Macro-economic factors

Topics: Economics, Macroeconomics, Inflation Pages: 3 (722 words) Published: October 15, 2014
Macro-economic factors:

There are a lot of macro environmental factors that affect Telfin performance though emphasize has been given on the important factors. Economic factors like current and anticipated economic growth, interest rate, inflation, cost of labor, disposable income and distribution of income etc collectively comprise economic environment.

Current and projected economic conditions: In recent years Pakistan’s economic figures were indicating very impressive and promising consequences and infact these all were proven to be wrong. A number of reasons are behind this but the most important are the economic policies which were not integrated with political environment in an apt manner. Secondly, terrorism has stooped down our economy in a very negative manner. Therefore because of these reasons Pakistan current and anticipated economic conditions aren’t in Telfin favor. Exchange Rate: Telfin is directly affected by fluctuation of exchange rates as investment is being done in USD, all suppliers have to be paid in USD and being subsidiary of Vimplecom, Shareholder calculations are in USD while revenue is generated in local currency (PKR). Due to depreciated PKR every year when revenue is calculated in USD it is minimized due to negative exchange rate effect. Fuel Prices: Telfin is the one of the biggest customer of PSO (Pakistan State Oil), due to energy crisis in Pakistan and being the largest on coverage for the services, more than 5000 cell sites have to be energized to keep the network running. Taxtation: Govt has applied additional 5% tax on the top up so subscribers get 5% less balance on recharge but as an impact it has been seen that subscribers have reduced the usage as recharge revenue has decreased and 5% reduction is from Telfin revenue. Inflation and interest rate: interest rate and inflation both are elevated in Pakistan. In most of countries it is very much natural that once economic conditions are bad central banks reduces...
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