Interesting perspective on this article on how Khan has inducted the same political class inspite of his rhetoric against them.
https://www.dawn.com/news/1661635
https://www.dawn.com/news/1661635
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Contact the PP Team
How did Pakistan's economy perform during Imran Khan's era?
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Bewal Express
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PK textiles is projected hit the $20bn exports this year. This sector was decline until IK and the manufacturers started to work together and came up with a policy. IA it will grow even more and hit the 25bn in the coming years. To put it in perspective, our total exports under the Nooras was 23bn.
https://www.dawn.com/news/1662021
https://www.dawn.com/news/1662021
The major reason for the increase in textile exports is simply the cost advantage Pakistani manufacturers have received due to currency devaluation. Manufacturing orders go to the cheapest producer of acceptable quality.
Unfortunately textiles are not the solution for Pakistan's economic woes. Textiles are a commodity item, and there are many other countries like Bangladesh, Vietnam, India, China etc. competing to produce textiles for the Western nations. At most the increase in textile exports will be around $10 billion, far short of the amount necessary to close the gap with imports.
Pakistan needs modern industries and possibly tourism to obtain the foreign exchange earnings needed for macroeconomic stability.
Please don't start mumbling something about LNG pricing.
Pakistan, Pakistani PM and most of the people of Pakistan are fully aware of the facts that you have stated.
Implementation of those facts does not happen over night nor in one term of any elected government tenure. It takes years not just 3 years.
No one on this forum, nor the Pakistani PM, has claimed improving textile to be an ultimate solution for Pakistan's economic woes. Only your comments, make it seem as if Pakistani are claiming it to be.
Yes, but one can judge if progress is being made. It is not. FDI is falling. Western multinationals are not showing any significant interest in setting up new manufacturing or services in Pakistan. Pakistan's reputation as a terrorist harboring country has been strengthened by Pakistan's support for the Taliban which killed thousands of US soldiers.
https://www.nytimes.com/2021/08/26/world/asia/afghanistan-pakistan-taliban.html
The West is not going to make Pakistan an economic partner if Pakistan keeps following IK's direction. Things have been going backwards under IK.
The post I was replying to was expressing optimism as textile exports were increasing (while also claiming it happened due to IK). I was merely pointing out that modern industries and not textiles is the answer.
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Answer, which no one can deny is, modern industries. But enhancing already functioning exports is a sign of improvement and should not be belittled.
Pakistan had no option but to secure it's western border, which Pakistan has done, as any other nation on this planet would have, that was the primary objective and Pak has done that well.
Narrative of Pakistan as a terrorist harboring nation is predominately an Indian narrative, sold to Indian by India's politician. Taliban were partnered in negotiating the exit before it took over the Afghanistan, matter of fact, Taliban were the one who protected the American soldiers against ISIS during their exit.
Unless and until, no terrorist attack on western territories is attempted from Afghanistan then The West would not care who is in power in Afghanistan but it would also be foolish to deny that The West would not want to give China easy excess to the central Asia, India has similar interest.
It is a matter of time, and the time will come sooner than later, where Foreign interest will increase, at this point, the priority is and will remain to secure the borders, and as the borders are secure, stability and investment will follow.
IK direction is simple, "we want to be equal partner", if you wish, then we will welcome, do not wish to be hired gun anymore, what is wrong with that? As a Pakistani, I find it rather admirable, because in a long term it will serve Pakistan than to obtain a short term monetary benefits.
Pakistan, under IK government, within it's capacity, has done exceptionally well with FATF requirement despite it being used as political tool.
Take off your blinders and get over your India obsession. Indians didn't convince the West that OBL was in Abbottabad. Indians didn't convince the West that Haqqanis who killed thousands of US soldier were supported by Pakistan (the article I linked to was from New York Times). Indians didn't get IK to say the Taliban have "broken the chains of slavery". You can keep blaming India for Pakistan's negative perception but that won't help you get investment from Western multinationals (which also increasingly have Indian CEOs).
Counts for little apparently, Biden won't even take a phone call from Imran Khan.
"Pakistan’s security adviser complains Joe Biden has not called Imran Khan"
https://www.ft.com/content/f3d50eb9-5b2f-4472-ad7e-1a216e8e9ae1
The US lost interest in Afghanistan in the 1990s after the Soviets exited, and got it back after 9/11. They may get interested again if another major terrorist attack originates from there, but this time they probably don't do a ground invasion but will bomb the Taliban from the air to punish them.
IK's equal partnership includes supporting the Taliban, abusing Modi, praising the Chinese Communist Party that is currently committing a Uyghur genocide, making no effort to get the Pakistani Army out of the economy etc. He is welcome to behave like this, but he should forget about Western investment to modernize the Pakistani economy.
FATF is a political tool, though the West may not say so. The West doesn't care about this deception, just like it believes Pakistan was being deceptive in providing support to the Taliban/Haqqanis. The FATF is one way to punish Pakistan economically. The other way simply is individual Western firms deciding that they have better options than Pakistan for investing their money.
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I see, you wish to convert this discussion into point scoring, neither have time for that nor patience
Almost every point you have raised about Pakistan and terrorism reflect back to what one constantly hear on India RSS/BJP controlled mainstream media.
Have a good day!!
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ISLAMABAD: The Pakistani rupee's value against the US dollar has fallen by 30.5% during the incumbent PTI-led government's tenure, as per a report in The News.
The rupee witnessed massive depreciation from Rs123 against the US dollar in August 2018 to Rs177 against the US dollar in December 2021, over the last 40 months. This makes it one of the highest devaluations of the currency in the country’s history.
The only other higher devaluation occurred when Dhaka fell and Pakistan’s currency was devalued by 58% from Rs4.60 to Rs11.10 against the US dollar in 1971-72.
Many independent economists argue that this recent devaluation of the currency was dictated by the IMF through prior actions and it has nothing to do with macroeconomic fundamentals.
Dr Ashfaque Hassan Khan, a former economic adviser, said that there was a complete breakdown of economic policymaking as the country’s fiscal policy had become subservient to monetary and exchange rate policies. He said that the monetary tightening and exchange rate depreciation resulted in higher inflation, public debt and debt servicing. The empirical evidence showed that the 1% monetary tightening hiked the inflationary pressure by 1.3% in Pakistan's case.
Experts say this massive devaluation of currency under the PTI government fueled inflationary pressures, adding that two major factors contributed to the price hike. First, the prices of food and commodities, as well as fuel prices, skyrocketed in the international market, and second, the depreciation of the exchange rate by 30.5% also led to higher inflation.
Some studies conducted by economists suggest that 10% devaluation of the currency raised the Consumer Price Index (CPI)-based inflation by 0.6%. As a result, the 30.5% depreciation resulted in increasing inflationary pressures by approximately 2%. This indicates that from the inflation standing at 11.5% on a monthly basis, nearly 2% comes through depreciation of the exchange rate.
An analysis of regional currencies versus the US dollar shows that the Pakistani currency experienced massive depreciation compared to others.
The Indian rupee stood at 75.39 against a US dollar. The Indian rupee stood at Rs70.09 against the US dollar in 2018, Rs73.66 in December 2019, Rs74.53 in March 2020 and Rs74.57 in April 2021.
In the case of Bangladesh, the Bangladeshi Taka stood at 85.76 against the US dollar and it hovered around 84 to 85.9 on average over the last two years.
Meanwhile, the Pakistani rupee continued to fall in value and stood at Rs177 against a US dollar in December 2021. It depreciated sharply from Rs123 against to Rs177 against a dollar over the last three years and four months.
Rupee and Instability
During the Musharraf-Shaukat Aziz regime between 1999 and 2007, the country’s currency remained largely stable and hovered around Rs60 against a US dollar. When the PPP-led regime came to power in 2008, the rupee depreciated as a result of a rising current account deficit and slid to Rs80 just in a few months.
Then, the rupee further adjusted against the dollar in a gradual manner after Pakistan joined the IMF program and remained around Rs90 against the US dollar from 2008 to 2013. In June 2013, the currency stood at Rs98.5 against the US dollar.
Then, the PMLN came to power in 2013. In November 2013, the Pakistani currency stood at Rs107.5 against the US dollar. Former finance minister Ishaq Dar’s policies brought the rupee down to an average rate of Rs98 against the US dollar in June 2014.
The Pakistani rupee remained stable at Rs100 in August 2014 while it adjusted slightly and settled at Rs105 against the US dollar in 2015-16 and 2016-17. Then, former finance minister Miftah Ismail allowed adjustment of the rupee against the dollar and it nosedived to Rs118 against US dollar in June 2018.
The rupee continued to slide during the interim rule of a caretaker government. However, when the PTI-led regime joined the government in August 2018, the rupee stood at Rs123 against the US dollar.
Then, Pakistan joined the IMF programmer and the rupee on average further depreciated and stood at Rs155 against the US dollar in June 2019. Till April 2020, the rupee continued to depreciate to Rs164 against the US dollar. In August 2020, the rupee touched Rs167.7 against the US dollar.
For a brief period, till April 2021, the rupee strengthened and remained on average at Rs152 against the US dollar. Since April 2021, however, the Pakistani currency witnessed a fresh wave of depreciation as the rupee on average touched Rs156 against the US dollar in June 2021, Rs168 in September 2021 and Rs170 in November 2021. In December 2021, the rupee crossed Rs177 against US dollar.
Inflation
On average, the CPI-based inflation has hovered around 8.2% between 1991 and 2020-21. However, now the CPI-based inflation has crossed double-digits and touched 11.53% in November 2021. There are other factors fueling higher inflation but the massive devaluation of the rupee also played a key role in the surge in prices over the past few months.
Economist Dr Zafar Mahmood said that the increased foreign exchange reserves help countries to maneuver, but with limited reserves, there is less room a country to stabilise its currency. Pakistan needs to build up its foreign currency reserves with non-debt-creating inflows such as exports, remittances, and foreign investments.
Sajid Amin Javed, an economist from SDPI, said that the depreciation of the currency over the last three years had actually accumulated in the last eight years because the value of the rupee was artificially raised.
He said if data of the past decade was analysed, it would show that India and Bangladesh had allowed depreciation when it was required. If data from 2016 to 2018 was analysed, it would show that Pakistan’s current account deficit worsened but the rupee remained stable; while in India there was a lesser current account deficit but the Indian rupee depreciated from Rs63 to Rs71 against the US dollar.
He said Pakistan kept its rupee on the higher side and so accumulated depreciation occurred. He termed this phenomenon as “forced depreciation” as the foreign currency reserves depleted and the current account deficit widened. He said the events in Afghanistan also added pressure on Pakistan’s exchange rate.
Pakistan, he said, joined the IMF programme so it was left with no other option but to ensure implementation on the forced depreciation. “The main problem lies with our policies as it also triggers panic and uncertainty,” he added.
GEO
The rupee witnessed massive depreciation from Rs123 against the US dollar in August 2018 to Rs177 against the US dollar in December 2021, over the last 40 months. This makes it one of the highest devaluations of the currency in the country’s history.
The only other higher devaluation occurred when Dhaka fell and Pakistan’s currency was devalued by 58% from Rs4.60 to Rs11.10 against the US dollar in 1971-72.
Many independent economists argue that this recent devaluation of the currency was dictated by the IMF through prior actions and it has nothing to do with macroeconomic fundamentals.
Dr Ashfaque Hassan Khan, a former economic adviser, said that there was a complete breakdown of economic policymaking as the country’s fiscal policy had become subservient to monetary and exchange rate policies. He said that the monetary tightening and exchange rate depreciation resulted in higher inflation, public debt and debt servicing. The empirical evidence showed that the 1% monetary tightening hiked the inflationary pressure by 1.3% in Pakistan's case.
Experts say this massive devaluation of currency under the PTI government fueled inflationary pressures, adding that two major factors contributed to the price hike. First, the prices of food and commodities, as well as fuel prices, skyrocketed in the international market, and second, the depreciation of the exchange rate by 30.5% also led to higher inflation.
Some studies conducted by economists suggest that 10% devaluation of the currency raised the Consumer Price Index (CPI)-based inflation by 0.6%. As a result, the 30.5% depreciation resulted in increasing inflationary pressures by approximately 2%. This indicates that from the inflation standing at 11.5% on a monthly basis, nearly 2% comes through depreciation of the exchange rate.
An analysis of regional currencies versus the US dollar shows that the Pakistani currency experienced massive depreciation compared to others.
The Indian rupee stood at 75.39 against a US dollar. The Indian rupee stood at Rs70.09 against the US dollar in 2018, Rs73.66 in December 2019, Rs74.53 in March 2020 and Rs74.57 in April 2021.
In the case of Bangladesh, the Bangladeshi Taka stood at 85.76 against the US dollar and it hovered around 84 to 85.9 on average over the last two years.
Meanwhile, the Pakistani rupee continued to fall in value and stood at Rs177 against a US dollar in December 2021. It depreciated sharply from Rs123 against to Rs177 against a dollar over the last three years and four months.
Rupee and Instability
During the Musharraf-Shaukat Aziz regime between 1999 and 2007, the country’s currency remained largely stable and hovered around Rs60 against a US dollar. When the PPP-led regime came to power in 2008, the rupee depreciated as a result of a rising current account deficit and slid to Rs80 just in a few months.
Then, the rupee further adjusted against the dollar in a gradual manner after Pakistan joined the IMF program and remained around Rs90 against the US dollar from 2008 to 2013. In June 2013, the currency stood at Rs98.5 against the US dollar.
Then, the PMLN came to power in 2013. In November 2013, the Pakistani currency stood at Rs107.5 against the US dollar. Former finance minister Ishaq Dar’s policies brought the rupee down to an average rate of Rs98 against the US dollar in June 2014.
The Pakistani rupee remained stable at Rs100 in August 2014 while it adjusted slightly and settled at Rs105 against the US dollar in 2015-16 and 2016-17. Then, former finance minister Miftah Ismail allowed adjustment of the rupee against the dollar and it nosedived to Rs118 against US dollar in June 2018.
The rupee continued to slide during the interim rule of a caretaker government. However, when the PTI-led regime joined the government in August 2018, the rupee stood at Rs123 against the US dollar.
Then, Pakistan joined the IMF programmer and the rupee on average further depreciated and stood at Rs155 against the US dollar in June 2019. Till April 2020, the rupee continued to depreciate to Rs164 against the US dollar. In August 2020, the rupee touched Rs167.7 against the US dollar.
For a brief period, till April 2021, the rupee strengthened and remained on average at Rs152 against the US dollar. Since April 2021, however, the Pakistani currency witnessed a fresh wave of depreciation as the rupee on average touched Rs156 against the US dollar in June 2021, Rs168 in September 2021 and Rs170 in November 2021. In December 2021, the rupee crossed Rs177 against US dollar.
Inflation
On average, the CPI-based inflation has hovered around 8.2% between 1991 and 2020-21. However, now the CPI-based inflation has crossed double-digits and touched 11.53% in November 2021. There are other factors fueling higher inflation but the massive devaluation of the rupee also played a key role in the surge in prices over the past few months.
Economist Dr Zafar Mahmood said that the increased foreign exchange reserves help countries to maneuver, but with limited reserves, there is less room a country to stabilise its currency. Pakistan needs to build up its foreign currency reserves with non-debt-creating inflows such as exports, remittances, and foreign investments.
Sajid Amin Javed, an economist from SDPI, said that the depreciation of the currency over the last three years had actually accumulated in the last eight years because the value of the rupee was artificially raised.
He said if data of the past decade was analysed, it would show that India and Bangladesh had allowed depreciation when it was required. If data from 2016 to 2018 was analysed, it would show that Pakistan’s current account deficit worsened but the rupee remained stable; while in India there was a lesser current account deficit but the Indian rupee depreciated from Rs63 to Rs71 against the US dollar.
He said Pakistan kept its rupee on the higher side and so accumulated depreciation occurred. He termed this phenomenon as “forced depreciation” as the foreign currency reserves depleted and the current account deficit widened. He said the events in Afghanistan also added pressure on Pakistan’s exchange rate.
Pakistan, he said, joined the IMF programme so it was left with no other option but to ensure implementation on the forced depreciation. “The main problem lies with our policies as it also triggers panic and uncertainty,” he added.
GEO
hoshiarpurexpress
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Very interesting and a sane discussion on IMF loan and Pakistan economy, without any jingoism.
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In line with market expectations, Pakistan’s central bank increased the benchmark interest rate by 100 basis points to 20-month high at 9.75% on Tuesday to decelerate inflation, narrow down current account deficit and achieve sustainable economic growth of close to 5% in fiscal year 2021-22.
