Ownership Rates of Durable Goods in India and Pakistan

Ownership of consumer durables like computers, home appliances and vehicles is often seen as an important indicator of the size and health of the middle classes in emerging economies. Examples of periodic household surveys used by researchers to measure such data include NSS (National Sampling Survey) in India and PSLM (Pakistan Social and Living Standards Measurement) in Pakistan.

Durables Ownership in India and Pakistan. Source: KSBL

India-Pakistan Comparison:

Dr. Jawaid Abdul Ghani, a professor at Karachi School of Business Leadership, has recently analyzed household surveys in India and Pakistan to discover the following:

1.  As of 2015, car ownership in both India and Pakistan is about the same at 6% of households owning a car. However, 41% of Pakistani household own motorcycles, several points higher than India's 32%.

Appliance Ownership in South Asia. Source: Seeking Alpha

2. 12% of Pakistani households own a computer, slightly higher than 11% in India.

3. Higher percentage of Pakistani households own appliances such as refrigerators (Pakistan 47%, India 33%), washing machines (Pakistan 48%, India 15%) and fans (Pakistan 91%, India 83%).

4. 71% of Indian households own televisions versus 62% in Pakistan.

Durables Ownership Growth in Pakistan. Source: KSBL
Growth over Time:

Dr. Abdul Ghani has also analyzed household data to show that the percentage of Pakistani households owning washing machines has doubled while car and refrigerator ownership has tripled and motorcycle ownership jumped 6-fold from 2001 to 2014.

Income/Consumption Growth in Pakistan. Source: KSBL

Rapid Income Growth:

Rising ownership of durables in Pakistan has been driven by significant reduction in poverty and growth of household incomes, according to Dr. Abdul Ghani's research. Percentage of households with per capita income of under $2 per day per person has plummeted from 57% in 2001 to 7% in 2014. At the same time, the percentage of households earning $2 to $10 per day per person has soared from 42% of households in 2001 to 87% of households in 2014.  The percentage of those earning over $10 per day per person has jumped 7-fold from 1% of households in 2001 to 7% of households in 2014.

Pakistani Middle Class:

Only 5% of Pakistanis in $2-$4 per day per person income group have college degrees. But 20% of those in $4-$10 have college degrees, according to the survey results.

Pakistan Middle Class Profile. Source: KSBL

Credit Suisse Income and Wealth Data:

Average Pakistani adult is 20% richer than an average Indian adult and the median wealth of a Pakistani adult is 120% higher than that of his or her Indian counterpart, according to Credit Suisse Wealth Report 2016. Average household wealth in Pakistan has grown 2.1% while it has declined 0.8% in India since the end of last year.

Median wealth data indicates that 50% of Pakistanis own more than $1,180 per adult which is 120% more than the $608 per adult owned by 50% of Indians.

GDP Estimates Using Household Survey Data:

Pakistan's GDP calculated from consumption data in PSLM is significantly higher than the government estimates based on production data. The reverse is true of Indian GDP.

M. Ali Kemal and Ahmed Waqar Qasim, economists at Pakistan Institute of Development Economics (PIDE),  explored several published different approaches for sizing Pakistan's underground economy and settled on a combination of  PSLM (Pakistan Social and Living Standards Measurement) consumption data  and mis-invoicing of exports and imports to conclude that the country's "informal economy was 91% of the formal economy in 2007-08". 

Prominent Indian economists Abhijit V Banerjee, Pranab Bardhan, Rohini Somanathan and TN Srinivasan teaching at MIT, UC Berkeley, Yale University and Delhi School of Economics believe that India's GDP estimate based on household survey (National Sampling Service or NSS) data is about half of what the Indian government officially reports as India's GDP. 

Here's a quote from French economist Thomas Piketty's book "Capital in the Twenty-First Century" explaining his skepticism of production-based official GDP figures of India and China:

"Note, too, that the very high official growth figures for developing countries (especially India and China) over the past few decades are based almost exclusively on production statistics. If one tries to measure income growth by using household survey data, it is often quite difficult to identify the reported rates of macroeconomic growth: Indian and Chinese incomes are certainly increasing rapidly, but not as rapidly as one would infer from official growth statistics. This paradox-sometimes referred to as the "black hole" of growth-is obviously problematic. It may be due to the overestimation of the growth of output (there are many bureaucratic incentives for doing so), or perhaps the underestimation of income growth (household have their own flaws)), or most likely both. In particular, the missing income may be explained by the possibility that a disproportionate share of the growth in output has gone to the most highly remunerated individuals, whose incomes are not always captured in the tax data." 

Who is Dr. Jawaid Abdul Ghani?

The PSLM household data cited in this blog post is taken from a recent presentation made by Dr. Jawaid Abdul Ghani at the Karachi School of Business and Leadership (KSBL) where he teaches. KSBL has been established in collaboration with  Cambridge University's Judge Business School. Prior to his current faculty position, Dr. Abdul Ghani taught at MIT's Sloane School of Management and Lahore University of Management Sciences (LUMS). He has a computer science degree from MIT and an MBA from Wharton Business School.


Pakistan has managed to significantly reduce poverty and rapidly grow its middle class since 2001 in spite of major political, security and economic challenges. The foundation for the rise of the middle class was laid on President Musharraf's watch by his government's decisions to invest in education and infrastructure projects that led to the expansion of both human and financial capital. My hope is that the continued improvement in security situation and implementation of China-Pakistan Economic Corridor (CPEC) related projects will bring in higher long-term investments and accelerate Pakistan's progress toward prosperity for all of its citizens.

Related Links:

Haq's Musings

Credit Suisse Wealth Report 2016

Pakistan: A Majority Middle Class Country

Karachi School of Business and Leadership

State Bank: Pakistan's Actual GDP Higher Than Officially Reported

College Enrollment in Pakistan

Musharraf Accelerated Development of Pakistan's Human and Financial Capital

China-Pakistan Economic Corridor


Riaz Haq said…
In India, washing machines top computers in popularity
A majority of Indian households own a TV while 29% own a refrigerator, according to the ICE 360° survey


Fresh data from a large-scale nationally representative survey conducted this year (2016) shows that the washing machine has become a more popular household asset than the computer in India. The ‘Household Survey on India’s Citizen Environment & Consumer Economy’ (ICE 360° survey) shows that 11% households own a washing machine while only 6% own a computer or a laptop. The survey covering 61,000 households is among the largest consumer economy surveys in the country.

The survey shows a drop in the proportion of computer-owning households compared to the 2011 census, when nearly 10% households reported having either a computer or a laptop (the census did not report data on washing machines). The ICE 360° survey also shows that 10% households reported having an Internet connection, 1% lower than the proportion of households with a washing machine. But the proportion of households where at least one household member reported accessing the Internet (including those who accessed the Internet at work) is significantly higher at 22%.

The survey also shows that a large majority of Indian households owns a TV today. The 2011 census had showed that 47% households have a TV set. That proportion has increased to 65%, according to the ICE 360° survey. As TV becomes a mass market product, the refrigerator may be turning into the kind of aspirational product that the TV once used to be. A majority of the top quintile owns a refrigerator. A majority of the salaried class also owns a refrigerator. Nationally, 29% households own a refrigerator.

Riaz Haq said…
Brisk sales of appliances in Pakistan


The home appliances business is thriving and key market players expect consumer demand to surge as households generally replace their old appliances with newer models.

According to an assessment, almost all concrete houses in first-, second- and third-tier cities, from posh areas to shanty settlements, have fans. The reach of the television is said to be as high as 80pc. In major cities, almost 60pc of households are said to have fridges and washing machines, on average.

And China is reaping the benefit of the changing lifestyle in Pakistan, as the bulk of key components used in home appliances are imported from the Asian giant, leading companies in the business confirmed.

According to the Survey, “In electronic products, air conditioners, deep freezers, electric motors, storage batteries and refrigerators were main contributors (to LSM), growing by 36.12pc, 83.03pc, 20.1pc, 3.2pc and 3.6pc respectively”.

