Pakistan Economy in the light of Business Cycles

Slides:



Advertisements
Similar presentations
6.02 Understand economic indicators to recognize economic trends and conditions B Explain the concept of Gross Domestic Product Understand.
Advertisements

Trade – A2 Economics. Aims and Objectives Aim: Understand the UK current account Objectives: Define UK current account Analyse the UK’s import and export.
A2 Economics PowerPoint Briefings 2009 Euro Area in Charts tutor2u ™ tutor2u ™
Introduction to Macroeconomics
Chapter 12 Managing the Macroeconomy. Stagflation: it occurs when recession and inflation takes place simultaneously in the economy.
1 Economic Cycle  Economic Cycle = one complete movement from peak to peak (or trough to trough)  Peak = height of economic prosperity.  Contraction.
1 Introduction to Macroeconomics Chapter 20 © 2006 Thomson/South-Western.
A FIRST LOOK AT MACROECONOMICS
8 CAPITAL, INVESTMENT, AND SAVING CHAPTER.
C27BA Introductory Macroeconomics Lecture 1 Introduction to Macro.
Economic Cycle  Economic Cycle = one complete movement from peak to peak (or trough to trough)  Peak = height of economic prosperity.  Contraction =
Boom and Bust: Economic highlights of the past century Differences between the Great Depression , and the Great Recession of Use of Deficit.
Reinert/Windows on the World Economy, 2005 Windows on the World Economy CHAPTER 1.
Macroeconomic Policy and Floating Exchange Rates
The study of the economics of countries. The big picture.
Economic Cycle Ups and Downs in the economy that occur repeatedly.
What is a Business or Economic Cycle?. The Economic Cycle This is a term used to describe the tendency of an economy to move its economic growth away.
Government Expenditures to Lead Long-Run Economic Improvement SOUTH AFRICA Nicole Lusignan & Ben Taylor.
Growth of the Economy And Cyclical Instability
Introduction to Macroeconomics
Chapter 19 Aggregate Demand and Aggregate Supply
A Tale of Two Crises: Korea’s Experience with External Debt Management Paper Prepared by Professor Yung Chul Park Seoul National University UNCTAD Expert.
Eesti Pank Bank of Estonia 15 years of currency board in Estonia Ülo Kaasik.
Chapter 8 Business Cycles Copyright © 2016 Pearson Canada Inc.
Economics: Chapter 13 Measuring the Economy’s Performance.
Business Cycle Three Types of Business Cycle Business Cycle Phases Business Cycles as shifts in AD and AS Business Cycle Theories.
Chapter 19 Introduction to Macroeconomics © 2009 South-Western/ Cengage Learning.
Review of the Previous Lecture Business Fixed Investment –Cost of Capital –The Determinants of Investment –Taxes and Investment.
THE ECONOMY AND THE CAPITAL MARKETS University of Connecticut School of Business Robert F. DeLucia March 26, 2004.
Economic Fluctuations Chapter 11. Chapter Focus Learn about aggregate demand and the factors that affect it Analyze aggregate supply and the factors that.
Chapter 5: The Economics of Interest- Rate Fluctuations Chapter Objectives Describe, at the first level of analysis, the factors that cause changes in.
Business Cycle and Economic Indicators
AQA Chapter 13: AS & AS Aggregate Demand. Understanding Aggregate Demand (AD) Aggregate Demand (AD) = –Total level of planned real expenditure on UK produced.
Economics 202 Principles Of Macroeconomics Lecture 10 Investment, Savings and the Real Interest Rate The role of the Government Savings and Investment.
Copyright © 2016 Pearson Canada Inc.
© 2006 Prentice Hall Business Publishing The Economic Way of Thinking, 11/e Heyne/Boettke/Prychitko “The Economic Way of Thinking” 11 th Edition Chapter.
Demand Forecasting Prof. Ravikesh Srivastava Lecture-11.
Economics The Business Cycle Unit 3, Lesson 2. What is the Business Cycle? The business cycle is a period of economic expansion followed by a period of.
Monetary Policy Changing reserve requirements altering minimum reserve requirements altering the “discount” rate Open market operations.
BUSINESS MANAGEMENT PAVONE 3-4 MANAGING THE ECONOMY.
Impact of Global Economic Crisis on Some Economic and Financial Egyptian Indicators.
Macroeconomic Framework Macroeconomics is a branch of economics that deals with the performance, structure, and behaviour of the economy as a whole.
AS Economics PowerPoint Briefings Introduction to Macroeconomics AS Economics.
Fluctuations in Real GDP ( The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment.
The Business Cycle.  The recurring and fluctuating levels of economic activity that an economy experiences over a long period of time.
The Government Budget, Foreign Borrowing, and the Twin Deficits
Business Cycle Three Types of Business Cycle Business Cycle Phases
6.00 Understand economics trends and communication.
PowerPoint #3 The Business Cycle The Federal Reserve
Introduction to macroeconomics
Recent US Economic Performance – Lecture 5
Introduction to Macroeconomics
MGMT 510 – Macroeconomics for Managers
Working Party on Financial Statistics
Economics Sample Unit 4 Macroeconomics
Introduction to the UK Economy
Introduction to Macroeconomics
MACROECONOMIC OBJECTIVES
Business Environment Analysis
SMALL BUSINESS THE BACKBONE OF THE CANADIAN ECONOMY
Business cycle and economic measures
Unit Three Review Macroeconomics.
Economic Vocabulary Hubbard 2005.
Measuring the Economy’s Performance
Economics The Business Cycle Unit 3, Lesson 2.
Economic Statistics.
CASE  FAIR  OSTER MACROECONOMICS PRINCIPLES OF
Models of economic cycle Types of economic cycles
Measuring the Economy.
Business Fluctuations
Presentation transcript:

Pakistan Economy in the light of Business Cycles- 2009-14 Muhammad Arif Editor At Large The Financial Daily Former Head of FSCD State Bank, Head of Research in Arif Habib Investments and professor on Finance in different Universities including KASBIT

Introduction The term business cycle (or economic cycle) refers to economy-wide fluctuations in production, trade and economic activity in general over several months or years in an economy organized on free-enterprise principles These fluctuations occur around a long-term growth trend, and typically involve shifts over time between periods of relatively rapid economic growth (an expansion or boom), and periods of relative stagnation or decline (a contraction or recession).

Business Cycles the Kitchin inventory cycle of 3–5 years (after Joseph Kitchin) the Jugular fixed investment cycle of 7–11 years (often identified as 'the' business cycle) the Kuznets infrastructural investment cycle of 15–25 years (after Simon Kuznets also called building cycle]) The Kondratiev wave or long technological cycle of 45–60 years (after Nikolai Kondratiev).

Background With globalization the economic activities are interconnected and booms and dips effect every part of the worlds with less or higher magnitude. Since 1930’s recession the world has faced five recessions. Four short terms and one that started in 2008 have extended up to 2013. To understand the problem one has to understand the basics of the Kitchen inventory cycle of 3–5 years (after Joseph Kitchen),the Jugular fixed investment cycle of 7–11 years (often identified as 'the' business cycle),the Kuznets infrastructural investment cycle of 15–25 years (after Simon Kuznets also called building cycle]),The Kondratiev wave or long technological cycle of 45–60 years (after Nikolai Kondratiev). The paper deals with understanding Business cycles dynamics i.e. better to understand the coming possible implications on macro indicators like countries as Pakistan in 7-11 years cycle

Methods and Procedures used in the paper Basically going through qualitative analysis and not using quantitative methods that provide only benchmarks. In this paper historical data has been used to predict about FY 2013-14

Business cycles in pakistan

Macro indicators 2008-2012 period 2008 2009 2010 2011 2012 World GDP growth % 3.1 -0.7 4.9 3.7 4.0 World CPI 5.6 2.7 4.8 Pakistan GDP growth 5.68 -1.6 3.8 3.5 Total investment growth 15.43 0.92 0.84 -4.7 -8.6 Discount rate 13 14 14.0 12.0 10.5 Average change in CPI 20.0 10.1 13.7 11.0 Direct Taxes Mn PKR 387.5 496.1 540.4 602 705,756 Indirect Taxes 621.9 755.4 942.6 955 981,228 Budget deficit % of GDP 8.3 4.2 4.7 6.6 8.5 Total export Mn USD 20,125 22,741 25,925 29,814 24.6 Total imports 35,411 38,952 37,004 37,744 40.0 Trade deficit (15,286) (16,211) (11,079) (7,930) (15.4) CA Balance -8.4 -9.3 -3.5 0.2 -4.6 USD-PKR Exchange rate USD/PKR 68.9294 82.062 85.2844 86.4450 94.8530

Marco indicators 2013-2014 period 2013 2014 World GDP growth % 3.5 4.0 World CPI 3.0 Pakistan GDP growth 3.7 4.7 Total investment growth -4.7 0.1 Discount rate 9.5 10.0 Average change in CPI 11.0 Direct Taxes Mn PKR 810,715 910.2 Indirect Taxes 1002,975 122,233 Budget deficit % of GDP 4.5 Total export Mn USD 25.8 25.2 Total imports 42.9 41.9 Trade deficit (17.1) (16.7) CA Balance -1.9 0.9 USD-PKR Exchange rate USD/PKR 99.0 96.2