Despite monetary tightening, the State Bank of Pakistan (SBP) estimates that the inflation reading and current account deficit would remain high in the current fiscal year compared to its previous projections.
Accordingly, it revised up its estimates for inflation to 9-11% for full fiscal year compared to earlier projection of 7-9%. It also revised up the estimate for the current account deficit to 4% of GDP (gross domestic product) for the fiscal year against 2-3% of GDP anticipated earlier.
“The MPC (monetary policy committee) noted that the current account deficit is expected to be fully financed from external inflows,” read SBP’s latest monetary policy statement. “As a result, foreign exchange reserves should remain at adequate levels for rest of the fiscal year and resume their growth trajectory as global commodity prices ease and import demand moderates.”
The central bank said that significant jump in yields (rate of return) of government debt securities of all tenors like Treasury Bills (T-bills) and Pakistan Investment Bonds (PIBs) in the secondary market and auctions were unjustified.
“The MPC noted that this increase appeared unwarranted,” according to the statement. Bond yields are a powerful measure to predict the benchmark interest rate in near future. Besides, T-bills and PIBs are the two major sources of government’s budgetary borrowing from the commercial banks. Unjustified surge increases cost of borrowing as well.
“Following Tuesday’s interest rate increase and given the current outlook for the economy and in particular for inflation and the current account, the MPC felt that the end goal of mildly positive real interest rates on forward-looking basis was now close to being achieved,” the statement said. “Looking ahead, the MPC expects monetary policy settings to remain broadly unchanged in the near term.”
Economic growth
High-frequency indicators of domestic demand, released since the last meeting (November 19), suggest that the economic growth remains robust.
The parameters included electricity generation, cement dispatches, sales of fast-moving consumer goods and petroleum products and persistent uptrend in imports and tax revenues.
The outlook for agriculture continues to be strong, supported by better seed availability and an expected increase in area under wheat cultivation. Meanwhile, robust growth in sales tax on services also suggests that the tertiary (services) sector is recovering well.
While some activity indicators are moderating on a sequential basis, partly as a result of recent policy actions to restrain domestic demand, “growth in this fiscal year is expected to be close to the upper-end of the forecast range of 4-5%. This projection factors in the expected impact of Tuesday’s interest rate decision”.
Inflation
Inflation pressure continued since the last MPC meeting as reflected by a significant surge in both headline and core inflation in November.
The rise in inflation has been broad-based with huge contribution coming from electricity charges, motor fuel, house rent, milk and vegetable ghee.
On a sequential basis, inflation rose 3% (month-on-month) to a 21-month high at 11.5% in November.
Looking ahead, based on this momentum and the expected path of energy tariffs, “inflation is likely to remain within the revised forecast range (9-11%) for the remaining of fiscal year 2021-22”.
Subsequently, as global commodity prices retrench, administered price increases dissipate and the impact of demand-moderating policies materialises, inflation is expected to decline to the medium-term target range of 5-7% during fiscal year 2022-23, the SBP said.
Current account deficit
Despite strong exports and remittances, the current account deficit has increased sharply this year due to a rise in imports - beyond expectations.
Inward shipments rose to $32.9 billion during July-November 2021 compared to $19.5 billion during the same period of previous year.
“Around 70% of the increase in imports stems from the sharp rise in global commodity prices while the rest is attributable to strong domestic demand.”
While in the near-term, monthly current account and trade deficit figures are likely to remain high, “they are expected to gradually moderate in the second-half (Jan-Jun) of fiscal year 2021-22 as global prices normalise.
Published in The Express Tribune, December 15th, 2021.
Despite monetary tightening, the State Bank of Pakistan (SBP) estimates that the inflation reading and current account deficit would remain high in the current fiscal year compared to its previous projections.
Accordingly, it revised up its estimates for inflation to 9-11% for full fiscal year compared to earlier projection of 7-9%. It also revised up the estimate for the current account deficit to 4% of GDP (gross domestic product) for the fiscal year against 2-3% of GDP anticipated earlier.
“The MPC (monetary policy committee) noted that the current account deficit is expected to be fully financed from external inflows,” read SBP’s latest monetary policy statement. “As a result, foreign exchange reserves should remain at adequate levels for rest of the fiscal year and resume their growth trajectory as global commodity prices ease and import demand moderates.”
The central bank said that significant jump in yields (rate of return) of government debt securities of all tenors like Treasury Bills (T-bills) and Pakistan Investment Bonds (PIBs) in the secondary market and auctions were unjustified.
“The MPC noted that this increase appeared unwarranted,” according to the statement. Bond yields are a powerful measure to predict the benchmark interest rate in near future. Besides, T-bills and PIBs are the two major sources of government’s budgetary borrowing from the commercial banks. Unjustified surge increases cost of borrowing as well.
“Following Tuesday’s interest rate increase and given the current outlook for the economy and in particular for inflation and the current account, the MPC felt that the end goal of mildly positive real interest rates on forward-looking basis was now close to being achieved,” the statement said. “Looking ahead, the MPC expects monetary policy settings to remain broadly unchanged in the near term.”
Economic growth
High-frequency indicators of domestic demand, released since the last meeting (November 19), suggest that the economic growth remains robust.
The parameters included electricity generation, cement dispatches, sales of fast-moving consumer goods and petroleum products and persistent uptrend in imports and tax revenues.
The outlook for agriculture continues to be strong, supported by better seed availability and an expected increase in area under wheat cultivation. Meanwhile, robust growth in sales tax on services also suggests that the tertiary (services) sector is recovering well.
While some activity indicators are moderating on a sequential basis, partly as a result of recent policy actions to restrain domestic demand, “growth in this fiscal year is expected to be close to the upper-end of the forecast range of 4-5%. This projection factors in the expected impact of Tuesday’s interest rate decision”.
Inflation
Inflation pressure continued since the last MPC meeting as reflected by a significant surge in both headline and core inflation in November.
The rise in inflation has been broad-based with huge contribution coming from electricity charges, motor fuel, house rent, milk and vegetable ghee.
On a sequential basis, inflation rose 3% (month-on-month) to a 21-month high at 11.5% in November.
Looking ahead, based on this momentum and the expected path of energy tariffs, “inflation is likely to remain within the revised forecast range (9-11%) for the remaining of fiscal year 2021-22”.
Subsequently, as global commodity prices retrench, administered price increases dissipate and the impact of demand-moderating policies materialises, inflation is expected to decline to the medium-term target range of 5-7% during fiscal year 2022-23, the SBP said.
Current account deficit
Despite strong exports and remittances, the current account deficit has increased sharply this year due to a rise in imports - beyond expectations.
Inward shipments rose to $32.9 billion during July-November 2021 compared to $19.5 billion during the same period of previous year.
“Around 70% of the increase in imports stems from the sharp rise in global commodity prices while the rest is attributable to strong domestic demand.”
While in the near-term, monthly current account and trade deficit figures are likely to remain high, “they are expected to gradually moderate in the second-half (Jan-Jun) of fiscal year 2021-22 as global prices normalise.
Published in The Express Tribune, December 15th, 2021.
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The Pakistan Stock Exchange staged a rally on Wednesday and the KSE-100 index soared over 1,100 points in intra-day trading, driven by clarity on interest rate coupled with upbeat near-term outlook issued by the State Bank of Pakistan.
In addition to increasing the interest rate by 100 basis points to 9.75%, the Monetary Policy Committee of the State Bank of Pakistan expected monetary settings of the country to remain broadly unchanged which revived investor sentiments.
According to the monetary policy statement, the end goal of mildly positive real interest rates on a forward-looking basis was now close to being achieved.
On the other hand, market participants who had held their purchasing decisions in wait for clarity on the interest rate, made fresh investments during the session.
At 2:02 PM, the KSE-100 index was trading at 44,362.33 points following a gain of 1,115.62 points or 2.58%.
Speaking to The Express Tribune Alpha Beta Core CEO Khurram Schehzad said that optimistic outlook of the economy, issued by the State Bank of Pakistan, fuelled bullish trading.
“Real interest rate is approaching zero and this, in particular, strengthened the market spirits,” he said. “The surge is the initial response to the upbeat projections issued by SBP.”
Moreover, the KSE-100 had been trading under capacity for the past few sessions and now it was recovering to its true potential, he said.
Arif Habib Limited Head of Research Tahir Abbas pointed out that although the central bank hiked the interest rate on Tuesday, it also projected status quo in monetary settings over the next few months which triggered a buying.
“The objectives of SBP have been broadly achieved and the near term outlook remains unchanged,” he said. “In addition, the much needed clarity on interest rate is also aiding the uptrend.”
In addition to increasing the interest rate by 100 basis points to 9.75%, the Monetary Policy Committee of the State Bank of Pakistan expected monetary settings of the country to remain broadly unchanged which revived investor sentiments.
According to the monetary policy statement, the end goal of mildly positive real interest rates on a forward-looking basis was now close to being achieved.
On the other hand, market participants who had held their purchasing decisions in wait for clarity on the interest rate, made fresh investments during the session.
At 2:02 PM, the KSE-100 index was trading at 44,362.33 points following a gain of 1,115.62 points or 2.58%.
Speaking to The Express Tribune Alpha Beta Core CEO Khurram Schehzad said that optimistic outlook of the economy, issued by the State Bank of Pakistan, fuelled bullish trading.
“Real interest rate is approaching zero and this, in particular, strengthened the market spirits,” he said. “The surge is the initial response to the upbeat projections issued by SBP.”
Moreover, the KSE-100 had been trading under capacity for the past few sessions and now it was recovering to its true potential, he said.
Arif Habib Limited Head of Research Tahir Abbas pointed out that although the central bank hiked the interest rate on Tuesday, it also projected status quo in monetary settings over the next few months which triggered a buying.
“The objectives of SBP have been broadly achieved and the near term outlook remains unchanged,” he said. “In addition, the much needed clarity on interest rate is also aiding the uptrend.”
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ISLAMABAD:The government has decided to set up the Economic Executive Council (EEC) in an attempt to shore up efforts to arrest downward trend in the economic indicators.
According to a finance ministry notification, the nine-member council held its first meeting on Wednesday. The council, formed with Prime Minister’s Adviser on Finance Shaukat Tarin in the chair, included five ministers, two advisers, finance secretary and the State Bank of Pakistan (SBP) governor.
The notified scope of the council suggests that it would do the work, which is in the domain of the constitutional forums – the National Economic Council (NEC) and other cabinet bodies like the Economic Coordination Committee (ECC), the Executive Committee of the National Economic Council (Ecnec), the Steering Committee on Foreign-Funded projects, the Monetary and Fiscal Policies Coordination Board, the Cabinet Committee on State-owned Enterprises and the National Price Monitoring Committee.
In addition, there are the Economic Advisery Council and the Economic Advisory Group that have representation of the private sector. The EEC seems to have little room for manoeuvring as the country’s economic policy is now defined under the International Monetary Fund (IMF) programme.
The EEC members are Finance Adviser Shaukat Tarin, Food Minister Fakhr Imam, Industries Minister Khusro Bakhtiar, Energy Minister Hammad Azhar, Planning Minister Asad Umar, Commerce Adviser Razak Dawood, Finance Secretary Hamid Yaqoob Sheikh and SBP Governor Dr Reza Baqir. All of them are already members of the ECC –the economic policy-making body of the federal cabinet.
“The Economic Executive Council (EEC) is constituted to review the overall economic condition of the country and take possible corrective measures considering available resources of the country”, reads the Finance Ministry’s notification.
“The main objective of the EEC is to initiate an integrated economic policy relevant for overall welfare of society,” it says, adding that the EEC will be engaged regularly on a weekly basis on the issues of national economic importance.
The EEC will analyse the effectiveness of the role of government in the provision of subsidies, protection and other financial support to the state-owned enterprises and important sectors of the economy in terms of economic gains and losses to the national exchequer – a function currently performed by the Cabinet Committee on SOEs.
The ministry states that the new council will also review the market structure of various important sectors of the economy and its problems to promote competition in the economy by correcting the market structure, discouraging cartelisation, price manipulations, margins and other market distortions.
But under the existing law, this is the job of the Competition Commission of Pakistan, which the EEC has apparently taken over.
The EEC will also ensure effective utilisation of the foreign assistance, according to the Finance Ministry. It will also monitor the mega initiatives of the government for jobs creation and higher growth.
The EEC is also expected to suggest policy initiatives that can bolster existing policies in order to enhance their economic, financial and fiscal impact. It will advise on the execution of mega infrastructure projects of energy, industries and production.
“The purpose of setting up the executive council is to have a supreme body of economic ministers to coordinate on strategic policy initiatives,” an EEC member told The Express Tribune, while speaking on condition of anonymity.
He added that this new forum would take the long-term perspective of the economy, while all the existing bodies were handling day-to-day operational issues.
A few months ago, Tarin had launched a three-year long-term plan from the platform of the EAC, which, according to him, would put the country on a path of sustainable growth.
However, since then the economic indicators have been southbound with inflation now officially projected to enter into double digit by the EBP in its latest Monetary Policy Statement. As against the earlier target of 7 to 9% inflation, the central bank has now given a 9 to 11% projection.
It has also upwardly revised the current account deficit projection from 2.5%-3% to 4% of the gross domestic product (GDP) or nearly $14 billion. In the budget, the government had set the current account deficit target at $2.3 billion.
On the other hand, the rupee has constantly been shedding its value against the US dollar, reaching Rs178 to a dollar in the interbank, and the monthly imports have jumped to $7.85 billion in November.
Sources said that in the maiden EEC meeting, the topics of the exchange rate and the widening of the current account deficit came up for discussion. They added that in the next meeting a detailed discussion would take place.
Under the SBP Act of 1956, the Monetary and Fiscal Policies Coordination Board is the right forum to discuss these issues. But now the government has agreed to abolish this board under pressure from the central bank and the IMF.
https://tribune.com.pk/story/2334151/another-body-set-up-to-solve-economic-problems
According to a finance ministry notification, the nine-member council held its first meeting on Wednesday. The council, formed with Prime Minister’s Adviser on Finance Shaukat Tarin in the chair, included five ministers, two advisers, finance secretary and the State Bank of Pakistan (SBP) governor.
The notified scope of the council suggests that it would do the work, which is in the domain of the constitutional forums – the National Economic Council (NEC) and other cabinet bodies like the Economic Coordination Committee (ECC), the Executive Committee of the National Economic Council (Ecnec), the Steering Committee on Foreign-Funded projects, the Monetary and Fiscal Policies Coordination Board, the Cabinet Committee on State-owned Enterprises and the National Price Monitoring Committee.
In addition, there are the Economic Advisery Council and the Economic Advisory Group that have representation of the private sector. The EEC seems to have little room for manoeuvring as the country’s economic policy is now defined under the International Monetary Fund (IMF) programme.
The EEC members are Finance Adviser Shaukat Tarin, Food Minister Fakhr Imam, Industries Minister Khusro Bakhtiar, Energy Minister Hammad Azhar, Planning Minister Asad Umar, Commerce Adviser Razak Dawood, Finance Secretary Hamid Yaqoob Sheikh and SBP Governor Dr Reza Baqir. All of them are already members of the ECC –the economic policy-making body of the federal cabinet.
“The Economic Executive Council (EEC) is constituted to review the overall economic condition of the country and take possible corrective measures considering available resources of the country”, reads the Finance Ministry’s notification.
“The main objective of the EEC is to initiate an integrated economic policy relevant for overall welfare of society,” it says, adding that the EEC will be engaged regularly on a weekly basis on the issues of national economic importance.
The EEC will analyse the effectiveness of the role of government in the provision of subsidies, protection and other financial support to the state-owned enterprises and important sectors of the economy in terms of economic gains and losses to the national exchequer – a function currently performed by the Cabinet Committee on SOEs.
The ministry states that the new council will also review the market structure of various important sectors of the economy and its problems to promote competition in the economy by correcting the market structure, discouraging cartelisation, price manipulations, margins and other market distortions.
But under the existing law, this is the job of the Competition Commission of Pakistan, which the EEC has apparently taken over.
The EEC will also ensure effective utilisation of the foreign assistance, according to the Finance Ministry. It will also monitor the mega initiatives of the government for jobs creation and higher growth.
The EEC is also expected to suggest policy initiatives that can bolster existing policies in order to enhance their economic, financial and fiscal impact. It will advise on the execution of mega infrastructure projects of energy, industries and production.
“The purpose of setting up the executive council is to have a supreme body of economic ministers to coordinate on strategic policy initiatives,” an EEC member told The Express Tribune, while speaking on condition of anonymity.
He added that this new forum would take the long-term perspective of the economy, while all the existing bodies were handling day-to-day operational issues.