According to latest PBS figures released on March 24, the production of home appliances — including refrigerators, TV sets, air conditioners and sewing machines — rose 10pc to 1.2m units during July-January 2014-15. The production of the most popular products — fridges and deep freezers — was up 15pc to 0.8m units, against 0.7m units during the same period of the previous year.

And the production of television sets — the second most popular category in electronic goods — grew 5pc to 57,000 units during July-January. But air conditioner and sewing machines declined 6pc and 1pc over the period.

Riaz Haq said…
What's the reality behind all the praise for Pakistan's economy?
There is no doubt that Pakistan’s economy has seen qualitative shifts towards increased marketisation and commodification in the past two decades. However, the claims extrapolated from these shifts require further scrutiny


Underpinning much of the coverage is a set of core statistics: the country’s GDP growth rate crossed 4 percent last year, and is expected to surpass 5.5 percent in 2017. The stock market rose by 46 percent in 2016, and is now in line for an upgrade to emerging market status by the middle of 2017. Foreign exchange reserves have grown to a record high of $20 billion, while more inflows are expected via a number of big-ticket energy and transit projects under the $57 billion China Pakistan Economic Corridor (CPEC). Finally, measurements by the United Nations Development Program (UNDP) show multidimensional poverty declining from 55 percent of all households in 2005 to 38 percent in 2015.

Beyond macroeconomic indicators, another factor that has received considerable attention in recent coverage is the country’s growing middle class. One recent piece, published in the Wall Street Journal, cited this burgeoning middle class as the primary fuel behind the twin boon of democratic stability and economic growth.

Depending on the definitions used, Pakistan’s middle class is estimated to be anywhere between 5 to 35 percent of the population. Using income-based methods, the Pakistan Institute of Development Economics (PIDE) finds that approximately 55 million people earn between 75 to 125 percent of the overall median income. Credit Suisse, on the other hand, estimates that 9.7 percent of Pakistan’s adult population, around 7 million people, possess wealth between $10,000 and $100,000. By this measure, Pakistan’s would be the 18th largest middle-class in the world.

In the absence of reliable data on changes in the income distribution, a number of other metrics serve as a useful way to gauge Pakistan’s "middle-class revolution". One of these is the ownership of consumer durables: today, approximately 40 percent of all households own a motorcycle while nearly 60 percent own a television, up from 4 and 20 percent respectively in the early 1990s. Similarly, household ownership of washing machines and refrigerators is now in the mid-40s as well, up from under 20 percent just two decades ago. This expanding market for sale of household appliances, along with its untapped potential, has not gone unnoticed by foreign investors. Late last year, the Turkish consumer goods giant Arcelik entered the Pakistani market through a $240 million buy-out of a local white goods manufacturer.

Similar expansion at the upper-end of the consumer market can be gauged from the sale of passenger cars, which rose from 40,000 units in 2000 to nearly 200,000 in 2016. A considerable portion of this market is now financed through credit, as banking outlays for the purchase of automobiles hit an all-time high of $1.1 billion in 2016, up from $415 million in 2012.

Beyond descriptive statistics, the spatial and visual transformation in Pakistan’s expanding urban centres tell a similar story. Private schools and colleges have cropped up everywhere, offering instruction in the English language as their contribution towards personal enrichment and upward mobility. Similarly, new real estate developments in housing and retail can be found selling profitability and modern amenities to investors and consumers respectively. Advertising campaigns for these projects often rely on some variant of an idealised western lifestyle, clearly playing on, and perhaps in part shaping, the aspirations of a vociferous market.
Riaz Haq said…
#Smartphone sales take off in #Pakistan. 40 million owned today. http://bit.ly/2pS6WTY via @techjuicepk

As smartphones flood into the country, more and more Pakistanis switch from feature phones to smartphones. Those who have not yet taken them up haven’t done so majorly due to safety concerns, and not for the lack of inclination towards the new trending gadgets. The share of smartphone continuously rises even more in a market equipped with 3G and 4G, that have 35 million mobile data subscribers.

While Apple’s iPhone and the more feature-rich models of Samsung have been favorites among technology enthusiasts and high-income group consumers, low-end models Huawei, Samsung and QMobile are popular because of the reasonable price range they offer. QMobile dominates both smartphone and feature phone markets and holds over 50 % of the smartphone market segment. Last year, Samsung had 20.5% of the smartphone market share while Huawei increased its share from 7.3 % to 8.9%.

The prevalence of smartphones among people-powered the growth of businesses like Careem, which, without owning a single vehicle, has become a successful business worth 1 billion US dollars. Smartphones are the market square for businesses today. As they offer technology connectivity, entrepreneurs expect them to be a selling medium for products and ideas.

The flourish in smartphones in these recent years has seen to it that Pakistani mobile users do not see the mobile phone as a mere communication device anymore. Besides connecting people, phones are now connecting technologies. The arrival of smartphones has meant that your phone is now a camera, as well as a photo editor, a document scanner, weather forecaster, a tiny portable workstation and much more.

Additionally, thanks to new online business and medical technology solutions, this pocketable device promotes health and security, and make traveling, eating, paying bills more enjoyable and simpler experiences. Smartphones have given urban life in the fast lane a boost and profited start-ups and business ventures. It is no wonder that, along with our dependence on these devices, expectations we have from them are rising. Users expect them to provide convenience and solutions in every domain, from health, recreation, and logistics to simplifying daily cumbersome tasks.

IDC expects smartphones to overshadow feature phones by end of 2017, even though smartphones currently make up 31% of the mobile market. It seems a huge chunk of our population is steadily adopting to smarter phones. Pakistan is also estimated to have 17 million new mobile subscribers by 2020, TechJuice reports from the GSMA’s 2017 Mobile Economy Report. These trends are indications of increasing technology awareness in our nation. As mobile and smartphone users increase in different income groups, we can expect changes in the lifestyle of entire communities. More and more people will have access to the convenience and technology solutions offered by and through smartphones. The increased number of users bring business opportunities for entrepreneurs that want to use this medium to access a wide base of customers.
Riaz Haq said…
Pakistan Social And Living Standards Measurement

The PSLM Project is designed to provide Social & Economic indicators in the alternate years at provincial and district levels. The project was initiated in July 2004 and will continue up to June 2015. The data generated through surveys is used to assist the government In formulating the poverty reduction strategy as well as development plans at district level and for the rapid assessment of program in the overall context of MDGs. As such this survey is one of the main mechanisms for monitoring MDGs indicators. It provides a set of representative, population-based estimates of social indicators and their progress under the PRSP/MDGs. For Millennium Development Goals (MDGs), UN has set 18 targets for 48 indicators for its member countries to achieve by 2015. Pakistan has committed to implement 16 targets and 37 indicators out of which 6 targets and 13 indicators are monitored through PSLM Surveys. The PSLM surveys are conducted at district level and at Provincial level respectively at alternate years. PSLM District level survey collects information on key Social indicators whereas through provincial level surveys (Social & HIES) collects information on social indicators as well as on Income and Consumption while in specific sections also information is also collected about household size; the number of employed people and their employment status, main sources of income; consumption patterns; the level of savings; and the consumption of the major food items. However, Planning Commission also uses this data for Poverty analysis.

An other important objective of the PSLM Survey is to try to establish the distributional impact of development programs; whether the poor have benefited from the program or whether increased government expenditure on the social sectors has been captured by the better off.

The sample size of PSLM surveys district level is approximately 80000 households and approximately 18000 at Provincial level.

Main Indicators

Indicators on Demographic characteristics, Education, Health, Employment, Household Assets, Household Amenities, Population Welfare and Water Supply & Sanitation are developed at National/Provincial /District levels.

Riaz Haq said…
One in three households in India owns a two-wheeler
A majority of car owners prefer to use a two-wheeler to reach work, according to the ICE 360° survey 2016


The proportion of car-owning households in the country was 5%, according to the 2011 census data. That proportion has more than doubled, and stands at 11% today as per the ICE 360° survey 2016. The proportion of two-wheeler owners has increased 15 percentage points to 36%, while the proportion of bicycle owners has increased 13 percentage points since 2011 to 58%, the survey shows.

