the future of developing economies - icap cfo conference
TRANSCRIPT
The Future of Developing Economies:Experience of Pakistan, and challenges for developing
economies
CFO Conference 2021
May 24, 2021
1
Overview
• Characteristic macroeconomic features of developing economies
• Pakistan’s economy before Covid-19
• Impact of Covid-19 on Pakistan’s economy
• Government’s and central bank’s response to Covid-19
• Road to recovery
• Outlook
• Challenges to developing economies
2
Rising debt levels, constrained fiscal space, and a high share of informal economy, make EMDEs more vulnerable to economic shocks
3
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
Pakistan EMDEs Advanced Economies
Fiscal Balance (% of GDP)
Source: World Bank
0
20
40
60
80
100
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
Pakistan EMDEs Advanced Economies
General Government Gross Debt (% of GDP)
Source: World Bank
0
5
10
15
20
25
30
35
19
95
19
96
19
97
19
98
19
99
20
00
20
01
Pakistan EMDEs Advanced Economies
Informal Economy (% of GDP)
Source: Medina, Leandro and Schneider, Friedrich G., Shedding Light on the Shadow Economy: A Global Database and the Interaction with the Official One (2019). CESifo Working Paper No. 7981
0
10,000
20,000
30,000
40,000
50,000
60,000
19
91
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
20
09
20
11
20
13
20
15
20
17
20
19
EMDEs
Pakistan
Advanced Eco.
Source: World Bank
GDP per capita (current US$)
This is particularly worrying, given their vulnerability to sudden stops (BOP crisis), lower credit penetration, weak human capital development, and high digital divide
4
0
20
40
60
80
100
Pakistan EMDEs Advanced Economies
Internet Inclusiveness Scores (2019)
Source: Economist Intelligence Unit Internet Inclusivity Index 2019
-100
-50
0
50
100
150
Jan
-07
Jan
-08
Jan
-09
Jan
-10
Jan
-11
Jan
-12
Jan
-13
Jan
-14
Jan
-15
Jan
-16
Jan
-17
Jan
-18
Jan
-19
Jan
-20
Jan
-21
bil
lio
n U
S D
oll
ar
Monthly Flows in Portfolio Accounts in Emerging Economies
Source: Koepke Paetzold ( 2020), Capital Flow Data – A Guide for Empirical Analysis and Real-time Tracking , IMF Working Paper
Covid-19Taper TantrumGFC Crisis
0
50
100
150
200
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
Pakistan EMDEs Advanced Economies
Credit to Private Sector ( % of GDP)
Source: World Bank
0.000.100.200.300.400.500.600.700.800.901.00
2011 2012 2013 2014 2015 2016 2017 2018 2019
Pakistan Advanced Economies EMDEs
Human Development Score
Source: UNDP
Decisive policy actions before COVID-19 outbreak led to a significant strengthening of external and fiscal fundamentals
5
Prudent monetary, fiscal and regulatory measures had positioned the macroeconomy on a favorable trajectory before Covid-19
Fiscal Measures
• Reversal of multiple tax concessions given last year
• Elimination of concessionary tax regime on textiles, sugar, cigarettes, etc.