A few months ago, Tarin had launched a three-year long-term plan from the platform of the EAC, which, according to him, would put the country on a path of sustainable growth.
However, since then the economic indicators have been southbound with inflation now officially projected to enter into double digit by the EBP in its latest Monetary Policy Statement. As against the earlier target of 7 to 9% inflation, the central bank has now given a 9 to 11% projection.
It has also upwardly revised the current account deficit projection from 2.5%-3% to 4% of the gross domestic product (GDP) or nearly $14 billion. In the budget, the government had set the current account deficit target at $2.3 billion.
On the other hand, the rupee has constantly been shedding its value against the US dollar, reaching Rs178 to a dollar in the interbank, and the monthly imports have jumped to $7.85 billion in November.
Sources said that in the maiden EEC meeting, the topics of the exchange rate and the widening of the current account deficit came up for discussion. They added that in the next meeting a detailed discussion would take place.
Under the SBP Act of 1956, the Monetary and Fiscal Policies Coordination Board is the right forum to discuss these issues. But now the government has agreed to abolish this board under pressure from the central bank and the IMF.
https://tribune.com.pk/story/2334151/another-body-set-up-to-solve-economic-problems
hoshiarpurexpress
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Can anyone tell who is the guy speaking in this video?
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Boom �� <a href="https://t.co/vGNbxfEkhn">pic.twitter.com/vGNbxfEkhn</a></p>— Junaid (@junaidmuhammadd) <a href="https://twitter.com/junaidmuhammadd/status/1471139090385018886?ref_src=twsrc%5Etfw">December 15, 2021</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Boom �� <a href="https://t.co/vGNbxfEkhn">pic.twitter.com/vGNbxfEkhn</a></p>— Junaid (@junaidmuhammadd) <a href="https://twitter.com/junaidmuhammadd/status/1471139090385018886?ref_src=twsrc%5Etfw">December 15, 2021</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
It's Syed Shabbar Zaidi. He also said later "My speech in Hamdard University is being misreported. There was a presentation of half & hour. Only three minutes have been cherry picked. Yes I said that with this constant current account & fiscal deficit there are issues of bankruptcy & going concern but look at the solution."
As an accountant, Zaidi understands the situation.
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Total foreign debt of over 115 billion USD. Constant estimated current account deficit of say at the USD 5 to 8 billion. When we will be able to pay that debt ? It is better to recognise the reality then living in illusion. We need to have a reality check.</p>— SyedShabbarZaidi (@SShabbarZaidi) <a href="https://twitter.com/SShabbarZaidi/status/1471390196998586368?ref_src=twsrc%5Etfw">December 16, 2021</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Total foreign debt of over 115 billion USD. Constant estimated current account deficit of say at the USD 5 to 8 billion. When we will be able to pay that debt ? It is better to recognise the reality then living in illusion. We need to have a reality check.</p>— SyedShabbarZaidi (@SShabbarZaidi) <a href="https://twitter.com/SShabbarZaidi/status/1471390196998586368?ref_src=twsrc%5Etfw">December 16, 2021</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
JaDed
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I found the responses there unique with people bringing India and America into the picture.. which is almost like apples and oranges.
Yes, there are those on Twitter pointing out that both India and Pakistan have about the same debt to GDP ratio which is a wrong comparison on 2 counts.
1) Total debt to GDP ratio may be approx the same, but India's external debt to GDP ratio is 21% and Pakistan's 41%. It is the external debt that causes currency depreciation and inflation.
View attachment 113711
View attachment 113712
2) India has forex reserves of $636 billion compared to Pakistan's $25 billion. So India is in no danger of a financial crisis or steep currency devaluation.
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ISLAMABAD: The government has finalised the mini-budget to the tune of Rs360 billion that would slap 17% sales tax on about 140 essential consumable and industrial goods, in addition to increasing the income tax rates on phone calls by 50%.
The plan was shared with Adviser to the PM on Finance Shaukat Tarin on Thursday which, once approved by parliament, would make everything expensive.
The prices of goods, including milk, cereals, bakery items, meat, chicken, gold, bicycles, cars including electric cars, mobile phones will rise, unleashing another wave of inflation in the country.
In a bid to partially offset the impact of the mini-budget, a subsidy plan of Rs41 billion has also been prepared. However, it is unlikely to mitigate its full impact.
Inflation jumped to 11.5% last month and the State Bank of Pakistan has also upward adjusted its inflation projection to the range of 9 to 11% for the current fiscal year.
The government is also in process of withdrawing electricity subsidies.
Prime Minister Imran Khan believes that Pakistan is the cheapest country in the world -- a remark that is contrary to the ground reality.
The inflation rate is the highest in the country among all the South Asian nations, according to a World Bank report.
It was the first comprehensive briefing that Tarin received on the mini-budget that has been agreed between Pakistan and the International Monetary Fund (IMF) as part of pre-conditions for the revival of the stalled $6 billion bailout programme.
Federal Board of Revenue (FBR) Chairman Dr Mohammad Ashfaq gave the briefing to Tarin.
The government has decided to increase income tax on cellular services from 10% to 15% to generate revenue worth Rs5 billion, sources told The Express Tribune.
This is a partial reversal of the reduction in the tax on phone calls in the budget.
The government has also decided to slap income tax on foreign produced TV dramas and serials as well as advertisements starring actors from other countries. The decision has been made under pressure from the local drama producers.
The government has also proposed that the dividend received by non-Real Estate Investment Trusts (REIT) investor from a special purpose vehicle should be taxed at the rate of 35%.
Tarin had said that the IMF had demanded imposing Rs700 billion in new taxes but he had convinced the global lender to levy only Rs350 billion on account of withdrawal of sales tax exemptions.
The sources said the government had decided to slap 17% GST on at least 140 types of consumable goods and industrial machinery to raise Rs353 billion worth of taxes.
A major chunk of the revenue -- around Rs300 billion -- will be generated by slapping 17% tax at the import stage on nearly 80 items. The majority of these items are essential goods and do not fall in the category of luxury goods.
About six dozen items will be charged at 17% sales tax rate at their import stage.
Some of consumer-sensitive goods that will also attract sales tax at import are raw materials for the manufacturing of medicines, cereals, live animals, birds and eggs, meat, fish, fresh vegetables, fish feed and animal feed and journals and periodicals.
The imposition of 17% GST on raw materials of the medicines might create hue and cry in in the society.
The representatives of the pharmaceutical sector also met with the finance adviser on Thursday in a bid to convince him not to impose tax on their raw materials.
However, the FBR sources said that a major chunk of the pharmaceutical sector was undocumented. Their documentation would help in lowering the prices, including through the adjustment of input tax at the final stage.
The estimated size of the pharmaceutical sector is nearly Rs700 billion and Rs530 billion is the undocumented supply chain that is causing huge tax evasion, they added.
They said there were over 800 pharmaceutical manufacturers registered with the Drug Regulatory Authority of Pakistan (DRAP) but only 453 manufacturers were registered with the FBR.
The government is now proposing zero sales tax for the pharmaceutical sector for the documentation of the supply chain.
However, this will result in the creation of huge refunds due to 17% GST charged at the import stage on the raw materials of the medicines.
The imported plant and machinery will also be subject to 17% sales tax rates including those purchased for setting up power generation and transmission projects.
Similarly, the machinery for renewable energy including solar, wind and nuclear power generation will also attract 17% sales tax.
The world is moving towards alternate source of electricity generation but the government’s policies are contrary to the global direction.
The machinery for mining and extraction of minerals as well as CKD kits for single cylinder engines will be subjected to 17% GST.
To generate another Rs9 billion, the government has decided to slap 17% sales tax on the local supplies of one dozen items. They include Items sold in bakeries and sweet shops, food stuff served in flight kitchens, sausages and products of poultry meat, locally produced crude vegetable oil, sprinkler, drip and spray pumps.
About four dozen items that are currently subject to lower than 17% GST will also attract the standard percentage to generate Rs31 billion.
They include dairy items sold in branded packaging as well as items sold in restaurants and sweet shops. The locally manufactured cars of above 850cc will again be subject to 17% GST.
The hybrid electric vehicles above 1800cc are also proposed to be taxed at 17%.
Surprisingly, imported electric vehicles in CBU condition have been targeted for increasing revenue. This is in contrast to the rest of world, where the use of electric vehicles is being encouraged.
The import of scrap, silver, gold in unworked condition, jewellery and various types of plant and machinery will also be subjected to 17% GST.
About half a dozen goods that are currently taxable at zero rate would be subject to 17% GST in a bid to raise Rs10 billion.
They include the import of large ships for repair and maintenance, imported bicycles and imported infant formula milk.
Mobile phones that are currently subject to Rs1,740 to Rs,9270 per set fixed sales tax will be charged at 17% standard rate aimed at generating Rs7 billion, the sources said.
This will increase the tax burden of a high-end phone set from Rs9,270 to roughly Rs42,000 -- a surge of Rs32,730 or 353%, the sources added.
The items that will still be protected from the imposition of 17% GST only at the local stage include fruits, vegetables, pulses, wheat and rice, poultry, fish and meat consumed by the common man.
Milk and fat-filled milk, wheat bran and beet sugar, educational books & stationery items, pesticides, imported parts for computers and laptops, imported CKD kits for electric vehicles, imported plant and machinery for installation in SEZs have also been exempted.
Some of these items will be subject to sales tax but the government will give Rs41 billion subsidies on them.
Read Also: No new taxes in mini-budget, says Tarin
It is discussing to grant a subsidy of over Rs15 billion on infant milk; Rs3 billion on cotton seed; Rs3.5 billion on seeds and fruits; Rs4 billion on animal feed; and Rs2 billion on poultry feed.
A subsidy of Rs1.5 billion is proposed for goods supplied to the government hospitals, Rs5 billion on grains excluding wheat, rice and flour and Rs5 billion on oil cake and solid residue.
However, the disbursement of subsidies has always remained non-transparent and discretionary with no firm commitments for their continuation in the future.
The sources said after the endorsement of the finance adviser, the mini-budget will now be presented before the federal cabinet for approval before its submission in parliament.
The government has committed to introduce over Rs525 billion taxation measures in addition to slashing Rs200 billion development funds as well as Rs20 billion for non-uplift projects as part of the IMF condition to create primary budget surplus in this fiscal year.
https://tribune.com.pk/story/2334327/govt-to-slap-17-gst-on-140-goods
The plan was shared with Adviser to the PM on Finance Shaukat Tarin on Thursday which, once approved by parliament, would make everything expensive.
The prices of goods, including milk, cereals, bakery items, meat, chicken, gold, bicycles, cars including electric cars, mobile phones will rise, unleashing another wave of inflation in the country.
In a bid to partially offset the impact of the mini-budget, a subsidy plan of Rs41 billion has also been prepared. However, it is unlikely to mitigate its full impact.
Inflation jumped to 11.5% last month and the State Bank of Pakistan has also upward adjusted its inflation projection to the range of 9 to 11% for the current fiscal year.
The government is also in process of withdrawing electricity subsidies.
Prime Minister Imran Khan believes that Pakistan is the cheapest country in the world -- a remark that is contrary to the ground reality.
The inflation rate is the highest in the country among all the South Asian nations, according to a World Bank report.
It was the first comprehensive briefing that Tarin received on the mini-budget that has been agreed between Pakistan and the International Monetary Fund (IMF) as part of pre-conditions for the revival of the stalled $6 billion bailout programme.
Federal Board of Revenue (FBR) Chairman Dr Mohammad Ashfaq gave the briefing to Tarin.
The government has decided to increase income tax on cellular services from 10% to 15% to generate revenue worth Rs5 billion, sources told The Express Tribune.
This is a partial reversal of the reduction in the tax on phone calls in the budget.
The government has also decided to slap income tax on foreign produced TV dramas and serials as well as advertisements starring actors from other countries. The decision has been made under pressure from the local drama producers.
The government has also proposed that the dividend received by non-Real Estate Investment Trusts (REIT) investor from a special purpose vehicle should be taxed at the rate of 35%.
Tarin had said that the IMF had demanded imposing Rs700 billion in new taxes but he had convinced the global lender to levy only Rs350 billion on account of withdrawal of sales tax exemptions.
The sources said the government had decided to slap 17% GST on at least 140 types of consumable goods and industrial machinery to raise Rs353 billion worth of taxes.
A major chunk of the revenue -- around Rs300 billion -- will be generated by slapping 17% tax at the import stage on nearly 80 items. The majority of these items are essential goods and do not fall in the category of luxury goods.
About six dozen items will be charged at 17% sales tax rate at their import stage.
Some of consumer-sensitive goods that will also attract sales tax at import are raw materials for the manufacturing of medicines, cereals, live animals, birds and eggs, meat, fish, fresh vegetables, fish feed and animal feed and journals and periodicals.
The imposition of 17% GST on raw materials of the medicines might create hue and cry in in the society.
The representatives of the pharmaceutical sector also met with the finance adviser on Thursday in a bid to convince him not to impose tax on their raw materials.
However, the FBR sources said that a major chunk of the pharmaceutical sector was undocumented. Their documentation would help in lowering the prices, including through the adjustment of input tax at the final stage.
The estimated size of the pharmaceutical sector is nearly Rs700 billion and Rs530 billion is the undocumented supply chain that is causing huge tax evasion, they added.
They said there were over 800 pharmaceutical manufacturers registered with the Drug Regulatory Authority of Pakistan (DRAP) but only 453 manufacturers were registered with the FBR.
The government is now proposing zero sales tax for the pharmaceutical sector for the documentation of the supply chain.
However, this will result in the creation of huge refunds due to 17% GST charged at the import stage on the raw materials of the medicines.
The imported plant and machinery will also be subject to 17% sales tax rates including those purchased for setting up power generation and transmission projects.
Similarly, the machinery for renewable energy including solar, wind and nuclear power generation will also attract 17% sales tax.
The world is moving towards alternate source of electricity generation but the government’s policies are contrary to the global direction.
The machinery for mining and extraction of minerals as well as CKD kits for single cylinder engines will be subjected to 17% GST.
To generate another Rs9 billion, the government has decided to slap 17% sales tax on the local supplies of one dozen items. They include Items sold in bakeries and sweet shops, food stuff served in flight kitchens, sausages and products of poultry meat, locally produced crude vegetable oil, sprinkler, drip and spray pumps.
About four dozen items that are currently subject to lower than 17% GST will also attract the standard percentage to generate Rs31 billion.
They include dairy items sold in branded packaging as well as items sold in restaurants and sweet shops. The locally manufactured cars of above 850cc will again be subject to 17% GST.
The hybrid electric vehicles above 1800cc are also proposed to be taxed at 17%.
Surprisingly, imported electric vehicles in CBU condition have been targeted for increasing revenue. This is in contrast to the rest of world, where the use of electric vehicles is being encouraged.
The import of scrap, silver, gold in unworked condition, jewellery and various types of plant and machinery will also be subjected to 17% GST.
About half a dozen goods that are currently taxable at zero rate would be subject to 17% GST in a bid to raise Rs10 billion.
They include the import of large ships for repair and maintenance, imported bicycles and imported infant formula milk.
Mobile phones that are currently subject to Rs1,740 to Rs,9270 per set fixed sales tax will be charged at 17% standard rate aimed at generating Rs7 billion, the sources said.
This will increase the tax burden of a high-end phone set from Rs9,270 to roughly Rs42,000 -- a surge of Rs32,730 or 353%, the sources added.
The items that will still be protected from the imposition of 17% GST only at the local stage include fruits, vegetables, pulses, wheat and rice, poultry, fish and meat consumed by the common man.
Milk and fat-filled milk, wheat bran and beet sugar, educational books & stationery items, pesticides, imported parts for computers and laptops, imported CKD kits for electric vehicles, imported plant and machinery for installation in SEZs have also been exempted.
Some of these items will be subject to sales tax but the government will give Rs41 billion subsidies on them.
Read Also: No new taxes in mini-budget, says Tarin
It is discussing to grant a subsidy of over Rs15 billion on infant milk; Rs3 billion on cotton seed; Rs3.5 billion on seeds and fruits; Rs4 billion on animal feed; and Rs2 billion on poultry feed.
A subsidy of Rs1.5 billion is proposed for goods supplied to the government hospitals, Rs5 billion on grains excluding wheat, rice and flour and Rs5 billion on oil cake and solid residue.
However, the disbursement of subsidies has always remained non-transparent and discretionary with no firm commitments for their continuation in the future.
The sources said after the endorsement of the finance adviser, the mini-budget will now be presented before the federal cabinet for approval before its submission in parliament.