Households in the top quintile account for a majority of the cars and more than a third of two-wheelers in the country. The top 10% accounts for 46% of the cars and 22% of two-wheelers in India. The bottom quintile, which is the poorest 20%, accounts for a majority of the bicycles in the country, as per the survey. Households having a motorcycle or a scooter or a scooty or a moped have been categorized as owning a two-wheeler in this analysis.

Riaz Haq said…
#Pakistan #steel output up 23% in 2016, fastest growth among 40 countries. #India #Iran #Vietnam #Kazakhstan #China https://www.bloomberg.com/news/articles/2017-05-15/china-building-boom-to-churn-out-pakistan-s-largest-steel-ipo

Agha Steel Industries Ltd. is planning Pakistan’s biggest-ever private sector initial share sale this year to help boost output as China funds more than $55 billion in infrastructure projects across the nation and a buoyant stock market spurs investor demand.

The Karachi-based company plans to raise as much as 10 billion rupees ($95 million) selling a 25 percent stake, Executive Director Hussain Agha said in an interview. The sale will be the largest since the 12-billion rupees government stake sale of Habib Bank Ltd. in 2007, the country’s largest IPO yet.

Steel and cement makers in Pakistan are expanding to meet demand as the “One Belt, One Road” trade route financed by China spurs construction. The nation’s economy has grown at about 5 percent annually since 2013, encouraging Agha’s peers including International Steels Ltd. and Aisha Steel Mills Ltd. to lift production.

“You need roads, sky rises and housing,” said Agha. “Pakistan’s steel industry is in an infancy stage and growing at a massive pace -- the whole environment will change.”

Read more: Chinese Largesse Lures Countries to Its Belt and Road Initiative

The company will use the funds for $50 million expansion that will triple output to 500,000 metric tons within two years. Production will then double to a million tons by 2023, he said. Habib Bank has been appointed financial adviser while Arif Habib Ltd. and BMA Capital Ltd. were picked as book runners for transaction.

Pakistan’s steel output grew 23 percent to 3.6 million tons in 2016, the biggest gain among 40 nations, according to the World Steel Association. Agha Steel expects construction-grade steel, such as rebars and wire rods, to grow as much as 12 percent annually for the next three years.

The construction sector expanded 13 percent in year ended June 2016, more than twice the pace in the previous 12 months, according to State Bank of Pakistan’s annual report. Rapid urbanization and rising income levels has left the nation with an annual shortfall of 500,000 homes, according to real-estate developer Arif Habib.

“Real-estate is the main engine for this growth, it has really picked up,” said Ayub Khuhro, chief investment officer of Karachi-based Faysal Asset Management Ltd., which has about 8 billion rupees in stocks and bonds. “The government is also willing to protect companies with anti-dumping measures.”
Riaz Haq said…
Is #India Lying About Its World Beating #Economy? #Modi #BJP http://www.barrons.com/articles/is-india-lying-about-its-world-beating-economy-1488769695 … via @barronsonline

India just announced its October-December GDP figures, supposedly showing it is still the fastest-growing major economy. You should not believe it. Every quarter there are questions about India’s GDP, with this one no exception. But there is a bigger problem: India refuses to publish the full GDP series, so that the world may not be able to trust the Indian government’s claims at all.

Economic growth should be measured by personal or household income. Instead it is measured by GDP, an accounting tool far more relevant for top-down planners than ordinary people. This is hardly India’s fault, but India has done a small bit to make the problem worse.

In January 2015 India revised recent GDP growth figures higher, among other things raising the fiscal year 2013-4 gain from 5% all the way to 6.9%. It is at this point the fastest-growing economy boasts began. Questions about the revision were raised immediately, including by current Indian government officials, because purportedly faster GDP did not fit with many other indicators. (It still does not.)

Since then, however, the new series has become widely used. While the Indian government argues that it better matches global practices, it manifestly fails to do so in an indispensable respect. The back series – the necessary base for calculations of ongoing GDP growth – has not been published more than 2 years later. Technically, we do not know India’s GDP in 2010, or anytime earlier.

The back series was first to be published December 2015, then mid-2016, and now has no apparent due date and will not be complete. The “globally accepted” new approach therefore makes it impossible to assess India’s GDP trajectory, potentially important information for a country aspiring to rapid development.

The best way to proceed in this case was to start from the beginning, applying the new method to a base year as far in the past as possible and generating new data forward from there. The obvious question is how India determined growth when earlier years could not serve as a base? The answer is unfortunately political: the government’s desire to report faster growth trumped accuracy.

It all may sound familiar. India seemingly always has an eye on China. If China pulled a stunt like this, its “world-beating” claims would be roundly ridiculed. India initially had the benefit of the doubt because it is a multi-party democracy with a competitive press. Those are very good reasons, but not good enough. One benefit of an open society is transparency, and the Indian government is being opaque in self-interested fashion.

India had a poor reputation for statistics quality before the GDP revision. It just revised a GDP growth figure from 7.2% all the way down to 6.5% for Q415.There are other, crucial statistics practices, for example concerning rural electrification, that are clearly biased in the government’s favor. In this context, hiding past GDP looks like a continuation of previous behavior.

Most people from pluralist open societies want to see pluralist, open India do well. For now, however, India has the same level of economic credibility as a country like Vietnam (which publishes GDP results even before the year ends). World-beating growth? Maybe. Or maybe poorly founded quasi-propaganda.
Riaz Haq said…
Pakistan's finance minister paints a bright economic picture
Ishaq Dar lauds infrastructure and development partnerships as a path to growth

GO YAMADA, Nikkei senior staff writer


Pakistan is determined to funnel more money toward infrastructure, small businesses and the poor, and the government has found an array of international partners to make it happen.

Finance Minister Ishaq Dar recently spoke with The Nikkei about Pakistan's development drive and the federal budget for the coming fiscal year through June 2018, which he said will focus on generating 6% gross domestic product growth.


Speaking about the budget to be announced on May 26, Dar said: "After [achieving] macroeconomic stability, we have fully focused on higher GDP growth that brings a better life to people, better per capita income, job opportunities and fills the gap in infrastructure demand."

Next fiscal year, he said, "our efforts will give [growth] another boost. Some fiscal measures and policies will be introduced."

FUNDING DEVELOPMENT Dar pointed to a recent agreement with the World Bank-affiliated International Finance Corporation to set up a Pakistan Infrastructure Bank.

The bank will provide financing for infrastructure projects undertaken by the private sector, he said, describing the new lender as an "equal partnership by the Pakistan government and IFC for 20% each." Other stakeholders from around the world will account for the rest, he said. The bank is expected to have paid-up capital of $1 billion.

And the infrastructure bank is just one piece of the puzzle. "With partnerships with the U.K.'s Department for International Development and the German government-owned development bank KfW, we have created the Pakistan Microfinance Investment Co.," Dar said. Its three-year business plan calls for boosting the number of "beneficiaries of microfinance from the current 4 million to 10 million."

The government, the U.K. aid agency and KfW are teaming up to create the Pakistan Poverty Alleviation Fund. Pakistan will hold 49% of the fund, with the U.K. and German partners holding 37% and 14%, respectively.

Islamabad has also established the Pakistan Development Fund, which will invest in public-sector projects outside the budget. The government's initial investment comes to $1.5 billion.

As for the economy, Dar said the government is "hoping for over 5% growth" for the current fiscal year, noting that the "World Bank is projecting 5.2% in 2017 and 5.5% in 2018."

Looking ahead, he suggested 6% growth is possible for next fiscal year, and that it could reach 7% the following year. "Our GDP is reportedly underestimated by 22-25%. If [the reported growth rate for] fiscal 2017-18 is 6%, it will be actually 7% or more," Dar said.

According to Dar, an old method of calculating national output is responsible for the discrepancy. "It has to be upgraded," he said. "And businesses, especially small and medium-sized businesses, have not been [brought into] the database on which GDP is calculated over 10 years."

To paint a more accurate picture, Dar said he recently "authorized the World Bank to carry out a study, and they will take one year."

