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Remittances, Slap on the face for Critics !

April 11, 2017

@asadcmka
Asad Rizvi

I am not offending anyone, but trying to convey my message that it is our duty to make fair and honest comment, which is vital to our National Interest.

It is common practice in Pakistan to waste time and energy chasing the wrong leads. I am myself a big critic and never hesitate to point economic discrepancies to distinguish between claims and facts. I am firm believer in constructive criticism.

Since last eight months we have been witnessing articles and editorials in Pakistani Newspapers by the self-appointed so called financial experts that have been constantly forcefully criticizing, making noises and showing their concern about decline in remittances, which is proving to be erroneous, as the size in fall in 3 quarter of the current fiscal year is tiny.

It is because of their inability to analyzing monetary facts because the critics are not subject matter specialist.

The proof of the pudding is in the eating, as surge in March 2017 inflow of remittance to USD 1.694 Billion confirms Pakistan’s fiscal year end remittances figure will be close to my forecast of around USD 19 Billion, which is not a worrisome number.

This certainly does not mean the country do not have economic issues, they are huge in numbers and sizable too. Apart from Corruption, which is a major cause economic growth hindrance, the areas that need to be corrected are Revenue Collection, High Level of Import, Falling Exports, Looming Debt Bubble, External Borrowing and Payment Strategy.

High Level of SBP Target Rate & PIB/Sukuk Coupon Rate when inflation is comfortably below 4.5 pct, which is the cause of High Borrowing Cost and ever growing size of Deficit Financing that now, looks unstoppable. Liquidity Constrain forcing SBP to constantly inject funds in inter-bank market.

However, I totally support stronger Rupee, which failed to deliver result in last 10-yaers despite 75 pct Depreciation, but was one of the major causes of inflation pushing food and energy prices sharply higher. Instead stronger Rupee will arrest inflation and hold prices that will make life easier for common man.

I am quoting from my earlier written articles, which is available on my blog.

https://asadcmka.wordpress.com

Aug 16 = Recently on print and electronic media there is lot of bashing going on against government, blaming it for fall remittances by nearly 20 pct.

Argument given on Print and Electronic is totally weak as it is without any supportive evidence. The fall in remittances is annual phenomena. Historical evidence will tell that prior and few days after EID Holidays, which is normally 10-days period on an average, remittances do take a dip, as sender get exhausted after sending Eid and Zakat money.

Following month remittances flow is back on track, whereas pressure once again mounts at the time of Eid ul Azha and the trend remains almost identical.

January 2017 “Outlook Pakistan”

REMITTANCES = In Calendar year 2017, I do not see big fall in remittances, in later two half of FY 17 (Jan-June) flow will surge beyond USD 9.7 Billion. However, in remaining two months of July-Dec 2017, remittances may struggle to attain 9.5 Billion levels, but is likely to hit USD 19 Billion in four quarters of 2017.

(Disclaimer applies in my post, which means that the perspective is my personal view. I have made every effort to ensure accuracy of information provided. However, accuracy cannot be guaranteed. This article is strictly for information and not intended for Trade or Business Transaction). 

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