The government has committed to introduce over Rs525 billion taxation measures in addition to slashing Rs200 billion development funds as well as Rs20 billion for non-uplift projects as part of the IMF condition to create primary budget surplus in this fiscal year.
https://tribune.com.pk/story/2334327/govt-to-slap-17-gst-on-140-goods
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- Oct 2, 2004
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Pakistan’s current account deficit - the gap between the country’s higher foreign expenditure and lower income - widened to a 40-month high at $1.91 billion in November 2021 in the wake of a surge in import payments.
“Current account deficit widened slightly to $1.91 billion in November from $1.76 billion in October, as imports outstripped strong exports and robust remittances,” the State Bank of Pakistan (SBP) said on its official Twitter handle.
“The deficit figure is lower than projections of the (financial) market of $2-2.5 billion,” Pak-Kuwait Investment Company Head of Research Samiullah Tariq said while talking to The Express Tribune.
The market had anticipated a massive deficit after the Pakistan Bureau of Statistics (PBS) reported imports worth $7.92 billion for November 2021.
As usual, the central bank used its own formula for imports and recorded inward shipments of $6.42 billion to calculate the deficit for the month.
The import number, released by the SBP, was $1.5 billion lower than the one reported by the PBS, “which is probably the largest gap seen between the SBP and PBS numbers in any month,” said Ismail Iqbal Securities Head of Research Fahad Rauf in a commentary.
This indicates that payments for some of the purchased goods have not been made in the same month, which is a usual practice.
“This will likely carry forward the burden of these imports into the coming months, hence the current account deficit for December 2021 is likely to be higher than what is being anticipated.”
“To note, the major growth in imports was witnessed in the case of petroleum products and vaccines,” he added.
Other noteworthy imports included food items (palm oil and sugar), plant and machinery for the expansion of industrial base and agricultural inputs (medicinal products and plastic material).
Imports were mainly lifted by high international commodity prices in addition to strong domestic economic recovery, the central bank said.
“Due to the higher recent outturns, the current account deficit is projected at around 4% of GDP (gross domestic product) that is somewhat higher than earlier projections (of 2-3% of GDP for the ongoing fiscal year),” the bank said in its monetary policy statement issued on December 14.
“Monthly current account and trade deficit figures are likely to remain high and they are expected to gradually moderate in the second half (January-June) of FY22 as global prices normalise with the easing of supply disruptions and tightening of monetary policy by major central banks,” the bank said.
In addition, the recent policy actions taken to moderate domestic demand - including policy rate hikes and curbs on consumer finance - and proposed fiscal measures should help steer growth in import volumes during the remaining part of the year, it added.
Tariq said that consumption of various products had slowed down. This suggests that the economy has started cooling down in line with the measures taken by the central bank and the Ministry of Finance recently. The measures were aimed at reducing the current account deficit and controlling inflation.
“Car financing (by banks) and sales of petroleum products, cement and fertiliser (DAP) slowed down in November compared to the previous month of October,” he said.
However, export earnings surged 13% in November compared to October, while imports grew just 5%. In absolute terms, the growth in imports was significantly higher than the expansion in export earnings, he said.
“However, the slowdown in imports in percentage terms signals towards a drop in consumption while the rise in export earnings in percentage terms remains strong mainly due to increase in the benchmark interest rate and rupee depreciation,” he said.
Export earnings are expected to further improve by $200-300 million in December 2021, while imports would slow down by $700-800 million in the month.
“Growth in textile and IT exports would continue to help improve the overall export quantum on a month-on-month basis,” he said.
“The current account deficit is expected to continue to fall gradually from December onwards. It is expected to enter sustainable range of $700-800 million a month from the February 2022,” he said.
Published in The Express Tribune, December 21st, 2021.
“Current account deficit widened slightly to $1.91 billion in November from $1.76 billion in October, as imports outstripped strong exports and robust remittances,” the State Bank of Pakistan (SBP) said on its official Twitter handle.
“The deficit figure is lower than projections of the (financial) market of $2-2.5 billion,” Pak-Kuwait Investment Company Head of Research Samiullah Tariq said while talking to The Express Tribune.
The market had anticipated a massive deficit after the Pakistan Bureau of Statistics (PBS) reported imports worth $7.92 billion for November 2021.
As usual, the central bank used its own formula for imports and recorded inward shipments of $6.42 billion to calculate the deficit for the month.
The import number, released by the SBP, was $1.5 billion lower than the one reported by the PBS, “which is probably the largest gap seen between the SBP and PBS numbers in any month,” said Ismail Iqbal Securities Head of Research Fahad Rauf in a commentary.
This indicates that payments for some of the purchased goods have not been made in the same month, which is a usual practice.
“This will likely carry forward the burden of these imports into the coming months, hence the current account deficit for December 2021 is likely to be higher than what is being anticipated.”
“To note, the major growth in imports was witnessed in the case of petroleum products and vaccines,” he added.
Other noteworthy imports included food items (palm oil and sugar), plant and machinery for the expansion of industrial base and agricultural inputs (medicinal products and plastic material).
Imports were mainly lifted by high international commodity prices in addition to strong domestic economic recovery, the central bank said.
“Due to the higher recent outturns, the current account deficit is projected at around 4% of GDP (gross domestic product) that is somewhat higher than earlier projections (of 2-3% of GDP for the ongoing fiscal year),” the bank said in its monetary policy statement issued on December 14.
“Monthly current account and trade deficit figures are likely to remain high and they are expected to gradually moderate in the second half (January-June) of FY22 as global prices normalise with the easing of supply disruptions and tightening of monetary policy by major central banks,” the bank said.
In addition, the recent policy actions taken to moderate domestic demand - including policy rate hikes and curbs on consumer finance - and proposed fiscal measures should help steer growth in import volumes during the remaining part of the year, it added.
Tariq said that consumption of various products had slowed down. This suggests that the economy has started cooling down in line with the measures taken by the central bank and the Ministry of Finance recently. The measures were aimed at reducing the current account deficit and controlling inflation.
“Car financing (by banks) and sales of petroleum products, cement and fertiliser (DAP) slowed down in November compared to the previous month of October,” he said.
However, export earnings surged 13% in November compared to October, while imports grew just 5%. In absolute terms, the growth in imports was significantly higher than the expansion in export earnings, he said.
“However, the slowdown in imports in percentage terms signals towards a drop in consumption while the rise in export earnings in percentage terms remains strong mainly due to increase in the benchmark interest rate and rupee depreciation,” he said.
Export earnings are expected to further improve by $200-300 million in December 2021, while imports would slow down by $700-800 million in the month.
“Growth in textile and IT exports would continue to help improve the overall export quantum on a month-on-month basis,” he said.
“The current account deficit is expected to continue to fall gradually from December onwards. It is expected to enter sustainable range of $700-800 million a month from the February 2022,” he said.
Published in The Express Tribune, December 21st, 2021.
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The federal cabinet on Tuesday delayed the approval of a mini-budget to the tune of Rs360 billion and a controversial central bank autonomy bill aimed at assessing their impact on the political capital of the ruling party and national security.
The government had planned to take the cabinet’s nod to the Supplementary Finance Bill, 2021 to slap highly inflationary Rs360 billion in indirect taxes. It also intended to have the cabinet approve the State Bank of Pakistan Amendment Bill, 2021 to meet prior conditions set by the International Monetary Fund (IMF).
However, the government decided to delay the approval of both the bills after it faced defeat in local government elections in its stronghold – Khyber-Pakhtunkhwa.
The ruling party members attributed the defeat to rising inflation in the country. The federal cabinet, however, gave an ex-post facto approval to the highly expensive -- nearly $4 billion -- short-term foreign commercial loans that the ruling party has taken to artificially inflate the foreign exchange reserves. The move is also intended to meet foreign debt-related obligations.
“The (Supplementary) Finance Bill has been withdrawn from the cabinet meeting agenda,” Federal Information Minister Fawad Chaudhry told The Express Tribune. To a question whether or not the mini-budget had been withdrawn due to political reasons, the minister replied: “it is obvious.”
Fawad said that the bill would again be brought before the cabinet in the next couple of days. Finance Adviser Shaukat Tarin also said the both the SBP Amendment Bill and the Supplementary Finance Bill would be presented to the federal cabinet before the end of this week.
The imposition of roughly Rs360 billion additional taxes and approval of the SBP Amendment Bill are the pre-conditions that the IMF has set for reviving the $6 billion stalled bailout programme. However, it seems that the government is going to miss the date of January 12 for the IMF board meeting, as securing the approval of parliament for both the bills before the end of this month now seems impossible.
A country’s case has to be circulated among the board members at least two weeks before the scheduled board meeting date. The SBP Amendment Bill was cleared by the Cabinet Committee on Legislative Cases (CCLC) after holding two consecutive sessions. The CCLC had made minor changes in the proposed revised draft and cleared it without suggesting any major change, said the sources.
The sources added that some of institutions responsible for national security had expressed their reservations over giving unchecked autonomy to the central bank without any accountability. The information minister said the SBP Amendment Bill was not final yet and the CCLC would make more changes in it.
Subsequently, Law Minister Farogh Naseem had termed some of the clauses that were part of the March bill as “unconstitutional”. In a bid to revive the $6 billion loan programme, the finance ministry had conceded significant ground to the central bank but in return it could not ensure accountability, missing the key objective of legal amendments.
The most crucial objective for any central bank is price stability through explicit targeting of inflation but it that was missing from the SBP Amendment Bill. The IMF has rejected Pakistan’s request to keep a door open for borrowing from the central bank and also did not agree on any meaningful accountability of SBP. The ban on borrowing from the central bank has left the government at the mercy of commercial banks that have in recent weeks demanded an interest rate that is significantly higher than the key policy rate.
The central bank’s profit would also not be transferred 100% to the federal government until the SBP gets cover to back its monetary liabilities. The IMF did not accept Pakistan’s demand to retain the Monetary and Fiscal Policy Coordination Board, which is proposed to be abolished. The IMF also did not accept a proposal that the federal government would give an inflation target to the central bank.
While addressing the news conference, the law minister said the federal cabinet had given the nod to $3.9 billion foreign commercial loans. The finance ministry had taken these loans to repay old ones from December 2020 to November 2021 without prior approval of the cabinet. “Our condition is such that we are taking new loans to repay old ones,” said Fawad.
But he hastily blamed the last governments for the mess. He claimed that that the previous governments took short-term loans which the PTI government was now replacing with long-term ones.The cabinet also gave ex-post facto approval to Dubai Islamic Bank’s loan worth $420 million, Credit Suisse’s $85 million, Industrial and Commercial Bank of China’s $800 million, ECO Trade and Development Bank’s $40 million, Ajman Bank’s $350 million, China Development Bank’s $1 billion, Standard Chartered Bank’s $800 million, Dubai Islamic Bank’s $215 million, and Mashraq Bank’s $270.5 million.
Briefing the media after the meeting of the federal cabinet, Fawad said all economic indicators presented a positive outlook, adding that the country’s financial situation was “clearly stable”. He said the country had to repay $12.27 billion this year and $12.5 billion the next year. He added that these loans were taken by former premier Nawaz Sharif and ex-president Asif Ali Zardari. “We have to repay a total of $55 billion.”
The minister maintained that the textile sector grew by 30% and IT exports were expected to double by the end of the year. Fawad said that income tax had increased by 31% and record production of all crops had been achieved. “This can be used to gauge the growth of the economy.” He also said despite the huge cost, Pakistan was far ahead in terms of importing vaccines. “The way it [the country] has fought the corona[virus] war is unmatched.”
Talking about independent power producers (IPPs), the minister said the country had made payments of Rs134 billion to them. “These payments were due from the time of previous rulers.” Fawad said cotton crop production had increased by 19.5% and rice and sugarcane cultivation had also been record-high recently.
“Wheat production stood at 27.3 metric tonnes and maize 8.5 million tonnes last year.” The minister claimed that because of the new auto policy, the sector had improved and at present, 240,000 vehicles were being manufactured in the country. “The government aims to take this figure to 500,000. This will help develop the entire industry.”
He said that in the past two years, the number of local car manufacturers had increased from five to 15.
“New investments are being made in this sector and the banks have increased financing for vehicle purchases. During the past five months, 111,435 cars were manufactured against 65,998 last year.”
Presenting consumption figures, the minister said electricity and diesel consumption had increased by 13% and 26% respectively.
Fawad said the country’s foreign exchange reserves had increased from $20.3 billion to $25.2 billion, export volume by 29% and private businesses had grown by 44%. “[Around] 0.2 million companies are registered with the SECP [Securities and Exchange Commission of Pakistan], of which 150,000 were formed in the last three years. This gives an idea of how businesses have grown in Pakistan.”
Fawad also said the country would hold a formal session of the Organisation of Islamic Cooperation (OIC) in March. Speaking about matters concerning elections, the minister said Federal Minister for Science and Technology Shibli Faraz and Federal Minister for IT Syed Aminul Haque would meet the chief election commissioner (CEC) over electronic voting machines (EVMs).
He noted that the cabinet had emphasised that the procurement of the machines was the responsibility of the Election Commission of Pakistan (ECP). He further said the cabinet had vowed to hold the next elections through EMVs and also requested the deployment of 3,900 to 4,000 voting machines for local government elections in Islamabad.
The minister said the ECP should issue a tender for this purpose so these machines could be procured in time for the next elections. Talking about regularisation of government employees, the minister said in view of the court’s decisions and the Establishment Division’s recommendations, the cabinet had declared that ad hoc, temporary, contractual and daily wage workers were not entitled to it.
Fawad said the federal cabinet had approved in principle amendments to Section 122 (6) of the Election Act 2017. He added that the apex court had said that the vote of the Senate should be traceable, and in case of allegations of horse trading, the ECP should know where the ballot came from.
“If they [amendments] are approved, it will put an end to horse trading in the Senate.” The minister also said that the cabinet had approved the official nominations for the council of the Institute of Chartered Accountants of Pakistan (ICAP). Following the approval, the ICAP council includes the SECP chairman, State Bank of Pakistan (SBP) Deputy Governor Syed Najam Ali and Feroz Rizvi.
He also said that the cabinet approved the proposed draft of the Islamabad Police Act 2021. To approve and implement the National Food Security Policy, the cabinet had formed a committee. The chairman of the committee would be the prime minister, while the federal ministers for planning, food security, finance and industry; the Federal Board of Revenue chairman, all provincial chief ministers and chief secretaries and secretaries of relevant federal divisions would be its members.
The cabinet also ratified the decisions made at the meetings of its Economic Coordination Committee (ECC) held on December 16 and 17.(With input from agencies)
https://tribune.com.pk/story/2335089/cabinet-defers-rs360b-mini-budget
The government had planned to take the cabinet’s nod to the Supplementary Finance Bill, 2021 to slap highly inflationary Rs360 billion in indirect taxes. It also intended to have the cabinet approve the State Bank of Pakistan Amendment Bill, 2021 to meet prior conditions set by the International Monetary Fund (IMF).
However, the government decided to delay the approval of both the bills after it faced defeat in local government elections in its stronghold – Khyber-Pakhtunkhwa.
The ruling party members attributed the defeat to rising inflation in the country. The federal cabinet, however, gave an ex-post facto approval to the highly expensive -- nearly $4 billion -- short-term foreign commercial loans that the ruling party has taken to artificially inflate the foreign exchange reserves. The move is also intended to meet foreign debt-related obligations.
“The (Supplementary) Finance Bill has been withdrawn from the cabinet meeting agenda,” Federal Information Minister Fawad Chaudhry told The Express Tribune. To a question whether or not the mini-budget had been withdrawn due to political reasons, the minister replied: “it is obvious.”
Fawad said that the bill would again be brought before the cabinet in the next couple of days. Finance Adviser Shaukat Tarin also said the both the SBP Amendment Bill and the Supplementary Finance Bill would be presented to the federal cabinet before the end of this week.
The imposition of roughly Rs360 billion additional taxes and approval of the SBP Amendment Bill are the pre-conditions that the IMF has set for reviving the $6 billion stalled bailout programme. However, it seems that the government is going to miss the date of January 12 for the IMF board meeting, as securing the approval of parliament for both the bills before the end of this month now seems impossible.
A country’s case has to be circulated among the board members at least two weeks before the scheduled board meeting date. The SBP Amendment Bill was cleared by the Cabinet Committee on Legislative Cases (CCLC) after holding two consecutive sessions. The CCLC had made minor changes in the proposed revised draft and cleared it without suggesting any major change, said the sources.
The sources added that some of institutions responsible for national security had expressed their reservations over giving unchecked autonomy to the central bank without any accountability. The information minister said the SBP Amendment Bill was not final yet and the CCLC would make more changes in it.
