Please solve only part D of this question Read the given case study and answer the questions given below,Pakistan ranked 8th in size of trade deficitThe tenure of the previous government, from 2013 to 2018, witnessed a skyrocketing currentaccount deficit as it increased from $2.5 billion in FY13 to $18.9 billion in FY18.The major driver was the trade deficit, which widened from $19.2 billion in 2012 to $35.6billion in 2017, according to data extracted from the ITC's Trademap.org. Imports increasedfrom $43.8 billion in 2012 to S57.4 billion in 2017 and exports decreased from S24.6 billion in2012 to $21.9 billion in 2017.Between July 2014 and June 2015, REER had increased by 8.83%. It increased by 5.54% inthe prior fiscal year, FY14. In simpler terms, the rupee was kept above its equilibrium valuebetween June 2013 and June 2018, making it cheaper to purchase gaods from other countries.Furthermore, exporters lost their competitiveness against foreign competitors in the globalmarket.Today, with the rupee closer to its equilibrium value, exports have increased. This haspositively impacted the trade balance, alleviating some of the concerns regarding theburgeoning current account deficit.First, let us examine how the severe trade deficit for Pakistan, as reported by Trademap.org, isrelative to other countries experiencing large trade gaps. With a deficit of more than $35billion, Pakistan was ranked eighth in terms of the size of the trade deficit in 2017.The trade deficit of Pakistan exceeds the total value of its exports. Even though the tradedeficit was skyrocketing, the exports and imports (goods and services) as a percentage of GDP,as reported in the World Development Indicators by the World Bank, was the lowest forPakistan in the region. Even with relatively higher levels of imports, the lack of exports hasturned Pakistan into a relatively closed economy within the region.The lack of export growth to accompany the high rate of import growth is a serious cause forconcern. Pakistan had a trade deficit of $13.9 billion with China and $6.7 billion with the UAEin 2017. Moreover, it had a trade deficit of more than $1 billiom with nine countries includingSaudi Arabia, India, Thailand and Japan. In 2013, the trade deficit with China was $4 billion.Hence, the increase in CPEC-related imports was by far the most important factor in the risingtrade deficit.Trade deficit shrinks as exports grow faster than importsExports of goxds and services as a percentage of GDP for Pakistan have declined from 12.4%in 2012 to 8.2% in 2017, the lowest amongst major economies in the South Asian region.Exports of textile products, which have the largest share, have hovered around $13 billion.Bangladesh and Vietnam increased their textile exports by more than 70% during the sametime period.PART II- SUBJECTIVEPage 4 of 6Student Name:Student ID:Both Vietnam and Bangladesh imported textile machinery at 145% more value than that for thetextile machinery imported by Pakistan in 2017. Since 2010, imports of textile machinery intoPakistan have remained stagnant.It is important to note that Pakistan was one of the top five importers of textile machinery in2005. Bangladesh and Vietnam import primarily knitting machinery, while Pakistan importsmostly spinning machinery involved in upstream production.'Fourth industrial revolution to reshape govt, trade and health'As Pakistan is a large cotton-producing country, investments in upstream textile production,such as cotton yam, is likely. However, there is an urgent need to increase investments indownstream high value-added exports in the textile industry, such as garments and otherfinished products. The increase in exports in FY18 was primarily due to the utilisation of idlecapacity in the textile sector.The United Nations Conference on Trade and Development's (Unctad) trade and developmentreport 2018 predicts higher levels of uncertainty in global trade may disrupt trade volumes.Higher levels of tariffs are likely to have consequences for income distribution and aggregatedemand.However, Pakistan can seek to attract foreign investment that is likely to be relocated fromsuch countries. In summary, the government must adopt the right set of policies to attractinvestment and tackle the current account deficit.(Published by the Express Tribune, 29 October, 2018)Answer the following questions after reading the case given above,A. What are the likely reasons of large trade deficit in Pakistan?B. How would you compare the trade of Pakistan with other countries in the region?C. What measures can be taken by the government to correct the trade deficit?D. Is Pakistan a closed economy in terms of trade? Comment

A.Likely reasons of Pakistans trade deficit would be imports greater than exports and depreciated…

Answered: Please solve only part D of this…

Business

Economics

Please solve only part D of this question

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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