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