Subsequently, Law Minister Farogh Naseem had termed some of the clauses that were part of the March bill as “unconstitutional”. In a bid to revive the $6 billion loan programme, the finance ministry had conceded significant ground to the central bank but in return it could not ensure accountability, missing the key objective of legal amendments.
The most crucial objective for any central bank is price stability through explicit targeting of inflation but it that was missing from the SBP Amendment Bill. The IMF has rejected Pakistan’s request to keep a door open for borrowing from the central bank and also did not agree on any meaningful accountability of SBP. The ban on borrowing from the central bank has left the government at the mercy of commercial banks that have in recent weeks demanded an interest rate that is significantly higher than the key policy rate.
The central bank’s profit would also not be transferred 100% to the federal government until the SBP gets cover to back its monetary liabilities. The IMF did not accept Pakistan’s demand to retain the Monetary and Fiscal Policy Coordination Board, which is proposed to be abolished. The IMF also did not accept a proposal that the federal government would give an inflation target to the central bank.
While addressing the news conference, the law minister said the federal cabinet had given the nod to $3.9 billion foreign commercial loans. The finance ministry had taken these loans to repay old ones from December 2020 to November 2021 without prior approval of the cabinet. “Our condition is such that we are taking new loans to repay old ones,” said Fawad.
But he hastily blamed the last governments for the mess. He claimed that that the previous governments took short-term loans which the PTI government was now replacing with long-term ones.The cabinet also gave ex-post facto approval to Dubai Islamic Bank’s loan worth $420 million, Credit Suisse’s $85 million, Industrial and Commercial Bank of China’s $800 million, ECO Trade and Development Bank’s $40 million, Ajman Bank’s $350 million, China Development Bank’s $1 billion, Standard Chartered Bank’s $800 million, Dubai Islamic Bank’s $215 million, and Mashraq Bank’s $270.5 million.
Briefing the media after the meeting of the federal cabinet, Fawad said all economic indicators presented a positive outlook, adding that the country’s financial situation was “clearly stable”. He said the country had to repay $12.27 billion this year and $12.5 billion the next year. He added that these loans were taken by former premier Nawaz Sharif and ex-president Asif Ali Zardari. “We have to repay a total of $55 billion.”
The minister maintained that the textile sector grew by 30% and IT exports were expected to double by the end of the year. Fawad said that income tax had increased by 31% and record production of all crops had been achieved. “This can be used to gauge the growth of the economy.” He also said despite the huge cost, Pakistan was far ahead in terms of importing vaccines. “The way it [the country] has fought the corona[virus] war is unmatched.”
Talking about independent power producers (IPPs), the minister said the country had made payments of Rs134 billion to them. “These payments were due from the time of previous rulers.” Fawad said cotton crop production had increased by 19.5% and rice and sugarcane cultivation had also been record-high recently.
“Wheat production stood at 27.3 metric tonnes and maize 8.5 million tonnes last year.” The minister claimed that because of the new auto policy, the sector had improved and at present, 240,000 vehicles were being manufactured in the country. “The government aims to take this figure to 500,000. This will help develop the entire industry.”
He said that in the past two years, the number of local car manufacturers had increased from five to 15.
“New investments are being made in this sector and the banks have increased financing for vehicle purchases. During the past five months, 111,435 cars were manufactured against 65,998 last year.”
Presenting consumption figures, the minister said electricity and diesel consumption had increased by 13% and 26% respectively.
Fawad said the country’s foreign exchange reserves had increased from $20.3 billion to $25.2 billion, export volume by 29% and private businesses had grown by 44%. “[Around] 0.2 million companies are registered with the SECP [Securities and Exchange Commission of Pakistan], of which 150,000 were formed in the last three years. This gives an idea of how businesses have grown in Pakistan.”
Fawad also said the country would hold a formal session of the Organisation of Islamic Cooperation (OIC) in March. Speaking about matters concerning elections, the minister said Federal Minister for Science and Technology Shibli Faraz and Federal Minister for IT Syed Aminul Haque would meet the chief election commissioner (CEC) over electronic voting machines (EVMs).
He noted that the cabinet had emphasised that the procurement of the machines was the responsibility of the Election Commission of Pakistan (ECP). He further said the cabinet had vowed to hold the next elections through EMVs and also requested the deployment of 3,900 to 4,000 voting machines for local government elections in Islamabad.
The minister said the ECP should issue a tender for this purpose so these machines could be procured in time for the next elections. Talking about regularisation of government employees, the minister said in view of the court’s decisions and the Establishment Division’s recommendations, the cabinet had declared that ad hoc, temporary, contractual and daily wage workers were not entitled to it.
Fawad said the federal cabinet had approved in principle amendments to Section 122 (6) of the Election Act 2017. He added that the apex court had said that the vote of the Senate should be traceable, and in case of allegations of horse trading, the ECP should know where the ballot came from.
“If they [amendments] are approved, it will put an end to horse trading in the Senate.” The minister also said that the cabinet had approved the official nominations for the council of the Institute of Chartered Accountants of Pakistan (ICAP). Following the approval, the ICAP council includes the SECP chairman, State Bank of Pakistan (SBP) Deputy Governor Syed Najam Ali and Feroz Rizvi.
He also said that the cabinet approved the proposed draft of the Islamabad Police Act 2021. To approve and implement the National Food Security Policy, the cabinet had formed a committee. The chairman of the committee would be the prime minister, while the federal ministers for planning, food security, finance and industry; the Federal Board of Revenue chairman, all provincial chief ministers and chief secretaries and secretaries of relevant federal divisions would be its members.
The cabinet also ratified the decisions made at the meetings of its Economic Coordination Committee (ECC) held on December 16 and 17.(With input from agencies)
https://tribune.com.pk/story/2335089/cabinet-defers-rs360b-mini-budget
So far Pakistan is achieving it's Exports targets and as per that exports are likely to hit:
FY21-22 - $31B
FY22-23 - $38B
FY23-24 - $46B
When PTI govt ends, exports should be around $40B which would a MSSIVE achievement, currently high imports are due to $6B worth machinery being imported and this means industrialisation and jobs?
Never forget the most competent govt in Pakistan's history Nawaz-Ishaq conmen left Pakistan with $22B Exports which were actually $23B when they took over and petrol prices were one of lowest in their 5 years and yet left us with $20B CAD and only $7 Billion in reserves (Reserves are now around $23Billion)......THIS WAS A DISASTER that no one sees because their allu, tamatar, kaddu were still cheap.
PTI may even lose elections and lot of people will be dancing i can see but sooner or later people will realise Imran Khan had absolutely NO OTHER CHOICE but to do what he has done.
The suffering of people is real and became worse with COVID and i appreciate average person doesn't understand all this but sickening to see educated lot completely ignoring all this in their hatred for Imran Khan.
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The Executive Committee of the National Economic Council (Ecnec) on Wednesday approved four development schemes at a cost of Rs265 billion, including the construction of the much-delayed Sukkur-Hyderabad motorway – a missing link between Peshawar to Karachi hassle-free road network.
The meeting of Ecnec, chaired by Finance and Revenue Adviser Shaukat Tarin, gave the nod to the revised project for the construction of Hyderabad-Sukkur Motorway on a build-operate-transfer (BOT) contract at a cost of Rs191.5 billion, according to the finance ministry.
The project will be executed by the National Highway Authority (NHA) and envisages the construction of 306lm long, six– lane wide motorway between Hyderabad and Sukkur.
The NHA has received two bids from local parties in its third attempt to award the project after Chinese companies decided to stay away from the bidding process.
In April this year, the Public Private Partnership Authority (PPPA) board had approved the provision of Rs92 billion from the budget and through toll charges to make the Hyderabad-Sukkur motorway project financially viable and attractive for private parties.
The contractor will collect the toll from commuters for 25 years. The first year toll rate will be Rs860 per car that the contractor will be allowed to increase 7.5% annually, according to board’s decision.
The PPPA has authorised the viability gap fund and transaction structure for the Hyderabad-Sukkur motorway project.
The government would also provide Rs43 billion from the budget during the construction period as capital injection and another Rs49 billion as operational viability gap fund with Rs7 billion per annum for the debt service period of seven years, according to the PPPA board decision.
Ecnec also approved the project of Land Acquisition for Lai Expressway and Flood Channel, Rawalpindi worth Rs25 billion with directions that no expenditure will be incurred till the completion of Environment Impact Assessment (EIA) report and its approval from the PPPA Board.
The project will be executed by the Rawalpindi Development Authority (RDA). The project envisages acquisition of 750 kanals of land to provide clear ‘Right of Way’ for the construction of the Lai Nullah Expressway and flood Channel, which would constitute an integral part of the transportation network of Rawalpindi besides flood mitigation and sewage disposal.
The committee also approved the construction of Rawalpindi Ring Road (R3), the main carriageway from Baanth (N-5) to Thallian (M-2) amounting to Rs23.6 billion with the condition to acquire the concurrence of the Planning Commission and the inclusion of the axel load management in the project.
The project has now been rendered to mere a bypass and it does not fit into the definition of a complete ring road project.
Ecnec decided that the Punjab government would finance the project. The RDA would execute it for the construction of a six-lane access-controlled Rawalpindi Ring Road of 38.3km in length.
A few months ago, the route of the project had tainted the image of the government after two cabinet members were found connected with a change in it that escalated the land acquisition cost by Rs10 billion.
However, the Central Development Working Party (CDWP) cleared only the construction component of the project at a cost of Rs23.6 billion.
The Punjab government has already separately revised downwards the land component scheme cost from over Rs16 billion to Rs6.7 billion.
The project is planned to be completed in three years but there is hardly any venture in Pakistan that has been completed on time due to scarcity of resources and poor planning and execution.
The construction of the project had been originally proposed to be taken up on a BOT basis in the public-private partnership (PPP) mode. However, the Punjab government shelved the private financing plan and instead opted to fund the scheme from the taxpayer money.
Ecnec also approved the revised Southern Punjab Poverty Alleviation Project (SPPAP) worth Rs25.2 billion.
Contributions from the International Fund for Agriculture Development (IFAD), Punjab government and beneficiaries will assist the funding of project spread over 10 districts of Punjab.
The committee deferred the Greater Thal Canal Project (Phase-II) with observations to discuss in the next meeting after considering the technical aspect of the project, inclusion of the comments of the Sindh government in the report of CDWP and addressing the reservations of all stakeholders.
Earlier, the CDWP had also deferred the project.
Ecnec also could not reach a consensus on the second phase of Greater Thal Canal project due to opposition from Sindh. The project costing Rs19.3 billion has been planned to provide irrigation water for around 294,110 acres in the districts of Layyah, Bhakkar and Khushab in Punjab.
However, the Sindh government is opposing the project due to its adverse impact on livelihoods in its province. The Punjab government was of the view that it did not require a fresh no-objection certificate (NOC) from the Indus River System Authority (Irsa) for the Greater Thal Canal project.
Under the water accord, allocations have been made for the project for the Kharif season in addition to which surplus flood flows will also be available. The project will help increase crop production from 12,032 tons per annum to 378,270 tons.
https://tribune.com.pk/story/2335253/ecnec-gives-nod-to-four-projects-costing-rs265b
The meeting of Ecnec, chaired by Finance and Revenue Adviser Shaukat Tarin, gave the nod to the revised project for the construction of Hyderabad-Sukkur Motorway on a build-operate-transfer (BOT) contract at a cost of Rs191.5 billion, according to the finance ministry.
The project will be executed by the National Highway Authority (NHA) and envisages the construction of 306lm long, six– lane wide motorway between Hyderabad and Sukkur.
The NHA has received two bids from local parties in its third attempt to award the project after Chinese companies decided to stay away from the bidding process.
In April this year, the Public Private Partnership Authority (PPPA) board had approved the provision of Rs92 billion from the budget and through toll charges to make the Hyderabad-Sukkur motorway project financially viable and attractive for private parties.
The contractor will collect the toll from commuters for 25 years. The first year toll rate will be Rs860 per car that the contractor will be allowed to increase 7.5% annually, according to board’s decision.
The PPPA has authorised the viability gap fund and transaction structure for the Hyderabad-Sukkur motorway project.
The government would also provide Rs43 billion from the budget during the construction period as capital injection and another Rs49 billion as operational viability gap fund with Rs7 billion per annum for the debt service period of seven years, according to the PPPA board decision.
Ecnec also approved the project of Land Acquisition for Lai Expressway and Flood Channel, Rawalpindi worth Rs25 billion with directions that no expenditure will be incurred till the completion of Environment Impact Assessment (EIA) report and its approval from the PPPA Board.
The project will be executed by the Rawalpindi Development Authority (RDA). The project envisages acquisition of 750 kanals of land to provide clear ‘Right of Way’ for the construction of the Lai Nullah Expressway and flood Channel, which would constitute an integral part of the transportation network of Rawalpindi besides flood mitigation and sewage disposal.
The committee also approved the construction of Rawalpindi Ring Road (R3), the main carriageway from Baanth (N-5) to Thallian (M-2) amounting to Rs23.6 billion with the condition to acquire the concurrence of the Planning Commission and the inclusion of the axel load management in the project.
The project has now been rendered to mere a bypass and it does not fit into the definition of a complete ring road project.
Ecnec decided that the Punjab government would finance the project. The RDA would execute it for the construction of a six-lane access-controlled Rawalpindi Ring Road of 38.3km in length.
A few months ago, the route of the project had tainted the image of the government after two cabinet members were found connected with a change in it that escalated the land acquisition cost by Rs10 billion.
However, the Central Development Working Party (CDWP) cleared only the construction component of the project at a cost of Rs23.6 billion.
The Punjab government has already separately revised downwards the land component scheme cost from over Rs16 billion to Rs6.7 billion.
The project is planned to be completed in three years but there is hardly any venture in Pakistan that has been completed on time due to scarcity of resources and poor planning and execution.
The construction of the project had been originally proposed to be taken up on a BOT basis in the public-private partnership (PPP) mode. However, the Punjab government shelved the private financing plan and instead opted to fund the scheme from the taxpayer money.
Ecnec also approved the revised Southern Punjab Poverty Alleviation Project (SPPAP) worth Rs25.2 billion.
Contributions from the International Fund for Agriculture Development (IFAD), Punjab government and beneficiaries will assist the funding of project spread over 10 districts of Punjab.
The committee deferred the Greater Thal Canal Project (Phase-II) with observations to discuss in the next meeting after considering the technical aspect of the project, inclusion of the comments of the Sindh government in the report of CDWP and addressing the reservations of all stakeholders.
Earlier, the CDWP had also deferred the project.
Ecnec also could not reach a consensus on the second phase of Greater Thal Canal project due to opposition from Sindh. The project costing Rs19.3 billion has been planned to provide irrigation water for around 294,110 acres in the districts of Layyah, Bhakkar and Khushab in Punjab.
However, the Sindh government is opposing the project due to its adverse impact on livelihoods in its province. The Punjab government was of the view that it did not require a fresh no-objection certificate (NOC) from the Indus River System Authority (Irsa) for the Greater Thal Canal project.
Under the water accord, allocations have been made for the project for the Kharif season in addition to which surplus flood flows will also be available. The project will help increase crop production from 12,032 tons per annum to 378,270 tons.
https://tribune.com.pk/story/2335253/ecnec-gives-nod-to-four-projects-costing-rs265b
Bewal Express
Test Star
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What makes you think these badniyaat losers are educated. None of them seem to have the faintest idea of anything economic and [MENTION=131701]Mamoon[/MENTION] didn't even know how the exchange rate was determined, [MENTION=135038]Major[/MENTION] wanted subsidies on petrol but didn't know where the money should come from? If these are the guys you are referring to then you are sadly mistaken
Syed1
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Sadly 90% of even the educated lot in Pakistan has zero idea how economics works. I was having a chat with a guy who kept saying why doesn't IK not just print more money and give it to the poor/middle class to offset the inflation. I didn't know whether to laugh or cry. Basic economics should be taught as a compulsory subject in grades 9 to 12.
Where are you getting these export numbers from? Textile exports have increased a bit due to massive depreciation of the PKR which has made it cheaper for Western firms to source their garment production in Pakistan compared to other textiles exporting countries like Bangladesh, China, India etc.
Textile exports can only increase by a small amount as there are many countries competing for the same production.
Sustained growth in exports requires the development of modern industries, which has gone backwards during IK's tenure. No FDI, no development of new industries, rather stuff which makes foreign investors run away like support for the Taliban and regular tirades against Modi/India.
Totally delusional to think textile driven exports will reach $46 billion by 2024.
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Major
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the currency has devalue soo much and yet the exports have not rised as it was expected.