• Restraint on expenditures and focus on documentation
Monetary Measures
• Prudent monetary policy (rate unchanged after increasing by 100 bps in July) to keep inflation in check
• Elimination of central bank financing of the budget deficit
• Enhanced communication
External Sector Measures
•Transition to a market-based exchange rate system
• Regulatory efforts to curb non-essential imports
• Inflow of workers’ remittances through formal channels
6
Source: SBP
The move to a market-based exchange rate led to a significant shrinking of the current account deficit; better fundamentals facilitated capital inflows…
Current Account Balance (CAB), Real Effective Exchange Rate (REER) and Foreign InvestmentCAB and foreign investment in US$ billion, REER Index base = 2010, inverted scale
0.2-0.3
0.8
0.4
116.0
95.990
95
100
105
110
115
120
125-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
Mar-
15
Jul-
15
Nov-1
5
Mar-
16
Jul-
16
Nov-1
6
Mar-
17
Jul-
17
Nov-1
7
Mar-
18
Jul-
18
Nov-1
8
Mar-
19
Jul-
19
Nov-1
9
Mar-
20
Index (
base
2010)
US$ b
illion
CAB (left axis)
Non-oil CAB (left axis)
REER (right axis)
3-month rolling averages
1.1
1.9
(0.4)
2.1
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
FY19 FY20
US
$ b
illi
on
Net direct investment
Net portfolio investment
Jul-Feb
7
… allowing a significant rebuilding of foreign exchange reserve buffers
Source: SBP
SBP’s Net FX Reserves Buffers and Forward LiabilitiesUS$ billion
-9.0
-6.0
-3.0
0.0
3.0
6.0
9.0
12.0
15.0
-9.0
-6.0
-3.0
0.0
3.0
6.0
9.0
12.0
15.0
Jul-
17
Au
g-1
7
Sep
-17
Oct
-17
No
v-1
7
Dec
-17
Jan
-18
Feb
-18
Mar
-18
Ap
r-1
8
May
-18
Jun
-18
Jul-
18
Au
g-1
8
Sep
-18
Oct
-18
No
v-1
8
Dec
-18
Jan
-19
Feb
-19
Mar
-19
Ap
r-1
9
May
-19
Jun
-19
Jul-
19
Au
g-1
9
Sep
-19
Oct
-19
No
v-1
9
Dec
-19
Jan
-20
Feb
-20
SBP FX Reserves Forward Liabilities Net Reserves Buffers
8
Source: MoF
Strong tax revenues narrowed the fiscal deficit significantly in Jul-Mar FY20, with the primary balance in surplus for the first time since 2016
Primary Fiscal Balance during Jul-Mar% of GDP
9
Impact of COVID-19 on Pakistan’s economy
10
• Mobility restrictions became unavoidable to stop the spread of virus
• Industrial & manufacturing activity heavily impacted during lockdowns
• Real GDP growth in FY20 slipped into negative territory for the first time in 68 years
Encouragingly, earlier stabilization measures provided room for swift, aggressive and coordinated policy response
PRI incentives to formalize remittances
Prudent monetary
policy
Rationalization of expenditures
Zero borrowing from the
central bank
Market-based exchange rate
system
11
Government and central bank gave a timely and calibrated economic response without compromising buffers
With falling domestic demand and inflation, State Bank of Pakistan (SBP) prudently loosened its monetary stance policy stance
Source: tradingeconomics.com; cbrates.com ; Updated on May 21, 2021
Changes in Policy Rates of Major EM Central BanksBasis point reduction in policy interest rates since 1st February 2020
12
625
-100
0
100
200
300
400
500
600
700
Mo
zam
biq
ue
Geo
rgia
Tai
wan
Ch
ina
Hu
nga
ry
Alb
ania
Th
aila
nd
Sou
th K
ore
a
Mo
rocc
o
Mal
aysi
a
Tu
nis
ia
Bra
zil
Ho
ng
Ko
ng
Ind
ia
Serb
ia
Ru
ssia
Ken
ya
Sau
di A
rab
ia
Ch
ile
Jord
an
Ro
man
ia
Po
lan
d
Ind
on
esia
Gh
ana
Sri
Lan
ka
Ph
ilip
pin
es
Nig
eria
Vie
tnam
Per
u
Sou
th A
fric
a
Mex
ico
Uk
rain
e
Egy
pt
Mo
ngo
lia
Pak
ista
n
Ba
sis
Po
ints
Central bank’s policy support remained proactive during the COVID pandemic
