macro
DESCRIPTION
macro economics final projectTRANSCRIPT
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Macro-EconomicsMacro-EconomicsFinal Project
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Topic
TRADE AND
PAYMENTS
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Presented by:
• 13-4761 Ahsan Bashir
• 13-4713 Tayyab Javaid
• 13-4732 Kamran Zafar
• 13-4850 Saad Ahmed
• 13-4871 Syed Umer Shah
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Overview
• Introduction
• Growth and Balance of payments
• Trends in Exports
• Trends in Imports
• Bilateral and Regional Trade Agreements
• Conclusion
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Introduction
• Trade:
– Action of buying and selling goods and services
• Two types of trade:
– Exports:
– Send (goods or services) to another country for sale
– Imports:
– Bring (goods or services) into a country from abroad for sale
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Growth
• Growth of World Gross Product:
– 2.5% in 2013
– 2.6% in 2014
• World trade:
– 2.3% in 2013
– 2.8% in 2014
• Workers’ remittances:
– 13.7% 2013-14
– 16.1% 2014-15
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Balance of Payments
• External account balance surplus:
– US$ 1.95 billion 2013-14
– US$ 2.12 billion 2014-15
• Current account deficit:
– US$ 2.9 billion 2013-14.
– US$ 1.4 billion 2014-15
• Capital and financial account surplus
– US$ 5.3 billion 2013-14
– US$ 3.2 billion 2014-15
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Balance of Payments
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Current Account
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Workers’ Remittances
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Workers’ Remittances
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Capital and Financial Account
• Recorded a lower surplus of US$ 3.2 billion 2014-15
• Recorded a surplus of US$ 5.3 billion 2013-14
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Foreign Investment
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Foreign Exchange
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Trends in Exports
• Pakistan’s exports have been stagnant for the last few years
• Around US$ 24-25 billion
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Trends in Exports
• Pakistan's exports base and markets are extremely narrow
• Major portion of exports earning are by the cotton group
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Trends in Exports
• The other items of total exports are
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Trends in Exports
• Reasons for the slowdown in exports include:
– Decrease in International prices of commodities
– Increase in Cost of Production
– Energy Crises
– Lack of Research & Development
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Trends in Exports
• Top 5 countries, where Pakistan exports are:
• United States of America
• China
• Afghanistan
• Germany
• United Kingdom
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Trends in Exports
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Trends in Exports
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Trends in Exports
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Trends in Exports
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Trends in Imports
• Net imports:
– US $37,084.81 million 2013
– US $37,763.08 million 2014
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Trends in Imports
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Trends in Imports
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Trends in Imports
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Bilateral and Regional Trade
Agreements
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1. Trade Promotion with EU member’s countries
• 10 year GSP plus status for Pakistan by the European Union is a blessing for the
country.
• Pakistan’s total exports to EU during the calendar year 2012 amounted to US$ 5.6
billion.
• 82 % of our exports will now be duty free.
• Hence with the grant of GSP Plus status to Pakistan, more than 90 percent of our
exports to EU will be eligible for duty free access.
• It is estimated that due to GSP Plus there will be an increase of more than US$ 1.0
billion worth of exports to EU during the year 2014.
• Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA)
estimated around 100,000 new jobs will be created in textile garments sector only.
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Pakistan’s main Exports to European Union
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Duty free products from Pakistan to EU
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2. Trade Normalization with India
• A meeting was held between the Commerce Ministers of the two
countries in New Delhi in January 2014, on sidelines of the 5th
SAARC Business Leaders Conclave.
• The salient features of this understanding were as follows:
– Normalization of trade relations & providing Non-Discriminatory Market
Access (NDMA) on reciprocal basis, before the end of February 2014
– Increase in working hours at Wagah with the objective of round the clock
operations as soon as possible
– Allow transportation of cargo in containers by road through Wagah/Attari
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3. Progress on PTAs/FTAs
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Pak-Indonesia Preferential Trade Agreement (PTA)
• Indonesia and Pakistan signed a Preferential Trade Agreement
(PTA) on 3rd February, 2012.
• Agreement includes a total of 313 tariff lines for market
access at preferential tariff.
• Pakistan will import palm oil from Indonesia @ 15 percent
Margin of Preference (MoP) under the PTA.
• Indonesia extended tariff concessions to Pakistan on textiles
and horticulture products including kinnow.
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Pak-Malaysia FTA
• The Comprehensive Free Trade Agreement (FTA) for Closer
Economic Partnership between Pakistan and Malaysia was
signed on 08-11-2007 at Kuala Lumpur Malaysia.
• It became operational from 1st January 2008.
• Bilateral trade has increased by 36 percent since then from $
1.72 billion to $2.34 billion.
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Pak-China FTA
• China-Pakistan Free Trade Agreement (CPFTA) was signed
on 24th November, 2006
• Implemented from 1st July 2007
• Pakistan’s exports have increased by 400 percent from around
$600 million in 2006-07 to $2.6 billion in 2012-13.
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Impact of GSP Plus on Pakistan’s exports to EU
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Conclusion
• Pakistan balance of payments improved considerably
• Current account narrowed by more than 50 percent
• Exchange reserves posted an increase of US$ 3.6 billion
• Exchange rate remained stable
• Country’s import bill remained within the target
• Trade deficit remained within limits and witnessed marginal increase
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