Under policy failiure by the PTI
Bewal Express
Test Star
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The PTI let the Rp float, can you tell us what they should have done if they didn't do this. I think you and [MENTION=131701]Mamoon[/MENTION] are not sure how a currency value is determined.
Bewal Express
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Where did he say the textile exports will reach $46bn? We saw your "expertise" on how PK brought LNG. You then spent weeks back tracking.
I can see what your main concern is there so no point wasting time because obviously speaking against Modi is such a big crime right
I can see what your main concern is there so no point wasting time because obviously speaking against Modi is such a big crime right
You are missing the point. It is not a question of whether speaking against Modi is a crime or not.
If the leader of a country keeps trashing the leader of a neighboring country ("small man", "coward", "Hitler", "Nazi" etc.) then investors wonder if he is stable and if he can provide a stable government.
There are many alternative countries for investors who want stability. The fact is that Pakistan's export sector is falling behind other countries during IK's term.
There is no point in wishful thinking like $46 billion exports in 3 years. To make that happen the Pakistani government must provide better security for investors and get its army out of its domestic economy and foreign policy.
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Not sure what is policy failure there? Export targets or Depreciation of currency?
If it's Export numbers then actual recorded export numbers in November 21 were $2.9B and at this rate the total FY figures should be around $35B? Let's suppose that's not the case and even if we achieve $32B then this is FAR better than NO INCREASE in 5 years of EXPERT COMPETNET PMLN government?
And if you are saying devaluation is a bad policy then this is NOT policy but the reality of where we stand. The admission of Dar's intentional disaster was acknowledged by Miftah (PMLN's own finance minister) that we could not afford to continue.
An average person still thinks Nawaz Sharif ko Dollar control karna aata tha Imran Khan ko nahi
Oh bhai Rserves ki vaat laga k aur excessive borrow kar k rakh lou Dollar 100 ka aur export ki kya zaroorat hai jab import sasti parti hai.......Corruption choro isi gunaah pe in frauds ko kabhi dobaara nahi aana chaayie laikin jahilon ko kon samjhaye.Sure, people wonder if Imran Khan is stable or not because he is calling out a bigot and extremist regime that has tarnished image of India across the world. Do you really think people are stupid that they dont know what Modi is? It's due to India's Economy and business opportunities that they do not call this out but we all know how they even banned this bigot's entry to their countries before they were forced by diplomatic norms.
Lots of world leaders can be accused of various things. Bush started a war in Iraq under false pretenses in which half a million died. Obama stealthily helped start the Syrian, Libyan and Ukrainian wars. The Saudi royal family violates human rights regularly. Do you hear other country leaders abusing them?
The one country leader other than IK who regularly abuses others in North Korea's Kim. And we all know how much investment his country is getting
Investors look for mature leaders, and they have many options.
Lots of world leaders can be accused of various things. Bush started a war in Iraq under false pretenses in which half a million died. Obama stealthily helped start the Syrian, Libyan and Ukrainian wars. The Saudi royal family violates human rights regularly. Do you hear other country leaders abusing them?
The one country leader other than IK who regularly abuses others in North Korea's Kim. And we all know how much investment his country is getting
Investors look for mature leaders, and they have many options.
This is why i said Modi bhakt think world revolves around Modi so no point arguing about why Imran Khan calls out Modi's bigotry.
I would think that the important thing for Pakistanis would be what can lead to increased FDI and economic development for their country rather that what Modi "bhakts" have been doing.
Bewal Express
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Not sure what is policy failure there? Export targets or Depreciation of currency?
If it's Export numbers then actual recorded export numbers in November 21 were $2.9B and at this rate the total FY figures should be around $35B? Let's suppose that's not the case and even if we achieve $32B then this is FAR better than NO INCREASE in 5 years of EXPERT COMPETNET PMLN government?
And if you are saying devaluation is a bad policy then this is NOT policy but the reality of where we stand. The admission of Dar's intentional disaster was acknowledged by Miftah (PMLN's own finance minister) that we could not afford to continue.
An average person still thinks Nawaz Sharif ko Dollar control karna aata tha Imran Khan ko nahi
Brother, trying to explain basic economics these guys whose mind and niyaat aren't clean is a waste of time
If the core argument is based on Pakistan isn't able to improve modern industries because IK call out a bigot a bigot within the context then why is anyone wasting their time with that person?
It seem the person is more upset about calling out his 'emporer' for he is, the bigot and anti-minority, particularly anti-Muslims, than to discuss the actual topic at hand.
Modi's love by bhakths, along with Pakistan need modern industries, is being played out and done played, as if no one knows and understand the simple fact, Pakistan will and in need of Modern industries and NO!, calling out Modi for what he is, not the reason for Pakistan inability to get modern industries in last 3 years lol
Do better.
I am sure there is thread where one can daily express their love for Modi. lol
It seem the person is more upset about calling out his 'emporer' for he is, the bigot and anti-minority, particularly anti-Muslims, than to discuss the actual topic at hand.
Modi's love by bhakths, along with Pakistan need modern industries, is being played out and done played, as if no one knows and understand the simple fact, Pakistan will and in need of Modern industries and NO!, calling out Modi for what he is, not the reason for Pakistan inability to get modern industries in last 3 years lol
Do better.
I am sure there is thread where one can daily express their love for Modi. lol
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I didn’t say IK’s childish behavior towards Modi is the only reason, I also gave other important reasons for IK’s failure to set Pakistan on the path of development of modern industries, notably 1) his support for the Taliban which has antagonized Western governments, 2) his inability to get the Army/ISI to give up their jihadi assets which has not removed the perception in the West of Pakistan being a terrorist supporting nation and results in it remaining on FATF lists etc. 3) inability to get the military out of the economy and end its control of foreign policy etc.
Bewal Express
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Most of these are Hindutuva points made by Ind trolls. You are a victim of the Srivastava group grooming and your mindset is such.
It is as if reading the script of Bakht influenced Indian media.
All of the above points had been countered in detail on this forum so I will not go on typing the similar counters. I let you be the loudest.
Pakistan not developing modern industries has to do with not providing right political atmosphere and due to previously corrupt governments and also due to not having infrastructure along with lack of education to acquired modern industries.
It has absolutely nothing to do with IK and Pakistani calling out Modi for who he is, a bigot, who thrive on anti-Muslim narrative, particularly during election times in India.
Antagonizing the west is temporary, securing the border supersede antagonism of the west, and that has nothing to do with Ik government not able to construct modern industries over night. lol
FATF is a political tool and it will continue to be used against Pakistan as long as Pakistan continue to support China and CPEC, it has nothing to do with calling out Modi for who he is, a bigot.
But keep repeating the script of Indian media.
transparent opacity
Tape Ball Star
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Finance ministry paints rosy economic picture
ISLAMABAD:
The Ministry of Finance on Monday painted a rosy picture of the country’s economy estimating the average monthly growth at around 5% during the first five months of the current fiscal year 2021-22 despite inflationary pressures and consequent tightening of policies.
According to the average Monthly Economic Indicator (MEI) report issued by the finance ministry, there is demand for Pakistani exports by the trading partners despite the spread of Omicron – the new Covid-19 variant. “But we should also not ignore the impending risks including the concerns of the policymakers about the inflationary effects and the resulting policy response,” it cautioned.
However, it said the inflation may ease out in the coming months due to the declining commodity prices in the global market. In addition, relief may also come from continuous government efforts to soften food prices in the local markets by following appropriate fiscal and monetary policies.
While these developments and policies may keep the monthly price dynamics in check, the current stress on the trade balance is expected to soften, easing exchange rate pressure and subsequently stabilising the month on month (MoM) inflation.
The MEI is based on combining monthly data of indicators that are correlated with the gross domestic product (GDP) at constant prices. “Since March 2021, the MEI is on a higher level as compared to the previous months.”
This is based on observed favourable movements in macroeconomic high frequency indicators such as growth in LSM, recovery in Pakistan's main trading partners and strong growth in imports of capital goods. The momentum in the economic dynamism observed in recent months supported economic activity in November.
According to balance of payment data, exports of goods and services increased by around 13 per cent in November as compared to October.
They have now settled well above the $3 billion mark and are expected to climb further in coming months so as to reach a new higher level. This strong export performance is the result of several positive factors.
First, although the cyclical position in the main trading partners (as witnessed by the CLI) seems to stabilise, the underlying growth trend in those countries remains very strong, following the recovery in their potential output growth.
Second, Pakistan's real effective exchange rate has been improving significantly in recent months.
Third, the domestic economic dynamism remains strong.
Fourth, specific government policies to stimulate exports are bearing fruit, it said, adding that the main risk factor here is the appearance of a new Covid-19 variant, of which the effects on economic activity are still unknown.
The data indicated that imports of goods and services increased about 5% in November compared to October.
Strong domestic economic dynamism requires imported energy, capital goods and intermediate goods, necessary in the production process. Further, recent increase in international commodity prices have inflated the cost of these imported goods.
However, imports may settle at lower levels gradually in the coming months, it predicted. “Imports are indeed expected to react to higher domestic interest rates, given the historically observed negative interest rate effect on import demand.”
The government continues to implement measures to curb unnecessary imports and to supply domestic alternatives in some markets, especially food products. Also, the baseline scenario is based on a downward correction of international commodity prices. The report added that on the basis of these events, the trade deficit will stabilise in coming months.
The expected developments in export and import activities imply that the trade balance may gradually improve in coming months and settle down at significantly lower levels in the second half of the current fiscal.
Assuming stable remittance inflows, the expected improvement in the trade balance will be reflected in declining current account deficits, such that these deficits remain manageable and finance able.
The government's fiscal consolidation efforts are paying off in terms of improved fiscal accounts. During Jul-Oct FY2022, the growth in net federal revenues outpaced the growth in expenditures. Resultantly, the fiscal deficit has been brought down to 1.1 per cent of GDP during the first four months of FY2022 against 1.7 per cent of GDP in the same period last year.
With prudent expenditure management and an effective revenue mobilisation strategy, it is expected that the overall fiscal deficit would remain within the reasonable level.
The Federal Board of Revenue tax revenues are performing remarkably well and continue to surpass its revenue target during the first five months of the current fiscal year.
It showed that the FBR was well on its way to achieve the assigned target for FY2022.
This is evidenced by the fact that net federal revenue receipts climbed by 17.4% to Rs 1.2 trillion in July-October period- up from Rs 1.1 trillion during the same period last year. There was a significant rise of 36.7% increase in FBR tax and 5.4% increase in non-tax collection.
Total expenditures, on the other hand, increased by 11.7 to Rs 2.2 trillion in July- October of this fiscal year, compared to nearly Rs2 trillion last year. The increase has been witnessed owing to 8.5% increase in current expenditures and 55.6% growth in PSDP spending.
Consequently, the overall fiscal deficit reduced to 1.1% of GDP Rs587 billion in the first four months of FY2022, down from 1.7% or Rs775 billion recorded in the comparable period of last year. However, the ministry did not give the federal budget deficit figure, which is the real barometer of the public finances.
https://tribune.com.pk/story/2335976/finance-ministry-paints-rosy-economic-picture
ISLAMABAD:
The Ministry of Finance on Monday painted a rosy picture of the country’s economy estimating the average monthly growth at around 5% during the first five months of the current fiscal year 2021-22 despite inflationary pressures and consequent tightening of policies.
According to the average Monthly Economic Indicator (MEI) report issued by the finance ministry, there is demand for Pakistani exports by the trading partners despite the spread of Omicron – the new Covid-19 variant. “But we should also not ignore the impending risks including the concerns of the policymakers about the inflationary effects and the resulting policy response,” it cautioned.
However, it said the inflation may ease out in the coming months due to the declining commodity prices in the global market. In addition, relief may also come from continuous government efforts to soften food prices in the local markets by following appropriate fiscal and monetary policies.
While these developments and policies may keep the monthly price dynamics in check, the current stress on the trade balance is expected to soften, easing exchange rate pressure and subsequently stabilising the month on month (MoM) inflation.
The MEI is based on combining monthly data of indicators that are correlated with the gross domestic product (GDP) at constant prices. “Since March 2021, the MEI is on a higher level as compared to the previous months.”
This is based on observed favourable movements in macroeconomic high frequency indicators such as growth in LSM, recovery in Pakistan's main trading partners and strong growth in imports of capital goods. The momentum in the economic dynamism observed in recent months supported economic activity in November.
According to balance of payment data, exports of goods and services increased by around 13 per cent in November as compared to October.
They have now settled well above the $3 billion mark and are expected to climb further in coming months so as to reach a new higher level. This strong export performance is the result of several positive factors.
First, although the cyclical position in the main trading partners (as witnessed by the CLI) seems to stabilise, the underlying growth trend in those countries remains very strong, following the recovery in their potential output growth.
Second, Pakistan's real effective exchange rate has been improving significantly in recent months.
Third, the domestic economic dynamism remains strong.
Fourth, specific government policies to stimulate exports are bearing fruit, it said, adding that the main risk factor here is the appearance of a new Covid-19 variant, of which the effects on economic activity are still unknown.
The data indicated that imports of goods and services increased about 5% in November compared to October.
Strong domestic economic dynamism requires imported energy, capital goods and intermediate goods, necessary in the production process. Further, recent increase in international commodity prices have inflated the cost of these imported goods.
However, imports may settle at lower levels gradually in the coming months, it predicted. “Imports are indeed expected to react to higher domestic interest rates, given the historically observed negative interest rate effect on import demand.”
The government continues to implement measures to curb unnecessary imports and to supply domestic alternatives in some markets, especially food products. Also, the baseline scenario is based on a downward correction of international commodity prices. The report added that on the basis of these events, the trade deficit will stabilise in coming months.
The expected developments in export and import activities imply that the trade balance may gradually improve in coming months and settle down at significantly lower levels in the second half of the current fiscal.
Assuming stable remittance inflows, the expected improvement in the trade balance will be reflected in declining current account deficits, such that these deficits remain manageable and finance able.
The government's fiscal consolidation efforts are paying off in terms of improved fiscal accounts. During Jul-Oct FY2022, the growth in net federal revenues outpaced the growth in expenditures. Resultantly, the fiscal deficit has been brought down to 1.1 per cent of GDP during the first four months of FY2022 against 1.7 per cent of GDP in the same period last year.
With prudent expenditure management and an effective revenue mobilisation strategy, it is expected that the overall fiscal deficit would remain within the reasonable level.
The Federal Board of Revenue tax revenues are performing remarkably well and continue to surpass its revenue target during the first five months of the current fiscal year.
It showed that the FBR was well on its way to achieve the assigned target for FY2022.
This is evidenced by the fact that net federal revenue receipts climbed by 17.4% to Rs 1.2 trillion in July-October period- up from Rs 1.1 trillion during the same period last year. There was a significant rise of 36.7% increase in FBR tax and 5.4% increase in non-tax collection.
Total expenditures, on the other hand, increased by 11.7 to Rs 2.2 trillion in July- October of this fiscal year, compared to nearly Rs2 trillion last year. The increase has been witnessed owing to 8.5% increase in current expenditures and 55.6% growth in PSDP spending.
Consequently, the overall fiscal deficit reduced to 1.1% of GDP Rs587 billion in the first four months of FY2022, down from 1.7% or Rs775 billion recorded in the comparable period of last year. However, the ministry did not give the federal budget deficit figure, which is the real barometer of the public finances.
https://tribune.com.pk/story/2335976/finance-ministry-paints-rosy-economic-picture
Bewal Express
Test Star
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Some very good news, but as always its the price of oil and gas that is holding us back. The growth rate of 5% is excellent in the current economic climate and if the oil price drops we could start to hit over 6%. Inflation remains a problem, and to tackle this the competition commission must start to use some strong measures so that the local mafias are tackled and profiteering is stopped
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Greenstorm
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PTI will easily win in 2023. Even those who are complaining know it in their heart that they are paying for their own misdeeds i.e. voting for crooks in the past. Thats the reason why you don't see massive protests on streets (used to be norm during previous governments) despite high inflation.
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The federal cabinet on Tuesday approved the State Bank of Pakistan (SBP) amendment bill to give absolute autonomy to the central bank in a bid to qualify for the $1 billion loan, but deferred the approval of Rs360 billion mini-budget for the second time in a week.
Headed by Prime Minister Imran Khan, the cabinet cleared the revised draft of the SBP amendment bill, 2021, Information Minister Fawad Chaudhry confirmed after the meeting.
The bill has been approved to bring amendments in the SBP Act of 1956 under one of the conditions of the International Monetary Fund (IMF) and on the desire of the SBP governor.
Many of the clauses that the federal government had earlier termed “unconstitutional” are still part of the revised bill after the IMF refused to budge from its position.
