the future of developing economies - icap cfo conference

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


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


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


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


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


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


Relief under Rozgar scheme

Regul. relief under Islamic Banking

schemes

Relief under RFCC

Risk sharing w/ Gov in Rozgar scheme

Relief under TERF




Relief for Corporate Financing Policy rate cut 100 bps

Extension under EFS, LTFF limits


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 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

http://www.ourworldindata.org/

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


Export Concentration Index

Source: UNCTAD

Thank you

31

the future of developing economies - icap cfo conference

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