UNDAUNTED BY DEFICITS Although Pakistan has had success containing inflation and attracting foreign direct investment, its fiscal and current-account deficits are a risk factor. Dar, however, disputed that, saying: "The fiscal deficit is not an issue. From fiscal 2012-13 to 2015-16, we cut the fiscal deficit from 8.8% to 4.6% of GDP. This fiscal year, we expect it will be close to 4.1%."

Dar chalked up the deficit to two major budget items. One is infrastructure development. "We see a jump from 600 billion rupees ($5.73 billion) in fiscal 2012-13 to 1,600 billion rupees in fiscal 2016-17."
Riaz Haq said…
Indian media on Bunji and Bhasha dams in Gilgit Baltistan:

China To Invest $27 Billion In Construction Of Two Mega Dams In Pakistan-Occupied Gilgit-Baltistan


China and Pakistan have inked a memorandum of understanding (MoU) for the construction of two mega dams in Gilgit-Baltistan, a part of India’s Jammu and Kashmir state that remains under latter’s illegal occupation. The MoU was signed during the visit of Pakistan’s Prime Minister Nawaz Sharif to Beijing for participation in the recently concluded Belt and Road Initiative.

The two dams, called Bunji and Diamer-Bhasha hydroelectricity projects, will have the capacity of generating 7,100MW and 4,500MW of electricity respectively. China will fund the construction of the two dams, investing $27 billion in the process, a report authored by Brahma Chellaney in the Times of India has noted.

According to Chellaney, India does not have a single dam measuring even one-third of Bunji in power generation capacity. The total installed hydropower capacity in India’s part of the state does not equal even Diamer-Bhasha, the smaller of the two dams.

The two dams are part of Pakistan’s North Indus River Cascade, which involves construction of five big water reservoirs with an estimated cost of $50 billion. These dams, together, will have the potential of generating approximately 40,000MW of hydroelectricity. Under the MoU, China’s National Energy Administration would oversee the financing and funding of these projects.
Riaz Haq said…
Economic Survey of Pakistan 2016-17


Per Capita Income in dollar terms has witnessed
a growth of 6.4 percent in FY 2017 as
compared to 1.1 percent last year. The per
capita income in dollar terms has increased
from $ 1,531 in FY 2016 to $ 1,629 in FY
2017. Main contributing factors for the rise in
per capita income are higher real GDP, growth,
low population growth and stability of Pak


Real GDP growth was above
four percent in 2013-14 and has smoothly
increased during the last four years to reach
5.28 percent in 2016-17, which is the highest in
10 years.


The agriculture sector met
its growth target of 3.5 percent, helped by
government supportive policies and by
increased agriculture credit disbursements.
During 2015-16, the agriculture credit
disbursement was close to Rs 600 billion while
during 2016-17, the target was raised to Rs 700
billion. During July-March 2016-17, the
disbursement was observed to be 23 percent
higher as compared to the previous year. These
developments, along with the Prime Minister’s
Agriculture Kissan Package together with other
relief measures have started yielding positive
The large-scale manufacturing output is
primarily based on Quantum Index
Manufacturing (QIM) data, which show an
increase by 5.06 percent from July 2016 to
March 2017. Major contributors to this growth
are sugar (29.33 percent), cement (7.19
percent), tractors (72.9 percent), trucks (39.31
percent) and buses (19.71 percent). High
growth of sugar is based on production of 73.9Million Tons of Sugarcane as compared to 65.5
million tons last year, which represents an
increase by 12.4 percent.
Large Scale Manufacturing growth has picked
up momentum and posted a strong 10.5 percent
growth in the month of March 2017 compared
to 7.6 percent in March 2016. The YoY growth
augurs well for further improvement in growth
during the period under review.
On average, the LSM growth stood at 5.06
percent during July-March FY 2017 compared
to 4.6 percent in the same period last year. The
sectors recording positive growth during JulMar
FY 2017 are textile 0.78 percent, food and
beverages 9.65 percent, pharmaceuticals 8.74
percent, non-metallic minerals 7.11 percent,
cement 7.19 percent, automobiles 11.31
percent, iron & steel 16.58 percent, fertilizer
1.32 percent, electronics 15.24 percent, paper &
board 5.08 percent, engineering products 2.37
percent, and rubber products 0.04 percent.
Pakistan is bestowed with all kinds of resources
which also include minerals. Pakistan possesses
many industrial rocks, metallic and nonmetallic,
which have not yet been evaluated. In
the wake of the 18th Amendment, provinces
enjoy great freedom to explore and exploit the
natural resources located in their authority, with
the result that they are currently undertaking a
number of projects using their own resources,
or in collaboration with the federal government
or with donors to tap and develop these
The services sector recorded a growth of 5.98
percent and surpassed its target which was set
at 5.70 percent. Wholesale and retail trade
sector grew at a rate of 6.82 percent. The
growth in this sector is bolstered by the output
in the agriculture and manufacturing sectors.
The share of Agriculture, Manufacturing and
Imports in Wholesale and Retail Trade growth
is 18 percent, 54 percent and 15 percent
respectively. The Transport, Storage and
Communication sector grew at a rate of 3.94
percent. Finance and insurance activities show
an overall increase of 10.77 percent, mainly
because of rapid expansion of deposit formation
(15 percent) and demand for loans (11 percent).
Riaz Haq said…
India's national accounts on economic growth wrong: Expert
BY PTI | UPDATED: JUN 03, 2017, 01.51 PM IST

Read more at:

"They (India's national accounts) show India's growing at seven per cent a year. But I along with many other economists, I'm afraid don't believe the national accounts. They were redone in 2011," Vijay R Joshi, Emeritus Fellow of Merton College, Oxford and Reader Emeritus in Economics, University of Oxford, told a Washington audience.

Joshi, the author of a book titled 'India's Long Road--The Search for Prosperity' alleged that India's growth rate is back at 5.5 per cent, but the na ..
Riaz Haq said…
#Pakistan car sales in July 2017 jump 41% to 19,577 units in July 2017, from July 2016 #Tractor sales spike 125% YoY


Sales of locally assembled vehicles, including jeeps and light commercial vehicles, jumped to 19,577 units in July 2017, up 41% compared to 13,932 units in the same month of 2016, according to latest data released by the Pakistan Automotive Manufacturers Association (PAMA).

A Topline Securities’ report said the numbers were in line with its estimates. The apparently large difference in monthly sales may be attributed to reduced working days in July 2016 because of Eid holidays, the report said.

Pakistan could soon see these electric cars on its roads
Sales of Pak Suzuki Motor Company increased 37% year-on-year (YoY) in July 2017 due to strong demand for Wagon-R, up 77%.

With the introduction of a new model, sales of Cultus rose 66% YoY while Ravi sales were up 41%, which also supported the company’s growth.

Honda outperformed its peers in vehicle sales, posting 113% growth due to successful introduction of a new Civic model and new sports utility vehicle (SUV) BR-V.

Indus Motor sold 4,618 units in July 2017, up 11% YoY. The company’s focus remained on production of higher-margin Fortuner, which recorded a stellar growth of 543%.

Moreover, buyers were postponing their purchase of Toyota Corolla, waiting for the face-lift model, which has arrived now.

Truck and bus sales of PAMA member companies in July 2017 remained strong, growing 13% YoY. The trend is expected to continue, fuelled by the China-Pakistan Economic Corridor (CPEC) led growth, higher road connectivity, lower financing rates and enforcement of the axle load limit per truck on highways by the National Highway Authority.

Two and three-wheel vehicle sales for July 2017 grew strongly by 42% YoY due to rising disposable income of the lower middle class, the report added.

Why Pakistan should switch to hybrid cars

Tractor sales continued to exhibit an upward trajectory with sales growing by 125% YoY in July 2017.

Lower general sales tax, improved crop yield due to Punjab government’s Kisan Package and continuation of fertiliser subsidy to improve farmers’ purchasing power contributed to the strong tractor sales.