Read: Military terms NSP ‘important milestone’ in meeting emerging challenges
However, the government again deferred the approval of the highly inflationary Rs360 billion mini-budget amid strong criticism against the Ministry of Finance due to increasing inflation.
Some cabinet members from Khyber-Pakhtunkhwa objected to bringing the mini-budget after the Pakistan Tehreek-e-Insaf faced defeat in the local bodies’ elections.
“As per law, once the cabinet approves the budget, it has to be transmitted to the National Assembly without delay. Since there was no NA session, it was deferred,” Fawad Chaudhry told The Express Tribune when asked about the reason behind deferring the mini-budget.
It was the second time in the past one week that the federal cabinet did not approve the mini-budget.
The information minister said that the mini-budget would be approved within this week by calling a special cabinet meeting. However, sources said the ruling party was facing two major challenges – how to justify unleashing second round of inflation by imposing 17% sales tax on 144 items – ranging from contraceptives to children’s milk, red chilies and salt. The other items include all dairy products, imported vegetables and food items sold at bakeries.
The second issue that the government is facing is convincing the National Assembly members from the PTI and allies to vote for the highly inflationary budget.
Sources said the government may still try to convene a special cabinet meeting on Thursday to approve the budget and then present it in the National Assembly the same day.
SBP bill
Despite concerns expressed by many quarters, independent economists and media, the federal cabinet on Tuesday finally approved the revised draft of the SBP amendment bill.
The IMF wanted to amend the SBP bill to give more autonomy to the central bank. The draft of the SBP bill showed that the federal government remained unsuccessful in convincing the IMF to explicitly set inflation target and ensure accountability of the central bank governor for missing the goal.
The government has introduced the price stability definition, which is, “the maintenance of low and stable inflation guided by the government’s medium-term inflation target”. However, the words “low, stable and target” have not been defined anywhere in the revised bill.
The federal government also failed to convince the IMF to let it borrow from the central bank despite earlier terming the proposed clause of banning the borrowing as “unconstitutional”.
The central bank shall not extend any direct credit to or guarantee any obligations of the government, or any government-owned entity or any other public entity, according to a clause of the revised draft, which is similar to the one the cabinet approved in March this year.
This is a major source of concern for many people, as the country has been left at the mercy of commercial banks. There has already been a complete ban on government borrowing from the SBP since July 2019 and yet there is a double-digit growth in currency in circulation and inflation has also remained out of control.
The government has again introduced a clause to retire the overdraft by the Pakistan Railways. According to the bill, the railways overdraft will be converted into long-term debt of eight-year duration.
Read More: 'BRI represents shared interests of Asian countries'
The government could not ensure accountability of the central bank and in the name of accountability, “the governor shall submit an annual report before parliament regarding the achievement of the bank’s objectives, the conduct of monetary policy, state of the economy and the financial system”, according to the bill. Some ground has been retrieved in the case of removal of the SBP governor.
As against the earlier proposal that the governor could only be removed on misconduct if it was proven in a court of law, now the federal government “may remove” the governor, or a deputy governor, if he is guilty of gross misconduct; or is incapable of properly performing the duties of his office by reason of physical or mental incapacity.
The governor will be appointed for a period of five years and his term can be extended for another five years.
The finance minister’s powers to appoint a deputy governor have been further curtailed when compared with the March 2021 bill.
Now, “early consultation” between the finance minister and the SBP governor will not be required and the federal government will appoint a deputy governor from a panel of three recommended by the governor, in order of merit.
The Finance Division secretary has been proposed to be retained on the board but “without the right to vote”.
The government was also unable to convince the IMF to separate the positions of the SBP governor and the chairperson of the board. It further remained unsuccessful to persuade the IMF to allow it to retain the Monetary and Fiscal Policies Coordination Board, which has now proposed to be abolished.
The clauses related to functional and institutional autonomy proposed in March have also largely remained unchanged. The government will also consult the SBP prior to the introduction of any bill by the federal government in parliament which may have a bearing on the functions of the bank.
The government has withdrawn the proposed immunity from NAB and FIA laws to the governors, deputy governors, board directors, including sitting ones and those who have already retired or completed their terms of the offices.
The governor will have to appoint his successor during his foreign visits in writing.
https://tribune.com.pk/story/2336133/cabinet-okays-sbp-bill-defers-mini-budget
Headed by Prime Minister Imran Khan, the cabinet cleared the revised draft of the SBP amendment bill, 2021, Information Minister Fawad Chaudhry confirmed after the meeting.
The bill has been approved to bring amendments in the SBP Act of 1956 under one of the conditions of the International Monetary Fund (IMF) and on the desire of the SBP governor.
Many of the clauses that the federal government had earlier termed “unconstitutional” are still part of the revised bill after the IMF refused to budge from its position.
Read: Military terms NSP ‘important milestone’ in meeting emerging challenges
However, the government again deferred the approval of the highly inflationary Rs360 billion mini-budget amid strong criticism against the Ministry of Finance due to increasing inflation.
Some cabinet members from Khyber-Pakhtunkhwa objected to bringing the mini-budget after the Pakistan Tehreek-e-Insaf faced defeat in the local bodies’ elections.
“As per law, once the cabinet approves the budget, it has to be transmitted to the National Assembly without delay. Since there was no NA session, it was deferred,” Fawad Chaudhry told The Express Tribune when asked about the reason behind deferring the mini-budget.
It was the second time in the past one week that the federal cabinet did not approve the mini-budget.
The information minister said that the mini-budget would be approved within this week by calling a special cabinet meeting. However, sources said the ruling party was facing two major challenges – how to justify unleashing second round of inflation by imposing 17% sales tax on 144 items – ranging from contraceptives to children’s milk, red chilies and salt. The other items include all dairy products, imported vegetables and food items sold at bakeries.
The second issue that the government is facing is convincing the National Assembly members from the PTI and allies to vote for the highly inflationary budget.
Sources said the government may still try to convene a special cabinet meeting on Thursday to approve the budget and then present it in the National Assembly the same day.
SBP bill
Despite concerns expressed by many quarters, independent economists and media, the federal cabinet on Tuesday finally approved the revised draft of the SBP amendment bill.
The IMF wanted to amend the SBP bill to give more autonomy to the central bank. The draft of the SBP bill showed that the federal government remained unsuccessful in convincing the IMF to explicitly set inflation target and ensure accountability of the central bank governor for missing the goal.
The government has introduced the price stability definition, which is, “the maintenance of low and stable inflation guided by the government’s medium-term inflation target”. However, the words “low, stable and target” have not been defined anywhere in the revised bill.
The federal government also failed to convince the IMF to let it borrow from the central bank despite earlier terming the proposed clause of banning the borrowing as “unconstitutional”.
The central bank shall not extend any direct credit to or guarantee any obligations of the government, or any government-owned entity or any other public entity, according to a clause of the revised draft, which is similar to the one the cabinet approved in March this year.
This is a major source of concern for many people, as the country has been left at the mercy of commercial banks. There has already been a complete ban on government borrowing from the SBP since July 2019 and yet there is a double-digit growth in currency in circulation and inflation has also remained out of control.
The government has again introduced a clause to retire the overdraft by the Pakistan Railways. According to the bill, the railways overdraft will be converted into long-term debt of eight-year duration.
Read More: 'BRI represents shared interests of Asian countries'
The government could not ensure accountability of the central bank and in the name of accountability, “the governor shall submit an annual report before parliament regarding the achievement of the bank’s objectives, the conduct of monetary policy, state of the economy and the financial system”, according to the bill. Some ground has been retrieved in the case of removal of the SBP governor.
As against the earlier proposal that the governor could only be removed on misconduct if it was proven in a court of law, now the federal government “may remove” the governor, or a deputy governor, if he is guilty of gross misconduct; or is incapable of properly performing the duties of his office by reason of physical or mental incapacity.
The governor will be appointed for a period of five years and his term can be extended for another five years.
The finance minister’s powers to appoint a deputy governor have been further curtailed when compared with the March 2021 bill.
Now, “early consultation” between the finance minister and the SBP governor will not be required and the federal government will appoint a deputy governor from a panel of three recommended by the governor, in order of merit.
The Finance Division secretary has been proposed to be retained on the board but “without the right to vote”.
The government was also unable to convince the IMF to separate the positions of the SBP governor and the chairperson of the board. It further remained unsuccessful to persuade the IMF to allow it to retain the Monetary and Fiscal Policies Coordination Board, which has now proposed to be abolished.
The clauses related to functional and institutional autonomy proposed in March have also largely remained unchanged. The government will also consult the SBP prior to the introduction of any bill by the federal government in parliament which may have a bearing on the functions of the bank.
The government has withdrawn the proposed immunity from NAB and FIA laws to the governors, deputy governors, board directors, including sitting ones and those who have already retired or completed their terms of the offices.
The governor will have to appoint his successor during his foreign visits in writing.
https://tribune.com.pk/story/2336133/cabinet-okays-sbp-bill-defers-mini-budget
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- Oct 2, 2004
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Interior Minister Sheikh Rashid said on Wednesday that Prime Minister Imran Khan's agenda is to end inflation, hoping that he would end it by the fifth year.
Addressing a press conference in Rawalpindi, the interior minister said that every political party wanted the establishment’s backing but the good thing is that the establishment supports this elected government.
“Imran Khan will complete five years. Nothing is going to happen. This is the year of local body elections whereas the fifth year will be of national elections. It normally takes a year to address old grievances. Our allies might be angry but at least they are not with the opposition,” Rashid said.
Referring to the rumours of former premier Nawaz Sharif's return, the interior minister said that some say he is returning and some say he was not. "It doesn't matter if he returns or not," the minister said as he downplayed talks of the former premier's return.
Rashid further urged the opposition parties to reconsider their long march date and shift it to March 30 instead of March 23 (Pakistan Day).
“Guests are coming on March 23 and for the first time JS-10 fighter jet would join the flying parade (in an answer to India’s) Raphael,” he said.
The minister added that the occupation mafia was strong in Pakistan and we did not allow it to get stronger
On December 26, Rashid while taking a dig at the PML-N supremo offered to pay for his air ticket and also issue him a visa if the former prime minister was willing to return to Pakistan while the leadership of the party claimed that its leader’s possible return to the country had sent “alarm bells ringing” for the government.
Addressing a news conference in Karachi, Rashid said Nawaz, who had been living in London since 2019, went abroad on the pretext of medical treatment but “had not consulted any doctor since he is healthy”.
His statement came after PML-N leader Ayaz Sadiq's prediction that the country’s political arena would soon witness a “major event” -- which has sent many in a tizzy, fuelling speculations as to what was implied in the politician’s cryptic statement.
Addressing a press conference in Rawalpindi, the interior minister said that every political party wanted the establishment’s backing but the good thing is that the establishment supports this elected government.
“Imran Khan will complete five years. Nothing is going to happen. This is the year of local body elections whereas the fifth year will be of national elections. It normally takes a year to address old grievances. Our allies might be angry but at least they are not with the opposition,” Rashid said.
Referring to the rumours of former premier Nawaz Sharif's return, the interior minister said that some say he is returning and some say he was not. "It doesn't matter if he returns or not," the minister said as he downplayed talks of the former premier's return.
Rashid further urged the opposition parties to reconsider their long march date and shift it to March 30 instead of March 23 (Pakistan Day).
“Guests are coming on March 23 and for the first time JS-10 fighter jet would join the flying parade (in an answer to India’s) Raphael,” he said.
The minister added that the occupation mafia was strong in Pakistan and we did not allow it to get stronger
On December 26, Rashid while taking a dig at the PML-N supremo offered to pay for his air ticket and also issue him a visa if the former prime minister was willing to return to Pakistan while the leadership of the party claimed that its leader’s possible return to the country had sent “alarm bells ringing” for the government.
Addressing a news conference in Karachi, Rashid said Nawaz, who had been living in London since 2019, went abroad on the pretext of medical treatment but “had not consulted any doctor since he is healthy”.
His statement came after PML-N leader Ayaz Sadiq's prediction that the country’s political arena would soon witness a “major event” -- which has sent many in a tizzy, fuelling speculations as to what was implied in the politician’s cryptic statement.
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The federal cabinet will on Thursday (today) take up Rs360 billion mini-budget for approval to tax around 144 goods at a 17% rate.
Prime Minister Imran Khan has convened a special cabinet meeting at noon to seek his ministers’ nod for the mini-budget to the tune of Rs360 billion as part of the International Monetary Fund (IMF) condition for revival of the stalled bailout programme.
After the cabinet meeting, the premier will brief the PTI parliamentarians and then Finance Minister Shaukat Tarin will present the mini-budget in the National Assembly at 4 pm today.
The details of the mini-budget showed that once passed by the National Assembly the budget could increase mal-nutrition and stunting in the country due to an increase in the cost of goods that are critical for nourishment.
Sources in the Ministry of Finance said that about 144 goods that are currently either completely exempted from General Sales Tax (GST) or are being taxed at 5% to 12% rates will now be taxed at 17%.
The actual revenue impact from slapping GST on 144 items will be far higher than the estimated Rs352 billion, as many items will be taxed for the first time and their revenue impacts were not available with the Federal Board of Revenue (FBR). Another roughly Rs7 billion will be collected by increasing the income tax rate on mobile phone calls from 10% to 15%.
The sources said that the zero-rating available on imports and supplies of goods and raw materials for the preparation of milk for infants will be withdrawn and be taxed at 17% to raise Rs9 billion revenues annually. Similarly, preparations suitable for infants put up for sale that are currently exempted will be taxed at 17% to raise another over Rs6 billion annual revenue. The net revenue from taxing infant milk is estimated at over Rs15 billion.
The supplies to duty-free shops will be taxed at 17% and since they will be taxed for the first time there are no revenue estimates from the measure. The GST rate on cars above 850cc will go up to 17%, tax on import of electric vehicles in CBU conditions will increase from 5% to 17%, business-to-business transactions will go up from 16.9% to 17%.
In a major proposal, which will also fetch the highest amount of revenue under any head, the government has proposed to slap 17% GST on raw materials for pharmaceutical products for Rs45 billion revenues. This includes Rs30 billion at the import stage and Rs15 billion at the local stage. But the FBR says that raw material will be zero-rated and the board will give refunds.
The premixes of growth stunting will be taxed at 17%, which is contrary to PM Imran’s vision to end stunting.
Bread prepared in bakeries, restaurants, food chains and shops will be taxed at a 17% rate for nearly Rs5 billion annual revenue, while the bread prepared in tandoors (naan, chapatti and sheermal) shall remain exempt. Foodstuff cooked served in messes will be taxed at a 17% rate as well.
Tax on prepared foodstuff and sweetmeats supplied by restaurants, bakeries, caterers and sweetmeat shops will increase from 7.5% to 17%, making hoteling expensive.
The imported edible vegetable will be taxed for Rs7 billion revenues. Red chilies not sold in retail packaging will also be taxed. Cereals and products of the milling industry will be taxed for Rs5 billion revenues and local supply of rice, wheat and meslin flour will remain exempt.
The matchboxes will also be taxed at 17%, whey, excluding that sold in retail packing under a brand name, and sausages and similar products of poultry meat or meat offal, excluding sold in retail packing under a brand name or trademark, are also on the list to tax at 17%.
The tax rate on flavoured milk sold in retail packing under a brand name will be increased from 10% to 17% for over Rs1 billion revenue. The rate on yogurt sold in retail packing under a brand name will go up from 10% to 17%, the rates on cheese, butter, cream, desi ghee, whey, milk and cream sold in retail packing under a brand name will also increase from 10% to 17%.
Machinery and equipment related to dairy products will now be taxed at 17% as against the existing 5% rate. Mobile phones will also be taxed at a standard 17% rate.
Supplies made from retail outlets as are integrated with the Board’s computerized system that are currently taxed at 10% will now be taxed at 16%. Frozen prepared or preserved sausages tax rate will go up from 8% to 17%,
Seeds, fruits and spores of a kind used for sowing are proposed to be taxed for Rs4 billion annual revenue. The 17% GST on Cinchona bark will get a minimum of Rs4 billion revenue every year. The import of sugarcane will also attract a 17% tax.
The import of newsprint, newspapers, journals, periodicals, books but excluding directories will be taxed at 17% for Rs1.5 billion annual revenue but their local supply of newspapers will remain exempt. Promotional and advertising material will be taxed at 17%.
Goods imported by or donated to federal and provincial hospitals will be taxed at 17%. Similarly, goods supplied to hospitals run by the federal or provincial governments will be taxed for Rs1.5 billion annual revenue.
Goods imported by various agencies of the United Nations, diplomats, diplomatic missions will also be taxed at the rate of 17%. The annual revenue potential at the current import volume is Rs300million. Goods received as gift or donation from a foreign government or organisation will be taxed at 17%.
