balance of payments of pakistan (presentation)

8/4/2019 Balance of Payments of Pakistan (Presentation)

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BALANCE OF PAYMENTS AND

ITS PROBLEM IN PAKISTANPresented by : Ahtisham Rajput 107

Presented to : Sir Mohammad SalehMemon

Date : March 21, 2011


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TABLE OF CONTENTS

Introduction To Balance Of Payments

Terminology Of Balance Of Payments

History Of Pakistans Export Performance Exports From 1947 To 1971

Problems Of Pakistan Balance Of Payment

Impacts Of Balance Of Payment Deficit On Economy

Suggestions To Overcome Balance Of Payment Deficit

Conclusion


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INTRODUCTION

Balance of payments is a statistical statement designed to provide for aspecific period of time a systematic record of an economys transactionswith the rest of the world.

It is a Systematic record of all the economic transactions between thecountry and the rest of the world.

BOP PERFORMANCE HISTORY

Surpluses in Pakistan BOP

Reasons Of Surplus


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TERMINOLOGY OF BOP

Recording Results

Debit: The spending of foreign

currency is Debit and it is a

negative item.

Credit: If a transaction earnsforeign exchange for the nation, it

is recorded as a plus item and it is

a Credit.

Generally Imports are debits

and exports are credits.

If debits are more i.e. imports are

more than it is a negative sign for

the economy and it is known as

Deficit.

If credits are more i.e. exports are

more than it is a positive sign for

the economy and it is known as

Surplus.

Pakistan has a Deficit B.O.P for

many years due to dependency on

imports.


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BALANCE OF PAYMENTS- COMPONENTS :

B.O.P Comprises of :

Current Account includes : Merchandise (Import/Export) , Services,Investment Income and Unilateral Transfers (Foreign Aid etc.)

Financial Account And Capital Account includes: Loan transactions,Investment Flows, Short term capital and other related items.

Official Reserves: Holding of foreign currency by state bank is known asforeign reserve.


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CURRENT ACCOUNT

Current Account 2007-08 2008-09 2008-09 2009-10

Balance -13874 -9252 -8982 - 3060

Summary Of Current account ($ Million)


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CAPITAL AND FINANCIAL ACCOUNT

Capital And

Financial Account

2007-08 2008-09 2008-09 2009-10

Balance 8252 6058 4495 3942

Summary Of Capital And Financial Account $ Million


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FOREIGN RESERVES

Source:http://www.sbp.org.pk/ecodata/forex.pdf


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EXPORTS PERFORMANCE OF PAKISTAN

Major Exports Of Pakistan

Composition Of Pakistan's Exports


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EXPORTS PERFORMANCE OF PAKISTAN

Major Sources Of Pakistans Exports


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IMPORTS PERFORMANCE OF PAKISTAN


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IMPORTS PERFORMANCE OF PAKISTAN


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Summary Of BOP

Current Position Of Current Account.

Current Position Of Capital and financial account.

Current Position Of foreign Reserves.

Current Position Of Exports And Imports

Current Position Of Bop.


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Problem Of Pakistans B.O.P

Dependence On Textile

Import Oriented Industry

Tough Competition In International Market

Political Uncertainty

Increase In Prices Of Inputs

Fiscal Policy

Exports Of Primary Goods And Imports Of Finished Goods Energy Crisis

Dependence On Foreign Assistance

Natural Disasters

Shortage Of Availability Of Credit To Private Sector

Limited Countries Exports Strikes And Processions

Rise In Freight Rates

Consumption Oriented Society


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Impacts Of Balance Of Payment Deficit On Economy

Foreign Reserves Of Country Shrink

It Leads Us To Borrow Money From Other Financial Institutions

Foreign Earning Will Decrease

Countrys Currency Value May Depreciate


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SUGGESTIONS

Improve The Technology

Exploration Of New Markets

Ban On Strikes And Processions

Law And Order

Brand Oriented Marketing

Cost Of Doing Business

Dependence On Textile Sector Exports Minimize Expenditure On Importing Services

Export Of Finished Goods Rather Than Primary Goods

Resolution Of Energy Problem

Improved Fiscal Policy

Improved Infrastructure

Pakistan needs a leadership with competence, very strong nerves, clearunderstanding of the issues and psyche of the other side of the table, abilityto negotiate with the super powers and come out with a most suitablepackage.


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CONCLUSION


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Thank You for your patience

balance of payments of pakistan (presentation)

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