Moreover, in the provincial budget for fiscal year 2018, the Sindh government has set aside Rs2 billion in subsidy on tractor purchases by farmers.
Riaz Haq said…
The retail sector seems to be priming the economic pump. As per latest data released by the Pakistan Bureau of Statistics, the overall output of the large-scale manufacturing (LSM) index grew by 5.69 percent in Jul-May FY17. (For more on LSM going forward, please read “L-S-M!” published August 2).


Among the top-three growth industries in the FY17 LSM index is ‘electronics’ – the other two being ‘iron and steel products’ and ‘automobiles’. Having a roughly 2 percent weight in the LSM index, the electronics industry grew by a recent high of 16.18 percent year-on-year in 11MFY17.

The key electronics items illustrated in the graph have all grown between FY11 and FY16. However, the growth in refrigerators and air-conditioners has been the most prominent. In the more recent period, there is double-digit growth all around, except for the TV sets. During 11MFY17, production of deep freezers grew by 28 percent, refrigerators 24 percent; electric fans 21 percent, and air-conditioners 10 percent, on a year-on-year basis.

In tandem with growth in domestic retail, the production of major electronics items is expected to continue its recent growth run. The middle-class, both its existing members and aspirants, tend to drive the purchases of white goods and electronics. If the economic growth gathers pace, the resulting higher per capita income will push the sales of both lifestyle and convenience products. Already, there is an apparent proliferation of housing schemes in both major and small cities – a sign of upward mobility – that is also a driving factor in appliance sales.

While folks want comfortable lifestyles, not many households currently have that. As per Euro monitor, in 2016, mere 55 percent of households had a washing machine, 43 percent had a refrigerator, 20 percent had a microwave oven, and 16 percent had a deep freezer. There is obviously potential there, more so in rural areas where ownership of household durables is markedly lower than urban areas. Continued flows of remittances and growth in farming incomes are going to be driving forces for electronics sales. But who will feed all that demand? While almost all of the demand for electric fans and refrigerators is being met through local production, the same is not the case for air conditioners, LED TV sets, deep freezers, and washing machines. The domestic players are conscious of the need to invest in product design, functionality, and quality of service. But the price-conscious mass market doesn’t encourage them to really go the extra mile, thus hampering their ability to compete with the imported products.
Riaz Haq said…
Average number of adults per household in Pakistan 3.0 (out of 6.45) `vs India 2.5 (out of 4.9)



The average household wealth in Pakistan is $15,522 vs India $14,940

The median household wealth in Pakistan is $10,014 vs India $3,237

Credit Suisse Wealth Report 2017

India Average Wealth Per Capita $5,976 Gini 83% Household Wealth Up 9.9% since 2016

India Median Wealth Per Capita $1295

Pakistan Average Wealth Per Capita $5,174 Gini 52.6% Household Wealth Up 6.3% since 2016

Pakistan Median Wealth Per Capita $3,338

Riaz Haq said…
Monday, November 20, 2017. Credit Suisse Wealth Report 2017
Indian inequality higher than Pakistan, China, Bangladesh; 92% adults' net worth less than $10,000; of 0.5% plus $100,000


Giving a scary picture of inequalities in India, the recently-released “Global Wealth Report 2017”, published by Credit-Suisse, a Swiss multinational financial services holding company, headquartered in Zurich, has said that India’s 92% of adults “have net worth less than USD 10,000”, while “a small fraction of the population (just 0.5% of adults) has a net worth over USD 100,000.”
While the 0.5% adult population of India “translates into 4.2 million people” because of its huge population, the report says, “By our estimates, 1,820 adults have wealth over USD 50 million, and 760 have more than USD 100 million.”
A further breakup of wealth among the top echelons reveals that 10% of the adult population has 73.3% of wealth, 5% has 64.1% of wealth, and 1% has 45.1% of wealth.

In absolute numbers, the report says, as of mid-2017, 770,089,000 adult individuals have a wealth range of under USD 10,000, 60,116,000 have a wealth range between USD 10,000 and 100,000, 4,158,000 have wealth range between USD 100,000-1 million, and 245,000 individuals have wealth more than USD 1 million.

Pointing out that “while wealth has been rising in India, not everyone has shared in this growth”, the report’s data show that India’s Gini index – an internationally recognized, most commonly used measure of inequality, with 100% representing maximal inequality – is found to be 83%. By comparison, Pakistan’s Gini index is 52.6%, Bangladesh’s 57.9%, Sri Lanka’s 66.5%, Nepal’s 67.3%, and China’s 78.9%
Riaz Haq said…
Car sales up 20.4pc in six months


KARACHI: Sales of passenger cars rose 20.4 to 103,432 units in the first half of the current fiscal year of 2017/18, official data showed on Wednesday.

Car sales stood at 85,901 in the same period of last fiscal year, according to Pakistan Automotive Manufacturers Association (PAMA).

In December 2017, sale of cars fell to 16,159 units as against 17,233 units in the previous month and 14,024 units in the same month a year ago.

Topline Securities, in a report, said the decline was due to the year-end’s leaner period of auto sales.

A total of 47,087 cars of 1,300cc or above category were sold during the first half, up 5.92 percent over the same period a year earlier.

But, the sale in the category declined to 6,652 units in December 2017 as against 8,087 in November and 6,880 units in December 2016.

Arslan Hanif, an analyst at Arif Habib Limited attributed the decline to crackdown of Indus Motor Company and cancellation of pre-booked orders of cars due to excess premium charged by dealers.

Under the category of 1,000cc category, a total of 23,642 units of Suzuki Cultus and Suzuki WagonR were sold, up 61 percent against 14,669 units sold last year.

One analyst said there is a huge increase in 1,000cc cars, as both WagonR and new variant of Cultus saw an amazing success in the country during the period under review.

Dispatch of 1,000cc category cars exhibited an uptick due to a massive demand from Careem, Uber and other transportation businesses.

Sales of 800cc and below 1,000cc cars, Suzuki Mehran and Bolan, increased 22 percent to 32,703 units in July-December from 26,780 units in the corresponding period last year.

“We believe Pak Suzuki continued to be major beneficiary as majority of used-car imports fall under lower engine capacity segment,” Topline Securities added.

A total of 4,562 buses and trucks were sold in the six-month period, up 17.5 percent.

Sales of farm tractors grew 54.3 percent to 32,310 units during the period under review.

A total of 6,797 jeeps were sold during the July-December period, depicting manifold growth as compared to 205 units sold during the same period last year.

The hefty sales were visibly due to an introduction of Honda’s BR-V. Honda recorded sales of 5,159 units of its new edition during the first half.

Sale of pick-ups was recorded at 13,909 units during the six months as against 11,427 units sold in the corresponding period last year.

Pakistan Automotive Manufacturers Association data further showed that a total of 940,825 motorcycles and three-wheelers were sold during the period under review, up a 19 percent over the same period a year ago.
Riaz Haq said…
7,500 new #motorcycles hit roads daily in #Pakistan. Production reached 2.3 million motorcycles in 10 months. Up 22.34% in 4 months


KARACHI: Motorcycles production in Pakistan is reaching to its highest level with 2.3 million quantity of produced during the ten months of 2017 while average 7,408 new motorcycles hit roads daily in the country.
The production of motorcycles increased by 22.34 percent during the first four months of fiscal year 2017-18 (FY18), as compared to the corresponding period of last year, latest data of Pakistan Bureau of Statistics (PBS) revealed.

PBS’s latest data reveals that the motorcycle production including locally assembled Japanese brand and Chinese made imported motorcycles’ brand stood at 2251917 units in the first ten months (January-October) of 2017. It is to be noted that at least 2.5 million motorcycles were manufactured during past year while the number of motorcycles’ production in Pakistan has already crossed the 2 million mark in just ten months of this year.
It has been observed that in the absence of any public transport system in Pakistan, lower middle-income class of the country has been compelled to compromise their safety by choosing the two-wheelers as their conveyance.

Muhammad Zahid Iqbal Malik of Pakistan Bikers Club (PBC) said motorcycle assemblers in Pakistan produce low quality products just to maintain price stability. He said steady prices besides easy installment plans are the main reasons behind rapid growth of two wheelers in Pakistan.