Note: Each vertical bar represents a new SBP support measure or adjustment in a previously introduced measure. RFCC = Refinance Facility for Combating COVID – 19; TERF =Temporary Economic Refinancing Facility; H&SMEs = Housing & Small & Medium Enterprises; EFS = Export Finance Scheme; and LTFF = Long-term Finance FacilitySource: www.ourworldindata.org, SBP
Daily COVID-19 Cases & Timeline of SBP’s Economic Policy Support Measures7-days rolling average, updated as on 18th May, 2021
Pyramid in the background shows daily number of COVID cases
13
Introduced TERF, RFCC
Policy rate cut, 75 bps
Relaxation under EFS, LTFF
Relief for medical imports
Policy rate cut, 150 bps
Regulatory relief for Hous.&SMEs, Micro, Agri &
Consumer Financing, Branchless Banking
Loan deferment/ restructuring under
Refinancing schemes
Relief under RFCC
Introduced Rozgar scheme
Regul. relief for remittances
Policy rate cut, 200 bps
Relief under Rozgar scheme
Regul. relief under Islamic Banking
schemes
Relief under RFCC
Risk sharing w/ Gov in Rozgar scheme
Relief under TERF
Relief under Rozgar scheme
Policy rate cut, 100 bps
Relief under Rozgar scheme
Relief for Corporate Financing Policy rate cut 100 bps
Extension under EFS, LTFF limits
Relief under Rozgar scheme
Relief under RFCC
Relief Hous.&SMEs, Micro, Agri & Consumer Financing
Relief under LTFF, TERF
Relief for Housing, Consumer Financing
Relief Branchless Banking
Support for exporter
Relief under Rozgar scheme
Relief for Micro Financing
Support for exporter/importer
Support for importers
Relief under RFCC
Regul. relief for Housing Finance
Extension in relief measures related to COVID-19
Regulatory reliefs for Housing Finance
Support for E-Commerece Exportes
AML/CFT/CPF Regulations
Raast (Instant Payment System)
Forward Guidance
Modernizes Foreign Exchange
Regulations
Markup Subsidy for Housing Finance
Asset Securitization through SPV
Enhancing digitization initiatives
Cash Margin Restriction on Import of Items
End-To-End Digitalization of F.E related Cases
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
22
-Feb
-20
8-M
ar-2
0
23
-Mar
-20
7-A
pr-
20
22
-Ap
r-2
0
7-M
ay-2
0
22
-May
-20
6-J
un
-20
21
-Ju
n-2
0
6-J
ul-
20
21
-Ju
l-2
0
5-A
ug-
20
20
-Au
g-2
0
4-S
ep-2
0
19
-Sep
-20
4-O
ct-2
0
19
-Oct
-20
3-N
ov
-20
18
-No
v-2
0
3-D
ec-2
0
18
-Dec
-20
2-J
an-2
1
17
-Jan
-21
1-F
eb-2
1
16
-Feb
-21
3-M
ar-2
1
18
-Mar
-21
2-A
pr-
21
17
-Ap
r-2
1
2-M
ay-2
1
17
-May
-21
Government’s Fiscal Package Calibrated Towards Most Vulnerable, and included the landmark Ehsaas Cash Program
Allocation, Rs billion
14
Total Support during COVID 19 was broadly commensurate with other EMs
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Sri L
ank
an
Uzb
ekis
tan
Nig
eria
Mal
div
es
Arg
enti
na
Aze
rbai
jan
Ban
gald
esh
Mex
ico
Nep
al
No
rway
Pak
ista
n
Sou
th A
fric
a
Tu
rkey
Ph
ilip
pin
e
Cam
bo
dia
Egy
pt
Irel
and
Ru
ssia
Vie
tnam
Ind
on
esia
Iran
Ind
ia
Kaz
akh
stan
Sou
th K
ore
a
Bh
uta
n
Ch
ina
Th
aila
nd
Geo
rgia
Support During COVID - 19 in Emerging Economies% of GDP (2019)
Government Central Bank
Source: Asian Development Bank; IMF Report and SBP calculations
15
Pakistan is one of the only countries that undertook fiscal consolidation in 2020,
despite Covid; and as a result, recorded one of the smallest increases in public debt
-12
-10
-8
-6
-4
-2
0
2
Mo
ngo
lia
Gh
ana
Serb
ia
Geo
rgia
Hu
nga
ry
Tu
nis
ia
Mo
zam
biq
ue
Ch
ina
Ch
ile
Jam
aica
Th
aila
nd
Mo
rocc
o
Ph
ilip
pin
es
Sri
Lan
ka
Iran
Sen
egal
Mex
ico
My
anm
ar
Ken
ya
Egy
pt
Tu
rkey
Pak
ista
n
per
cen
t o
f G
DP
Comparable EMs: Change in Primary Balance from 2019 to 2020
Source: World Economic Outlook Database, April 202116
0
4
8
12
16
20
Pak
ista
n
Ban
glad
esh
Lo
w-I
nco
me
Dev
elo
pin
g
Lo
w a
nd
Lo
wer
-Mid
dle
In
com
e
Lo
wer
-Mid
dle
In
com
e
EM
DE
s
Av
erag
e (G
RA
& P
RG
T)
Av
erag
e (G
RA
& P
RG
T E
xcl.
