September 2022.
“The projection of GDP growth is comparable to the estimates made by the International Monetary Fund (IMF) in October 2022 which estimated GDP growth of 2% for FY2023. Their model also uniquely estimates a supply shock, positive or negative, which then feeds into a demand shock,” reads the report.
With two caveats, basing the estimations on Q1FY23 and only on income loss, the total impact of the floods on agriculture and non-agriculture estimated by the report is $11.7 billion. The report added that the government faces an enormous output gap minimally estimated here at $12 billion.
Elaborating on the agriculture losses, the report said that a major impact of the floods has been on the Kharif crop.
Cotton, the report stated, has a two-thirds share in Punjab and a third-share in Sindh.
It illustrated that an output loss of 45% of the total cotton crop of 7 million tonnes translated into 3.1 million tonnes lost.
Explaining its method of calculations, the report showed that the share of cotton in the total GDP is 0.6%.
The total GDP of the economy, as given by the IMF for 2021, is $347 billion, which gives the share of the cotton crop in it $2.08 billion. So, the estimated loss in output of 45% of the total value of cotton of $2.08 billion then gives a nominal loss of $0.9 billion.
Similarly, rice has a 55% share in Punjab, a 35% share in Sindh and Balochistan combined, and a 10% share in KP.
The report suggested that an output loss of 31% of the total rice crop of 8.4 million tonnes translates into 2.6 million tonnes lost, taking the estimated loss in the rice crop to $0.75 billion. Sugarcane again has a twothirds share in Punjab, a quarter in Sindh, 8% in KhyberPakhtunkhwa (KP), and under 1% in Balochistan.
An output loss of 7% of the total sugarcane crop of 81 million tonnes translates into a 5.7 million tonne loss, valued at $0.017 billion.
And finally, the reports estimated 0.7 million heads of livestock being lost to the floods, with the loss valued at $0.2 billion.
The report mentioned a loss in minor crops valued at $3.04 billion, giving an aggregate value of loss in agriculture of approximately $5 billion.
The report goes on to predict that the loss in output in agriculture will be equal to the loss in value added in the processing of that output. So, if there has been a 45% loss in output in the cotton crop, this implies that cotton ginning will also have 45% less cotton to add value to, estimating that the reduced cotton output will affect cotton ginning by $0.65 billion.
This will go on to then impact textiles as well, says the report, predicting the loss in textiles to be the highest at $6.2 billion.
Labels: Floods, Lahore School, Pakistan, Pakistan Economy, Research
posted by S A J Shirazi @ 10/27/2022 08:30:00 AM,
Innovation and Productivity for Export-Led Growth in Pakistan
October 13, 2022
Labels: Dr. Azam Chaudhry, Guest Speaker, State Bank of Pakistan
posted by S A J Shirazi @ 10/13/2022 01:21:00 PM,
Advanced Corporate Finance
October 12, 2022
Mr. Umer Khan, Head of Investment Banking at Bank of Punjab visited the Lahore School of Economics on Wednesday, October 12, 2022, to give a talk to MBA II students who are enrolled in the course “Advanced Corporate Finance”.
Labels: Guest Speaker
posted by S A J Shirazi @ 10/12/2022 12:41:00 PM,
Sales Force Management
Mr. Khurram Javaid, Chief Commercial Officer at Fauji Foods (Ltd.) visited the Lahore School of Economics on Wednesday, October 12, 2022, to give a talk to MBA II students enrolled in the course “Sales Force Management”.
posted by S A J Shirazi @ 10/12/2022 12:30:00 PM,
Advanced Corporate Finance
October 11, 2022
Mr. Asim Jilani, SVP/ General Manager Special Assets Management Group at Faysal Bank visited the Lahore School of Economics on Monday, October 10, 2022, to give a talk to MBA II students who are enrolled in the course “Advanced Corporate Finance”.
Labels: Guest Speaker
posted by S A J Shirazi @ 10/11/2022 12:26:00 PM,
Strategic Management
October 08, 2022
Mr. Murshed Alam Qureshi, Director of Business Development & Sourcing at MAQ Supplies visited the Lahore School of Economics on Friday, October 07, 2022, to give a talk to BBA IV students who are enrolled in the course “Strategic Management”.
Labels: Guest Speaker
posted by S A J Shirazi @ 10/08/2022 11:03:00 AM,
Marketing Research
Maryam Wazirzada, Managing Partner at Iris Communications giving a talk to the students of MBA II who are enrolled in the course “Marketing Research” on Friday, October 07, 2022.
Labels: Guest Speaker
posted by S A J Shirazi @ 10/08/2022 10:58:00 AM,
Strategic Management
October 05, 2022
Mr. Saad Khan, CEO of Active Media visited the Lahore School of Economics on Tuesday, October 04, 2022, to give a talk to BBA IV students who are enrolled in the course “Strategic Management”.
Labels: Guest Speaker
posted by S A J Shirazi @ 10/05/2022 03:52:00 PM,
Advanced Corporate Finance
Mr. Asim Jilani, SVP/ General Manager of Special Assets Management Group at Faysal Bank visited The Lahore School of Economics on Tuesday, October 04, 2022, to give a talk to MBA II students who are enrolled in the course “Advanced Corporate Finance”.
Labels: Guest Speaker
posted by S A J Shirazi @ 10/05/2022 03:47:00 PM,
Advanced Operations Management
October 03, 2022
Mr. Umar Iqbal, Group Technical Director at Nimir Chemicals Group Pakistan visited the Lahore School of Economics on Monday, October 03, 2022, to give a talk to MBA II students who are enrolled in the course of “Advanced Operations Management”.
Labels: Guest Speaker
posted by S A J Shirazi @ 10/03/2022 03:09:00 PM,
Sales Force Management
October 01, 2022
Mr. Umer Ghumman, Head of Mobile Phones at Samsung Pakistan visited the Lahore School of Economics on Friday, September 30, 2022, to give a talk to MBA II students who are enrolled in the course “Sales Force Management”.
Labels: Guest Speaker
posted by S A J Shirazi @ 10/01/2022 03:03:00 PM,
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