He said rapid motorcycle production in Pakistan apparently portrays brighter picture but it is a harsh reality that among 2 millions motorcycles produced in 2017 we didn’t manufacture even a single bike here with 100% Pakistani parts.

“It is true that motorcycle industry is booming and providing opportunities for locals and supporting the economy. But Pakistan is still far behind from its neighbouring country as Indian company Hero started manufacturing with Honda Japan and now it has become a separate entity bigger than Honda”, he added.
Association of Pakistan Motorcycle Assemblers (APMA) Chairman Mohammad Sabir Shaikh said globally, there is an average life of a motorcycle, but in Pakistan with the nonexistence of any such law, the tax departments are allowed to collect lifetime tax at the time of registration of a new bike.
He further added that the situation is really alarming as the authorities don’t follow any standards for motorcycles’ registration which is making the motorcycle as the leading cause of fatalities.

He was off the view that the government should set the effective life limit of a motor cycle for tax reasons since the tax offices use 100 years as their average life at present. He suggests that the tax authorities should register a motorbike only for five years and after that period the registration of the motorbikes should be subjected to fitness tests.
Riaz Haq said…
Imports of used cars in Pakistan jump 70pc


KARACHI: Imports of used cars and minivans surged to 65,723 units in 2017, up almost 70 per cent from 38,676 units a year ago, latest data released by the auto industry shows.

The arrival of sport utility vehicles (SUVs) also increased 59pc to 7,758 units. Imports of pickups and vans registered a 9pc rise to 3,154 units.

The local industry maintains a record of each imported vehicle, whether new or old, through the Import General Manifest (IGM). Every imported car is logged in the customs’ IGM.

Toyota Vitz was most popular foreign vehicle in 2017

Toyota Vitz remained the most popular imported car in 2017. As many as 8,680 units arrived in 2017, up almost 40pc from a year ago. The volume of Daihatsu Mira swelled 73.1pc to 6,091 units.

Toyota Aqua imports climbed 96pc to 7,123 units from 3,622 units in 2016.

As many as 5,088 units of Suzuki Every were brought into Pakistan in 2017, up 14.6pc year-on-year. Imports of Daihatsu Hijet rose 34.5pc to 3,367 units.

The arrival of Suzuki Alto doubled to 4,158 units from 2,013 units a year ago. Suzuki WagonR imports surged 115pc to 3,574 units.

Imports of Honda Vezel and Toyota Land Cruiser stood 2,431 units and 3,301 units in 2017, up 57.5pc and 55.7pc, respectively, on an annual basis.

The overall volume of imported used vehicles grew 65pc to 76,635 units in 2017 from 46,500 units a year ago, data showed.

Low interest rates, increase in auto financing by banks and lifting of vehicles by investors for cab services like Careem and Uber boosted the imports of used cars as well as sales of locally assembled vehicles.

The government imposed regulatory duties on the purchase of foreign used vehicles in October, which largely failed to dent the overall annual import figures.

Sales of locally produced cars rose 20.4pc on a year-on-year basis to 103,432 units in July-December.

According to the Pakistan Bureau of Statistics, overall imports of cars increased 64pc to $276 million in July-December.

Pakistan Association of Automotive Parts and Accessories Manufacturers’ former chairman Aamir Allawala said the local vending industry lost estimated revenue of Rs23 billion last year.

The estimate is based on taking the average local content per vehicle of Rs300,000 on imports of 76,645 units in 2017. This is in contrast to a loss of Rs14bn in 2016 with imports of 46,500 vehicles.

He said imports of used cars were the biggest impediment to investment by existing assemblers, new entrants and part makers.

He said the government has modified the procedure for the payment of duties and taxes to curb imports of used vehicles.

“Time has come for the existing players to make prompt investment in capacity expansion, improve localisation, introduce new models and reduce delivery time to eliminate the menace of premium,” he said, adding that an increase in production will boost tax revenue and create jobs.

In the near future, Hyundai, Kia and Renault will set up plants in the country.
Riaz Haq said…
Why #India’s '#Modi-fied' #GDP Math Lacks Credibility: How can #India's gdp growth rate be faster under #Modi government when its investment-to-gdp is down from 38% under UPA #Manmohansingh government to 30.3% now? How's capital-to-output ratio way up? https://thewire.in/political-economy/why-indias-new-gdp-math-lacks-credibility/amp/

India’s back-series GDP (gross domestic product) data, released by the NITI Aayog just four months before the 2019 general elections, turns the basic laws of macroeconomics on their head.

Here’s one that is most intriguing. The data shows lower GDP growth during the UPA years, which is when the gross investment to GDP ratio was peaking at 38%. And conversely, it shows higher GDP figures during the four years of Modi-led NDA-II government, which is when the gross investment to GDP ratio was at its lowest, at 30.3%.

Economic theory has always held that higher investments lead to higher GDP. So how can GDP grow faster when the investment-to-GDP ratio has fallen?

Technically, the only circumstance in which this can happen is when the economy’s productivity or the ‘Incremental Capital Output Ratio’ (ICOR) improves equally dramatically. Simply put, it means the economy generates a lot more output for the same amount of capital employed. There is no sign of that happening during the Modi government’s four years in which productivity was in fact negatively impacted by the twin shocks of demonetisation and messy GST implementation. Besides this, much of the NDA-II period has also seen the largest quantum ever of unproductive assets locked up in the form of non-performing assets (NPAs). Banks are not lending because of unresolved bad loans. How can productivity surge in such circumstances?

Says Mahesh Vyas, CEO of the Centre for Monitoring Indian Economy, a reputed private data research firm, “The new GDP back series numbers show India to be a magical economy where when the investment ratio drops sharply, the economy accelerates sharply. During the period (2007-08 to 2010-11) when the investment to GDP ratio was peaking at average 37.4% the average GDP growth was 6.7%. And in the recent four years (2014-15 to 2017-18) when the investment ratio was down to 30.3% the economy was sailing at 7.2%. Is this productivity magic?” There is really no answer to this fundamental questIon.

Former head of the Central Statistics Office (CSO) and chairman of the National Statistical Commission, Pronab Sen, is known to have a great feel for data and has been one of India’s foremost economists and chief statisticians. Sen has been critical of the manner in which the back-series data was essentially released by NITI Aayog and not by the CSO alone, as has been the practice in the past. This is tantamount to politicising institutions which deal with national statistics.

That apart, Sen also agrees that the back-series data does not pass the basic smell test linked to ground realities. While better productivity can theoretically produce higher output with the same quantum of capital or labour, he argues that the period of 2005-2012 also saw a big communication revolution in India due to mobile penetration. Consequently, it would be difficult to argue lower productivity in the UPA era. The service sector overall – whether communications, banking, real estate or hotels – clearly boomed during the UPA period.

Significantly, average GDP growth has been lowered to 6.7% during the UPA period in the new series, from over 8% in the earlier series, largely based on adjusting the service sector output (which was the biggest contributor to GDP) to lower levels.

There are other basic common sense tests which the new series fails. For instance, UPA-era growth is supposed to be lower even though the country’s exports were booming at 20%-plus, bank credit to industry grew at over 20% and the corporate earnings of the top 1,100 companies grew at at over 20%.
Riaz Haq said…
Registered #vehicles in #Pakistan up 9.6% to 23,588,268 in 2018. #Motorcycles saw biggest increase of 11.5% reaching 17,465,880. #Cars, jeeps and station wagons rose 5.3% reaching 3,043,593. #Trucks surged to 277,416 and #buses 236,461 https://profit.pakistantoday.com.pk/2019/06/16/registered-vehicles-in-pakistan-increased-by-9-6-in-2018/ via @Profitpk

The registered vehicles in the country increased by 9.6 per cent in 2018 as the number of vehicles have reached 23,588,268 in the last year compared to 21,506,641 vehicles in 2017, according to the data of Pakistan Bureau of Statistics (PBS).