Pak
ista
n) A
ver
age*
Ind
ia
Ad
van
ced
USA
Gross Debt: change in 2020 over 2019 (percent of GDP)
Source: IMF; World Economic Outlook Database, April 2021; The World Bank; * excluding Venezuela
The profile of Pakistan’s external debt also compares well to other countries
Turkey
South Africa
Argentina
BrazilChile
Ecuador
Mexico
Panama
Peru
Israel
Jordan
Egypt
Afghanistan
Cambodia
Sri Lanka
India
Indonesia
Malaysia
Pakistan
Philippines
Thailand
Algeria
Ethiopia
Tunisia
Kazakhstan
China
Mongolia
0
10
20
30
40
50
60
0 50 100 150 200 250
Gross External Debt as Percent of GDP and Short-term Debt as Percent of External Debt
Source: Haver Analytics, World Bank; latest estimates
Rising External Debt (External Debt as percent of GDP)
Ris
ing
Vu
lner
abil
ity
of
Ext
ern
al D
ebt
Pro
file
(S
ho
rt-t
erm
deb
t as
per
cen
t o
f ex
tern
al d
ebt)
17
Due in part to targeted support measures, the economy is beginning to recover from the Covid shock…
-100.0-80.0-60.0-40.0-20.0
0.020.040.060.080.0
100.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3
FY20 FY21
Jeeps & Car Sales
#FMCG Sales are based on the financials of 15 listed companies; *Figures are for Jul-Feb.Sources: SBP, APCMA, PAMA, OCAC, NEPRA & Corporate reports (various issues)
Growth in Demand Indicators
-6.0
0.0
6.0
12.0
18.0
24.0
30.0FMCG Sales#
-25.0
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0POL Sales
Power Generation
-6.0-4.0-2.00.02.04.06.08.0
10.012.014.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3
FY20 FY21
-28.0-24.0-20.0-16.0-12.0-8.0-4.00.04.08.0
12.016.0
Q1 Q2 Q3* Q4 Q1 Q2 Q3*
FY20 FY21
LSM index-20.0-15.0-10.0
-5.00.05.0
10.015.020.025.030.0
Local Cement Dispatches
percent, YoY
18
Business sentiment has increased
Diffusion Index (DI); DI > 50 implies positive views are higher than negative views)
50.8
56.4
62.0
55.557.660.0
62.4
57.8
30
40
50
60
70
Current Business
Confidence
Overall Business
Confidence
Expected Business
Confidence
Purchasing Manager
Index
Indices of Business Confidence
Dec-20 Feb-21
19Source: SBP
Headline inflation has risen since January, but is being driven by supply shocks to electricity tariffs and rising price of non-perishables
Heat Map of CPI Inflation (Y/Y).
wei
ght
Dec
-19
Jan
-20
Feb
-20
Mar
-20
Ap
r-2
0
May
-20
Jun
-20
Jul-
20
Au
g-2
0
Sep
-20
Oct
-20
No
v-2
0
Dec
-20
Jan
-21
Feb
-21
Mar
-21
Ap
r-2
1
CPI-National 12.6 14.6 12.4 10.2 8.5 8.2 8.6 9.3 8.2 9.0 8.9 8.3 8.0 5.7 8.7 9.1 11.1
Urban Basket
Urban CPI 100.0 12.0 13.4 11.2 9.3 7.7 7.3 7.6 7.8 7.1 7.7 7.3 7.0 7.0 5.0 8.6 8.7 11.0
NFNE (Core) 53.7 7.5 7.9 8.0 7.4 6.4 6.3 6.5 5.3 5.6 5.5 5.6 5.6 5.6 5.4 6.4 6.3 7.0
Food 36.8 16.7 19.5 15.2 13.0 10.4 10.6 12.9 15.1 11.3 12.4 13.9 13.0 12.6 7.3 10.3 11.5 15.7
Energy 9.5 20.6 22.8 15.3 6.6 4.6 0.5 -5.0 -3.5 0.8 2.1 -6.1 -7.2 -5.2 -4.5 14.1 11.8 14.9
Administered ** 18.6 20.6 15.5 7.9 5.8 2.2 -1.8 -0.5 4.1 5.0 -0.5 -1.6 -2.1 -0.9 12.6 11.8 13.4
Rural Basket
Rural CPI 100.0 13.6 16.3 14.2 11.7 9.8 9.7 10.0 11.6 9.9 11.1 11.3 10.5 9.5 6.6 8.8 9.5 11.3
NFNE (Core) 42.6 8.1 9.0 9.4 9.4 8.5 8.4 8.8 7.8 7.6 7.8 7.6 7.4 7.7 7.8 7.7 7.3 7.7
Food 45.9 19.7 23.8 19.7 15.5 12.9 13.7 15.2 17.8 13.5 15.8 17.7 16.1 13.4 7.2 9.1 11.1 14.1
Energy 11.4 11.3 15.9 11.4 5.4 3.2 -1.3 -5.3 1.4 3.6 5.0 -0.8 -1.6 0.6 0.1 12.3 11.1 13.8
Administered * 16.5 20.7 17.9 10.0 6.6 0.3 -2.2 6.5 12.4 14.6 11.5 9.9 4.8 6.0 15.3 17.9 17.3
SPI 18.1 18.3 14.5 11.8 9.3 11.0 11.5 13.7 11.7 12.0 9.3 9.9 7.9 6.4 10.1 14.3 17.8
WPI 12.4 15.4 12.7 9.3 4.9 1.5 0.9 3.2 3.3 4.3 5.1 5.0 5.7 6.4 9.5 14.6 16.6
wei
ght
Dec
-19
Jan
-20
Feb
-20
Mar
-20
Ap
r-2
0
May
-20
Jun
-20
Jul-
20
Au
g-2
0
Sep
-20
Oct
-20
No
v-2
0
Dec
-20
Jan
-21
Feb
-21
Mar
-21
Ap
r-2
1
* Includes Wheat, Sugar, Fuels, Electricity, Education, Communication, Postal and Railway charges (internally defined); KEY
7.0 8.0 9.020
And there is no sign of second-round effects, with real wage growth remaining close to zero and expectations well-anchored
-6
-4
-2
0
2
4
6
8
10
Oct-09
Apr-10
Oct-10
Apr-11
Oct-11
Apr-12
Oct-12
Apr-13
Oct-13
Apr-14
Oct-14
Apr-15
Oct-15
Apr-16
Oct-16
Apr-17
Oct-17
Apr-18
Oct-18
Apr-19
Oct-19
Apr-20
Oct-20
Apr-21
Co-movement wages/core non-perishables/core
Source: PBS
Fiscal consolidation remains on track with the budget, on the back of an improved primary surplus and healthy revenue growth
22
-0.7%-1.0%
0.7% 0.5%
-1.7%
-1.4%
0.0% 0.2%
-1.7% -1.1%
-0.2%
0.2%
2,000
1,500
1,000
500
0
500
1,000
FY20 FY21 FY20 FY21
Fiscal balance Primary balance
bil
lio
n R
s
Q1
Q2
Q3
Fiscal and Primary balances in FY20 and FY21
Data labels are in terms of percent of GDP
Source: MoF
1.0% 0.7%
3.6% 3.1%1.2% 1.1%
4.2% 3.9%
1.0% 0.7%
3.5%3.4%
0
1,000
2,000
3,000
4,000
5,000
6,000
FY20 FY21 FY20 FY21
Non-tax Tax Revenue
bil
lio
n R
s
Q1
Q2
Q3
Revenues in Jul-Mar
Data labels are in terms of percent of GDP
Source: MoF
The external position has remained robust, with FX reserves at 4-year highs and a near $1 billion current account surplus so far this FY…