The data revealed that two-wheel registered motor bikes witnessed highest increase during the said period showing a surge in their registration of 11.5 percent. Their number has jumped to 17,465,880 from 15,664,098 in the previous year.

Similarly, motor cars, jeeps and station wagons have grown by 5.3 percent reaching to 3,043,593 from 2,889,500 during the period of one year. However, the growth in the registration of three-wheel motor cycles, trucks, buses, taxis and others vehicles showed normal increase.

The number of trucks has surged to 277,416 from 272,934 in one year time period. The number of buses has also risen to 236,461 from 233,884, the data showed.
Riaz Haq said…
#Pakistan Home #Appliance Maker Dawlance Manufactures Its 10 Millionth Unit. Company makes #Refrigerators, #Freezers, #AirConditioners, #Microwave Ovens, Built-in #Ovens, #WashingMachines, Water Dispensers, #Dishwashers, and small #kitchen appliances. https://www.oyeyeah.com/news/dawlance-manufactures-its-10-millionth-unit/

The market-leader in Pakistan’s Consumer-Electronics and Home Appliances market – Dawlance has now achieved another huge milestone, by manufacturing its Ten Millionth unit. Completing its 40 years of excellence, this enterprise is a fully owned subsidiary of Arçelik A.S. – The largest Turkish enterprise and the third-largest manufacturer in Europe.

The Chief Executive Officer of Dawlance – Mr. Umar Ahsan Khan stated that: “Dawlance is the biggest Turkish investment in the economy of Pakistan. Producing its 10 millionth Unit is the strongest evidence of the brand’s reliability. It is an unforgettable moment for us as we enter this new era of consumers’ confidence. The company is thankful to its over 4000 employees, our consumers, stakeholders, distributers, and dealers all over Pakistan, along with everyone else who contributed to the success and growth of the company.”

The Head of Production at Dawlance – Mr. Ameen Ahmed expressed his delight and said; ”We have come a long way since the company’s humble beginning, back in 1980, when a small assembly plant was established in Hyderabad. Today, the company has grown tremendously, operating 3 large-scale manufacturing units in Pakistan. The 10 millionth product is a testament to our passion and commitment, to strengthen Pakistan’s industrial-base and economy.”

Through this resourceful collaboration, the most reliable brand has been established, to offer the highest quality electronics and services to Pakistani consumers. Our most innovative technologies also promise the conservation of energy. Being a socially responsible organization, it generously contributes towards credible initiatives for community-development and other healthy socio-cultural activities, to create more economic opportunities and empower its consumers.

It caters to consumers’ 3 different functions; Food Care, Fabric Care and Home Care with a wide range of appliances including; Refrigerators, Freezers, Air-Conditioners, Microwave Ovens, Built-in Ovens, Hoods and Hobs, Washing Machines, Water Dispensers, Dishwashers, and small kitchen appliances. Consumers can enjoy the ‘Grand Warranty’ on all Dawlance products sold all over Pakistan, without paying additional costs or any registration process.

All Dawlance Refrigerators and Freezers come with a 12 Years Compressor Warranty (including Inverter and non-inverter technology). All its new models of Washing Machines are covered by a 10 Years Motor Warranty.

With the continued focus on customer care and after-sales service, it always exceeds the customers’ expectations. With creating newer technologies, every employee is inspired to ensure compliance with global standards and best-practices at every level.

A nation-wide ‘After Sales network’ provides 24/7 Customer-Care, while Technical-Collaborations with Arçelik’s global plants in Turkey, Russia, Romania, Thailand, and South Africa are also nurturing expertise at Dawlance.
Riaz Haq said…
Sensitivity of Multidimensional Poverty Index in Pakistan
Farzana Naheed Khan
and Shaista Akram


The study estimates multidimentional poverty in Pakistan following Alkire-Foster methodology.
The analysis is based on Pakistan Social and Living Standard Measurement Survey 2004-05 and
2014-15. The study adopts expert opinion weights, frequency-based weights and equal weights for
the provision of estimates of MPI at national and provincial levels. The results show that the
estimates of MPI range from 14% to 20% at national level and these estimates are quite sensitive
to the choice of weights. Whereas, equal weights always underestimate the magnitude of poverty.
Moreover, the inter-temporal analysis of poverty reveals that the intensity of poverty has lower
contribution in the reduction of multidimensional poverty in Pakistan. Therefore, the deprived
regions of the country should be focused separately (especially the deprived districts of
Balochistan) to target poverty. Besides, the regional allocation of resources can be made
according to the intensity of poverty. The study concludes that the measurement of poverty is a
complex phenomenon and it is quite sensitive to the choice of weights. So, the researcher should
be careful about the choice of weighting scheme while providing estimates of multidimensional
The Table 2 shows the estimates of MPI for the PSLM 2004-05 and PSLM 2014-15. The study
has adopted expert opinion weights for the computation of MPI while these weights are taken from
Pakistan Economic Survey (2016).
a The multidimensional poverty estimates show that 28.8% of
the population was multidimensionally poor according to the PSLM 2004-05 while 19% of the
population is multidimensionally poor according to the PSLM 2014-15. The Table 2 also shows
that rural poverty is a critical issue in Pakistan as reported MPI is higher for rural areas of Pakistan
as compared to the urban areas of Pakistan for both data sets. This result is consistent with the
earlier poverty studies for Pakistan (Naveed and Ali, 2012; Sallauddin and Zaman, 2012; Pakistan
Economic Survey, 2016).
Riaz Haq said…
Bangladesh, Pakistan and Sri Lanka, all of which suffered from widening current account deficits in 2018, witnessed a reduction in their current account deficits – a much needed boost to macroeconomic stability. Vietnam on the other hand continues to post a current account surplus thanks to rising exports.



Importantly, Asian frontier markets remain under-researched and this trend is continuing given the soft sentiment towards frontier markets. The table below shows the number of sell side analysts covering well-established blue-chip companies within our universe relative to larger emerging markets. In the current environment, many of these companies besides being under-researched are also now being ignored by a large set of investors due to the current sentiment towards frontier markets. The result is that there are a number of bargains available. Furthermore, in line with our policy of being on the ground for research, our team conducted visits in 2019 to Bangladesh, Cambodia, Iraq, Jordan, Kazakhstan, Mongolia, Myanmar, Oman, Pakistan, Sri Lanka, Uzbekistan, and Vietnam. Through this, our team carried out close to 200 one-to-one meetings with company management teams.

Sentiment towards Pakistan remained negative for most of 2019 and the fund rightly had a low weight to the country for most of the year. The Pakistan KSE100 Index had lost −29.5% in USD terms until the end of August 2019. However, this drawdown had factored in most of the negatives such as the currency depreciation, higher interest rates and slower economic growth. With the International Monetary Fund (IMF) deal coming through in the summer, sentiment began to change as it gave investors more confidence on anticipated reforms while the weakened currency and high interest rates brought down imports significantly, helping to lead to a large reduction in the current account deficit. In addition to this, on the fiscal side as well the government was able to reduce its primary deficit and the State Bank of Pakistan kept interest rates unchanged in its policy meetings in September and November 2019 after raising rates aggressively since the beginning of 2018.

With an improving macro environment, the fund began increasing its weight to Pakistan from October 2019 onward as we believe that earnings for most sectors are close to bottoming, if they haven’t already, and the State Bank of Pakistan could begin cutting interest rates from the second quarter of 2020. We therefore believe that cyclical stocks in the auto and cement sectors can do well over the next year as their valuations have corrected significantly over the past two years while their profit margins are also bottoming. The fund has increased its exposure to Pakistani auto and cement companies and this has already helped with performance as the KSE100 Index has rallied by 29% since the end of September 2019 making Pakistan one of the best performing markets globally in the past three months. The fund’s Pakistani holdings have returned 31% in the same time period.

The important point to remember is Pakistan has a population of 200 mln people with very favorable demographics while the stock exchange offers a number of well-established consumption focused names in the auto, consumer staples and pharmaceutical space and more importantly valuations remain very attractive despite the recent run-up in the market.