0
2
4
6
8
10
12
14
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
Sep
-19
Oct
-19
No
v-1
9
Dec
-19
Jan
-20
Feb
-20
Mar
-20
Ap
r-2
0
May
-20
Jun
-20
Jul-
20
Au
g-2
0
Sep
-20
Oct
-20
No
v-2
0
Dec
-20
Jan
-21
Feb
-21
Mar
-21
Bil
lio
ns
USD
Bil
lio
ns
USD
Current Account Balance Fin. Account SBP Res-rhs
Figure 1: Current account balance, financial account and SBP reserves
Source: SBP
-0.6
-1.2
-1.7
-1.7
-2.1
-3.4
-4.0
-4.2
-4.1
0.6
0.8
0.9
1.3
1.9
1.2
1.0
1.0
1.0
5 4 3 2 1 0 1 2 3
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
USD Billions
FY20 FY21
Figure 2: Cumulative current account balance
Source: SBP
23
The Pakistan Rupee has performed better than many other EMs through Covid
Source: Source: Bloomberg; 21 May 2021
Movement of Currencies Against US Dollar since Feb-2020
24
1.4%
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
Tu
rkis
h L
ira
Nig
eria
n N
aira
Bra
zili
an R
eal
Geo
rgia
n L
ari
Ru
ssia
n R
ub
le
Uk
rain
ian
Hry
vn
ia
Per
uv
ian
So
l
Sri L
ank
an R
up
ee
Co
lom
bia
n P
eso
Jam
aica
n D
oll
ar
Ken
yan
Sh
illi
ng
Mex
ican
Pes
o
Gh
anai
an C
edi
Ind
on
esia
n R
up
iah
Mo
ngo
lian
Tu
ghri
k
Ind
ian
Ru
pee
Th
ai B
aht
Mal
aysi
an R
ingg
it
Sau
di R
iyal
Ho
ng
Ko
ng
Do
llar
Ban
gald
esh
Tak
a
Jord
ania
n D
inar
Egy
pti
an P
ou
nd
Vie
tnam
ese
Do
ng
Pak
ista
ni R
up
ee
Tu
nis
ian
Din
ar
Sou
th K
ore
an W
on
Hu
nga
rian
Fo
rin
t
Po
lan
d Z
łoty
Sou
th A
fric
an R
and
Ph
ilip
pin
e P
eso
Ro
man
ian
Leu
Ch
ines
e Y
uan
Tai
wan
Do
llar
Mo
zam
bic
an M
etic
al
Mo
rocc
an D
irh
am
Alb
ania
n L
ek
Serb
ian
Din
ar
Ch
ilea
n P
eso
Exports are beginning to recover, especially HVA textiles. Imports are mainly driven by one-off food items; transport; and machinery
25
1113 1082
1269
0
400
800
1200
1600
Jul-
18
Oct
-18
Jan
-19
Ap
r-1
9
Jul-
19
Oct
-19
Jan
-20
Ap
r-2
0
Jul-
20
Oct
-20
Jan
-21
Ap
r-2
1
Monthly Exports of TextilesUS$ Million
Source: PBS
0
20
40
60
80
100
120
140
HVA textiles LVA textiles Food Manuf. Total
Pre-Covid (Jan-Mar 20)
Covid period (Apr-Jul 20)
Post Covid Period (Aug-Apr FY21)
*Volumes data covers 83% of total exports Source: PBS
Export Volumes, Monthly AverageFY19=100
-16.2%
17.9%
-25%
-15%
-5%
5%
15%
25%
FY20 FY21
FY17 FY18 FY19 FY20 Jul-Apr
Food Machinery
Transport Oil
Others Total
W/O: One-Offs
Source: PBS
YoY Growth in Imports
5.0 5.0
6.65.9
6.9
FY17 FY18 FY19 FY20 FY21**: Jul-Apr FY21; Source: PBS
Share of Textile Machinery Imports in Total Machinery Imports (excluding mobiles) (%)
Remittances have stayed above $2 billion every month this FY…the diaspora is being further tapped through the Roshan Digital Account
1.72.0 2.1
1.8 1.9
2.8
2.12.4
2.7
-40%
-20%
0%
20%
40%
60%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Sep
-19
Oct
-19
No
v-1
9
Dec
-19
Jan
-20
Feb
-20
Mar
-20
Ap
r-2
0
May
-20
Jun
-20
Jul-
20
Au
g-2
0
Sep
-20
Oct
-20
No
v-2
0
Dec
-20
Jan
-21
Feb
-21
Mar
-21
Per
cen
t
Bil
lio
n U
SD
Remmitances
Growth (YoY) - rhs
Workers remittance inflows
Source: SBP
26
-20
0
20
40
Ind
ia
Isra
el
Jord
an
Bo
liv
ia
Ph
ilip
pin
es
Sen
egal
Mex
ico
Nic
arag
ua
Mau
riti
us
Egy
pt
Sri L
ank
a
Pak
ista
n
Mo
rocc
o
Ban
glad
esh
Post-Outbreak Remittance Growth in Major Recipientspercent change YoY
*Latest data (Jul-Mar for Pak, Jul-Feb for Bangladesh, Sri Lanka & Morocco, and Jul-Dec for all others) Source: Haver Analytics, SBP
9 42110
250
418
594
806
1055
0
200
400
600
800
1000
1200
Sep
-20
Oct
-20
No
v-2
0
Dec
-20
Jan
-21
Feb
-21
Mar
-21
Ap
r-2
1
Cumulative inflow of RDA deposits US$ Million
7 to 9
0.125
migrants abroad RDA accounts
Source: Bureau of emigration & overseas employment
Non-Resident Pakistanis(number in millions)
Challenges for Developing Economies
27
Uneven recovery in the wake of new Covid strains, new waves and global inequality in vaccinations
28
20
30
40
50
60
70
Jan
-19
Feb
-19
Mar
-19
Ap
r-1
9
May
-19
Jun
-19
Jul-
19
Au
g-1
9
Sep
-19
Oct
-19
No
v-1
9
Dec
-19
Jan
-20
Feb
-20
Mar
-20
Ap
r-2
0
May
-20
Jun
-20
Jul-
20
Au
g-2
0
Sep
-20
Oct
-20
No
v-2
0
Dec
-20
Jan
-21
Feb
-21
Mar
-21
Ap
r-2
1
China India Brazil Indonesia Egypt
Russia Turkey Vietnam Malaysia Pakistan
PMI>50 expansion; PMI<50 contraction
Manufacturing PMI-Emerging Economies
Source: Bloomberg
20
30
40
50
60
70
Jul-
19
Au
g-1
9
Sep
-19
Oct
-19
No
v-1
9
Dec
-19
Jan
-20
Feb
-20
Mar
-20
Ap
r-2
0
May
-20
Jun
-20
Jul-
20
Au
g-2
0
Sep
-20
Oct
-20
No
v-2
0
Dec
-20
Jan
-21
Feb
-21
Mar
-21
Ap
r-2
1
Australia Canada Euro Area JapanSingapore South Korea UK USA
PMI>50 expansion;PMI<50 contraction
Manufacturing PMI-Advanced Economies
Source: Bloomberg
Continued monetary and fiscal stimulus across the world may extend the rebound in global commodity prices
29
80.0
60.0
40.0
20.0
0.0
20.0
40.0
60.0
80.0
100.0
120.0Ju
l-1
8
Au
g-1
8
Sep
-18
Oct
-18
No
v-1
8
Dec
-18
Jan
-19
Feb
-19
Mar
-19
Ap
r-1
9
May
-19
Jun
-19
Jul-
19
Au
g-1
9
Sep
-19
Oct
-19
No
v-1
9
Dec
-19
Jan
-20
Feb
-20
Mar
-20
Ap
r-2
0
May
-20
Jun
-20
Jul-
20
Au
g-2
0
Sep
-20
Oct
-20
No
v-2
0
Dec
-20
Jan
-21
Feb
-21
Mar
-21
Ap
r-2
1
Yo
Y c
ha
ng
e i
n %
Trend in Commodity Prices (3MMA)Agriculture Energy Industrial Metals Composite
Source: Bloomberg
There is an urgent need for developing countries to diversify export products and export market to become more resilient to trade shocks
30
0
0.05
0.1
0.15
0.2
0.25
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
Pakistan EMDEs Advanced Economies
Export Concentration Index
Source: UNCTAD
Thank you
31