Riaz Haq said…
Giving a contrasting view, Business Head B2B Solutions, LG Pakistan, Syed Farrukh Raza Alam said sales in July-August of AC, washing machines, TVs, double door fridge, etc were better than last year same period despite 15-20 per cent increase in prices in the last one year. His sales of invertor ACs were also brisk.


According to figures of Pakistan Bureau of Statistics (PBS), production of refrigerators plunged by 24pc to 1.093 million units in FY19 while deep freezer sales soared by 39pc to 186,545 units in FY19.

A sales representative in Karachi of a Lahore based domestic appliances making company said the overall sales of domestic appliances shrank by 20-25pc in the last two months due to high prices.


According to official figures, overall local production of TV sets in FY19 rose by 3.3pc to 380,559 units.

President Karachi Electronic Dealers Association (KEDA), Mohammad Rizwan Irfan said deep freezers and fridge sales recorded steep fall of 50pc in the last two months as prices rose by 15-20pc in the last one year while low slaughtering of sacrificial animals also kept buyers away from the market. He said sale of cooling gadgets were also subdued despite marriage season that runs betweenr Eid and 1st Muharram.

He said CNIC condition and Sales Tax registration process had already caused anxiety among the dealers and manufacturers. Rizwan said many companies had suspended providing domestic appliances after various taxation measures, while many dealers are also not income tax filers.
Riaz Haq said…
1.426 million refrigerators sold in Pakistan in 2016, up from 1.348 million in 2015 and 1.31 million in 2014

Dawlance leads with 465,000, followed by Pak Elektron Limited 421,000, Haier 280,000 , Orient 220,000 and others 40,000

Riaz Haq said…
52% of households now own a refrigerator in Pakistan

Interesting that KP Urban households report highest proportion among all provincial urban vs rural comparison

Riaz Haq said…
Every one has noticed motorcycles on roads increase enormously over the past 1.5 decade This is because every second household has a motorcycle! In Punjab Urban almost 2 in 3 HHS own one ! In absence of public transport Pakistanis already found a solution ?


Riaz Haq said…
India’s middle-class households are culling their armies of domestic helpers amid the Covid-19 pandemic, eliminating a crucial source of jobs and spurring an appliance-buying binge.


Ila Rallan used to have five different home assistants troop through her apartment in Mumbai every day: one cook, three cleaners and one nanny. At the beginning of India’s lockdown, they all returned to their villages. Additionally, her building wouldn’t let in outsiders.

For the first time in her life, she had to do everything around the house without the help of staff.

Other countries have seen a surge in home-improvement spending by people stuck at home. In the U.S., it has led to shortages in refrigerators, kitchen mixers and washing machines. In India, however, this spending is putting people out of work.

Sarita, a maid and cook in Delhi who goes by one name, had worked for the same family for 10 years. When Covid-19 hit, they reduced her salary for two months and then laid her off, even as the lockdown lifted. They were scared to let her into the house. Her former boss now has machines to do the dishes and clean the floor, she says.

“This disease has gone after our jobs as well as our health,” she said. “Machines are replacing humans and walking away with our salaries.”

India has one of the worst coronavirus outbreaks in the world. With more than 8.5 million recorded infections in the South Asian nation, only the U.S. has reported more cases. The country went into the world’s largest lockdown in March and stayed shut for two months. It has since been gradually opening, but people are still restricting their own movements.

The more-affluent families of the country’s middle class have emerged from this forced hibernation more cautious, more independent and more likely to spend on labor-saving equipment they didn’t think they needed before.

Riaz Haq said…
#Pakistan: Pak Elektron’s profits soar. Home #appliance sales to grow 20% in Fiscal 2021. #Refrigerator sales have grown 12% a year over last 3 years. #AirConditioner sales have shown a 5-year CAGR of 64% #middleclass #urbanization Profit by Pakistan Today https://profit.pakistantoday.com.pk/2020/08/01/as-temperatures-soar-so-do-pak-elektrons-profits/#.X64WQvmj29Q.twitter

First, let us look at appliances. Overall, this segment has done very well: between 2015 and 2018, the division recorded an annual growth of 18%. However, in the last one year, appliance sales were somewhat subdued. The imposition of an CNIC condition on business to business transactions impacted the market, and the Covid-19 related lockdown for between March and May in 2020 did not help (who will buy a new deep freezer in the middle of a pandemic?).

However, during the same period, the interest rate was cut by 625 basis points, from 13.25% to 7%. According to historical data, consumer financing for appliances picks up around six months after a policy rate cut, which bodes well for PEL. It is also good news for the company’s financials, since the company has a debt-to-equity ratio of 57%. The fall in interest rates should translate to savings of Rs600 million in interest costs.

In addition, farmers have more liquidy these days, thanks to a spate of helpful government measures: a cut in the Gas Infrastructure Development Cess (GIDC) on urea bags, a subsidy for fertilizers, a rise in the wheat support price, and distribution of funds under the Ehsaas program. All of this means more cahs flows for farmers on a whole, and more money to spend on nice appliances.

This pent up demand is why Kumar expects sales of appliances to grow by 20% year-on-year to 414,999 units in 2021, compared to 345,832 units in 2020.

And exactly which two appliances are growing? Well, refrigerator sales of the company have grown at an annual rate of 12% over the last three years. That being said the Covid-19 lockdown and higher interest rates caused refrigerator sales to decline 19% year-on-year in the first quarter of 2020, and is expected to decline by 25% year-on-year in the second quarter. And yet, since the lockdown has been lifted, Kumar expected sales to pick up and for the remaining two quarters to show 15% year-on-year growth.

In ACs, the company holds only a 10% market share – but AC sales have shown a five-year compound annualised growth rate (CAGR) of 64%. Kumar expects 15% year-on-year growth during the second half of 2020, after a subdued first half (again, because of Covid-19 lockdowns).

“During 2021, we estimate ACs sales to grow by 20% YoY to 90,997 units compared to 75,831 units in 2020,” notes Kumar.

PEL is also benefiting from slew of factors outside of its control. Pakistan is becoming more urbanized (at 43% in 2019, compared to just 33% in the year 2000. Between 2012 and 2020, per capita income and remittances have grown at CAGRs of 7% and 6% respectively. The central bank has made it mandatory for banks to allocate 5% of their private sector advances for the construction sector. And finally, Pakistan has grown warmer, experiencing a 0.6 degree Celsisu jump in the last century.

So: a more urban population, moving into brand new homes, with money in their pockets and finding that their fans just will not cut it in this heat: this means a greater demand for electrical goods in the future.

It is not just PEL that has picked up on this trend: Panasonic Marketing Middle East & Africa has partnered with PEL on high-end goods. So far, high-end ACs have been introduced. But growing incomes, and rising urbanization, means that Panasonic thinks that there will be more ‘high end’ customers to cater to in the future.

Now, to the second segment: power supplies. PEL dominates in the power transformer sector, holding an 81% share in the market after Siemens exited. Similarly, it holds the highest share in the distribution transformers market, at 31%.

Riaz Haq said…
The registered vehicles in the country increased by 9.6 per cent in 2018 as the number of vehicles have reached 23,588,268 in the last year compared to 21,506,641 vehicles in 2017, according to the data of Pakistan Bureau of Statistics (PBS).


The data revealed that two-wheel registered motor bikes witnessed highest increase during the said period showing a surge in their registration of 11.5 percent. Their number has jumped to 17,465,880 from 15,664,098 in the previous year.

Similarly, motor cars, jeeps and station wagons have grown by 5.3 percent reaching to 3,043,593 from 2,889,500 during the period of one year. However, the growth in the registration of three-wheel motor cycles, trucks, buses, taxis and others vehicles showed normal increase.

The number of trucks has surged to 277,416 from 272,934 in one year time period. The number of buses has also risen to 236,461 from 233,884, the data showed.

Popular posts from this blog

Turkish-Born Muslim Scientists Behind Pfizer's Successful COVID19 Vaccine

Karachi-born NED University Alum Leads Mercedes Entry into Electric Vehicles Market

Pakistani Women's Growing Particpation in Workforce