Import of all goods received, in the event of a natural disaster will also be subject to tax. Articles imported through the post as unsolicited gifts will be subject to 17% tax.
Contraceptives and accessories will be taxed for Rs200million in revenue. Sewing machines will be taxed at 17% rate.
The import of live animals and live poultry will be taxed at 17% for Rs700 million revenue but its local supply will remain exempt. The meat of bovine animals, sheep and goat to be taxed but their local supply will remain exempt. The import of fish and crustaceans, excluding live fish to be taxed but local supply will remain exempt.
Eggs, including those for hatching to be taxed for Rs2 billion in revenue but local supply will remain exempt. Import of live plants to be taxed and local supply will remain exempt.
Uncooked poultry meat is on the list to be taxed for a minimum of Rs2 billion in revenue. The cottonseed is proposed to be taxed at 17% GST for Rs3 billion annual revenue. The iodized salt will be taxed for Rs300 million annual revenue.
The rate on ingredients of poultry feed, cattle feed, except soya bean meal will go up form 10% to 17%. Taxes on tillage and seed bed preparation equipment, seeding and planting, irrigation, drainage and agrochemical preparation, harvesting, threshing and storage equipment and post-harvest handling equipment will go up from 5% to 17%.
The GST on the machinery of the poultry sector will go up from 7% to 17%, multimedia projects from 10% to 17%, lithium iron battery will increase from 12% to 17%.
The GST on silver and gold will increase from 1% to 17% and articles of jewelry to 17%.
Goods imported temporarily, including passenger service items, provision and stores of Pakistani airlines, items with dedicated use of renewable sources of energy like solar and wind, high-efficiency irrigation equipment are also on the list of items to be taxed.
Green house farming equipment will be taxed for Rs5.5 billion in revenue. Fans for dairy farms for Rs500 million, fish feed, bovine semen, preparations for making animal feed will be taxed for Rs4 billion. The micro feeder equipment, plant and machinery imported by greenfield industries will be subject to new taxation.
Sprinkler, drip and spray pumps equipment is proposed to be taxed, raw cotton, single cylinder agriculture diesel engines will be taxed.
Sunflower and canola hybrid seeds meant for sowing will be taxed. Combined harvesters up to five years old to face 17% GST, oil cake and solid residue will have 17% tax and to generate minimum Rs5 billion revenue. The local supply of locally produced crude vegetable oil will be taxed for the sake of Rs2 billion annual revenue.
The tax rate on import of oilseeds meant for sowing will be increased from 5% to 17%,
Machinery and equipment for BMR of coal firing system, gas processing plants and oil and gas field prospecting, plant, machinery, equipment for mine construction or extraction phase, coal mining machinery, equipment imported for the Thar coalfield will attract the 17% GST rate. The machinery, equipment and spares for BMR or expansion projects for power generation under an agreement with the government of Pakistan will be taxed for Rs14 billion, and machinery, equipment and spares for BMR or expansion projects for power generation will also be subject to 17% GST for Rs42 billion revenue.
Similarly, machinery, equipment and spares for BMR or expansion projects for power generation through nuclear or renewable energy resources will be taxed for Rs6 billion. Effluent treatment plants, items for use with solar energy are being taxed for Rs12 billion revenue.
The rate of tax on import of plant and machinery having no compatible local substitutes will be increased from 10% to 17% to fetch Rs12 billion additional revenue.
Even import of POS machines will be taxed at 17%, despite expanding web of integrated POS that is the single largest initiative of Finance Minister Shaukat Tarin.
Exported goods, which are subsequently imported within one year of exportation to be taxed for Rs3 billion revenue. Import of plant and machinery for the manufacturing of mobile phones by local manufacturers of mobile phones will be subject to 17% GST.
Personal wearing apparel and bona fide baggage imported by overseas Pakistanis and tourists. The raw material and intermediary goods for in-house consumption will also be taxed.
Compost (non-commercial fertiliser) produced and supplied locally will be taxed at 17%, and imported plant, machinery and materials by Export Processing Zone will also be taxed.
Personal computers, laptop computers, notebooks whether or not incorporating multimedia kit will also face new taxation.
https://tribune.com.pk/story/2336319/17-gst-on-144-items-to-yield-rs360-billion
Prime Minister Imran Khan has convened a special cabinet meeting at noon to seek his ministers’ nod for the mini-budget to the tune of Rs360 billion as part of the International Monetary Fund (IMF) condition for revival of the stalled bailout programme.
After the cabinet meeting, the premier will brief the PTI parliamentarians and then Finance Minister Shaukat Tarin will present the mini-budget in the National Assembly at 4 pm today.
The details of the mini-budget showed that once passed by the National Assembly the budget could increase mal-nutrition and stunting in the country due to an increase in the cost of goods that are critical for nourishment.
Sources in the Ministry of Finance said that about 144 goods that are currently either completely exempted from General Sales Tax (GST) or are being taxed at 5% to 12% rates will now be taxed at 17%.
The actual revenue impact from slapping GST on 144 items will be far higher than the estimated Rs352 billion, as many items will be taxed for the first time and their revenue impacts were not available with the Federal Board of Revenue (FBR). Another roughly Rs7 billion will be collected by increasing the income tax rate on mobile phone calls from 10% to 15%.
The sources said that the zero-rating available on imports and supplies of goods and raw materials for the preparation of milk for infants will be withdrawn and be taxed at 17% to raise Rs9 billion revenues annually. Similarly, preparations suitable for infants put up for sale that are currently exempted will be taxed at 17% to raise another over Rs6 billion annual revenue. The net revenue from taxing infant milk is estimated at over Rs15 billion.
The supplies to duty-free shops will be taxed at 17% and since they will be taxed for the first time there are no revenue estimates from the measure. The GST rate on cars above 850cc will go up to 17%, tax on import of electric vehicles in CBU conditions will increase from 5% to 17%, business-to-business transactions will go up from 16.9% to 17%.
In a major proposal, which will also fetch the highest amount of revenue under any head, the government has proposed to slap 17% GST on raw materials for pharmaceutical products for Rs45 billion revenues. This includes Rs30 billion at the import stage and Rs15 billion at the local stage. But the FBR says that raw material will be zero-rated and the board will give refunds.
The premixes of growth stunting will be taxed at 17%, which is contrary to PM Imran’s vision to end stunting.
Bread prepared in bakeries, restaurants, food chains and shops will be taxed at a 17% rate for nearly Rs5 billion annual revenue, while the bread prepared in tandoors (naan, chapatti and sheermal) shall remain exempt. Foodstuff cooked served in messes will be taxed at a 17% rate as well.
Tax on prepared foodstuff and sweetmeats supplied by restaurants, bakeries, caterers and sweetmeat shops will increase from 7.5% to 17%, making hoteling expensive.
The imported edible vegetable will be taxed for Rs7 billion revenues. Red chilies not sold in retail packaging will also be taxed. Cereals and products of the milling industry will be taxed for Rs5 billion revenues and local supply of rice, wheat and meslin flour will remain exempt.
The matchboxes will also be taxed at 17%, whey, excluding that sold in retail packing under a brand name, and sausages and similar products of poultry meat or meat offal, excluding sold in retail packing under a brand name or trademark, are also on the list to tax at 17%.
The tax rate on flavoured milk sold in retail packing under a brand name will be increased from 10% to 17% for over Rs1 billion revenue. The rate on yogurt sold in retail packing under a brand name will go up from 10% to 17%, the rates on cheese, butter, cream, desi ghee, whey, milk and cream sold in retail packing under a brand name will also increase from 10% to 17%.
Machinery and equipment related to dairy products will now be taxed at 17% as against the existing 5% rate. Mobile phones will also be taxed at a standard 17% rate.
Supplies made from retail outlets as are integrated with the Board’s computerized system that are currently taxed at 10% will now be taxed at 16%. Frozen prepared or preserved sausages tax rate will go up from 8% to 17%,
Seeds, fruits and spores of a kind used for sowing are proposed to be taxed for Rs4 billion annual revenue. The 17% GST on Cinchona bark will get a minimum of Rs4 billion revenue every year. The import of sugarcane will also attract a 17% tax.
The import of newsprint, newspapers, journals, periodicals, books but excluding directories will be taxed at 17% for Rs1.5 billion annual revenue but their local supply of newspapers will remain exempt. Promotional and advertising material will be taxed at 17%.
Goods imported by or donated to federal and provincial hospitals will be taxed at 17%. Similarly, goods supplied to hospitals run by the federal or provincial governments will be taxed for Rs1.5 billion annual revenue.
Goods imported by various agencies of the United Nations, diplomats, diplomatic missions will also be taxed at the rate of 17%. The annual revenue potential at the current import volume is Rs300million. Goods received as gift or donation from a foreign government or organisation will be taxed at 17%.
Import of all goods received, in the event of a natural disaster will also be subject to tax. Articles imported through the post as unsolicited gifts will be subject to 17% tax.
Contraceptives and accessories will be taxed for Rs200million in revenue. Sewing machines will be taxed at 17% rate.
The import of live animals and live poultry will be taxed at 17% for Rs700 million revenue but its local supply will remain exempt. The meat of bovine animals, sheep and goat to be taxed but their local supply will remain exempt. The import of fish and crustaceans, excluding live fish to be taxed but local supply will remain exempt.
Eggs, including those for hatching to be taxed for Rs2 billion in revenue but local supply will remain exempt. Import of live plants to be taxed and local supply will remain exempt.
Uncooked poultry meat is on the list to be taxed for a minimum of Rs2 billion in revenue. The cottonseed is proposed to be taxed at 17% GST for Rs3 billion annual revenue. The iodized salt will be taxed for Rs300 million annual revenue.
The rate on ingredients of poultry feed, cattle feed, except soya bean meal will go up form 10% to 17%. Taxes on tillage and seed bed preparation equipment, seeding and planting, irrigation, drainage and agrochemical preparation, harvesting, threshing and storage equipment and post-harvest handling equipment will go up from 5% to 17%.
The GST on the machinery of the poultry sector will go up from 7% to 17%, multimedia projects from 10% to 17%, lithium iron battery will increase from 12% to 17%.
The GST on silver and gold will increase from 1% to 17% and articles of jewelry to 17%.
Goods imported temporarily, including passenger service items, provision and stores of Pakistani airlines, items with dedicated use of renewable sources of energy like solar and wind, high-efficiency irrigation equipment are also on the list of items to be taxed.
Green house farming equipment will be taxed for Rs5.5 billion in revenue. Fans for dairy farms for Rs500 million, fish feed, bovine semen, preparations for making animal feed will be taxed for Rs4 billion. The micro feeder equipment, plant and machinery imported by greenfield industries will be subject to new taxation.
Sprinkler, drip and spray pumps equipment is proposed to be taxed, raw cotton, single cylinder agriculture diesel engines will be taxed.
Sunflower and canola hybrid seeds meant for sowing will be taxed. Combined harvesters up to five years old to face 17% GST, oil cake and solid residue will have 17% tax and to generate minimum Rs5 billion revenue. The local supply of locally produced crude vegetable oil will be taxed for the sake of Rs2 billion annual revenue.
The tax rate on import of oilseeds meant for sowing will be increased from 5% to 17%,
Machinery and equipment for BMR of coal firing system, gas processing plants and oil and gas field prospecting, plant, machinery, equipment for mine construction or extraction phase, coal mining machinery, equipment imported for the Thar coalfield will attract the 17% GST rate. The machinery, equipment and spares for BMR or expansion projects for power generation under an agreement with the government of Pakistan will be taxed for Rs14 billion, and machinery, equipment and spares for BMR or expansion projects for power generation will also be subject to 17% GST for Rs42 billion revenue.
Similarly, machinery, equipment and spares for BMR or expansion projects for power generation through nuclear or renewable energy resources will be taxed for Rs6 billion. Effluent treatment plants, items for use with solar energy are being taxed for Rs12 billion revenue.
The rate of tax on import of plant and machinery having no compatible local substitutes will be increased from 10% to 17% to fetch Rs12 billion additional revenue.
Even import of POS machines will be taxed at 17%, despite expanding web of integrated POS that is the single largest initiative of Finance Minister Shaukat Tarin.
Exported goods, which are subsequently imported within one year of exportation to be taxed for Rs3 billion revenue. Import of plant and machinery for the manufacturing of mobile phones by local manufacturers of mobile phones will be subject to 17% GST.
Personal wearing apparel and bona fide baggage imported by overseas Pakistanis and tourists. The raw material and intermediary goods for in-house consumption will also be taxed.
Compost (non-commercial fertiliser) produced and supplied locally will be taxed at 17%, and imported plant, machinery and materials by Export Processing Zone will also be taxed.
Personal computers, laptop computers, notebooks whether or not incorporating multimedia kit will also face new taxation.
https://tribune.com.pk/story/2336319/17-gst-on-144-items-to-yield-rs360-billion
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Federal Minister for Information Fawad Chaudhry informed on Thursday that the cabinet had given approval for the finance bill, or the mini-budget, adding that the bill will now be presented in the National Assembly session being held today.
Earlier in the day, the information minister had tweeted that the bill was to be presented before a special committee of the cabinet for approval, following which the Pakistan Tehreek-e-Insaf and its allies will hold a parliamentary meeting before the NA session.
A day earlier, the joint opposition had rejected the PTI-led government’s plan to introduce the supplementary finance bill or mini-budget, vowing to vehemently resist it in parliament.
Taking the floor of the NA, PML-N's Khawaja Asif said the country was surrendering its economic sovereignty through the supplementary finance bill and the State Bank of Pakistan (SBP) Amendment Bill, 2021.
PPP MNA Raja Pervez Ashraf also voiced his concerns over the government’s plan to introduce a mini-budget.
"Inflation, unemployment and the shortage of gas and other commodities have already ruined the lives of the people of the country,” he claimed.
“Now, if a mini-budget is on the cards that would increase their [peoples’] difficulties, then everyone sitting in the House should resist the move.”
The federal cabinet had on Tuesday deferred the approval of Rs360 billion mini-budget for the second time in a week amid strong criticism against the Ministry of Finance due to increasing inflation.
Some cabinet members from Khyber-Pakhtunkhwa objected to bringing the mini-budget after the Pakistan Tehreek-e-Insaf faced defeat in the local bodies’ elections.
https://tribune.com.pk/story/233634...RCMHZFeS1HVnpTSTdlOXdJV19VSmJRbzRROVktUFZYUlI
Earlier in the day, the information minister had tweeted that the bill was to be presented before a special committee of the cabinet for approval, following which the Pakistan Tehreek-e-Insaf and its allies will hold a parliamentary meeting before the NA session.
A day earlier, the joint opposition had rejected the PTI-led government’s plan to introduce the supplementary finance bill or mini-budget, vowing to vehemently resist it in parliament.
Taking the floor of the NA, PML-N's Khawaja Asif said the country was surrendering its economic sovereignty through the supplementary finance bill and the State Bank of Pakistan (SBP) Amendment Bill, 2021.
PPP MNA Raja Pervez Ashraf also voiced his concerns over the government’s plan to introduce a mini-budget.
"Inflation, unemployment and the shortage of gas and other commodities have already ruined the lives of the people of the country,” he claimed.
“Now, if a mini-budget is on the cards that would increase their [peoples’] difficulties, then everyone sitting in the House should resist the move.”
The federal cabinet had on Tuesday deferred the approval of Rs360 billion mini-budget for the second time in a week amid strong criticism against the Ministry of Finance due to increasing inflation.
Some cabinet members from Khyber-Pakhtunkhwa objected to bringing the mini-budget after the Pakistan Tehreek-e-Insaf faced defeat in the local bodies’ elections.
https://tribune.com.pk/story/233634...RCMHZFeS1HVnpTSTdlOXdJV19VSmJRbzRROVktUFZYUlI
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Finance Minister Shaukat Tarin on Thursday introduced two bills in the National Assembly to give effect to the Rs375 billion mini-budget and handover absolute autonomy to the central bank, which the opposition terms will make Pakistan economically a slave of the west and its institutions.
Amid strong protest by the opposition parties, Tarin proposed amendments in income tax, sales tax and federal excise laws to impose Rs375 billion taxation measures. Where the government withdrew the Rs343 billion sales tax exemptions that will affect every segment of the society, it has proposed income tax exemption to those richest persons who own real estate investment trusts (REITs).
The introduction of both the bills in the National Assembly marks the first serious step towards meeting the International Monetary Fund’s conditions for approval of both the pieces of legislation before January 12.
Out of Rs375 billion, the Rs343 billion worth of sales tax exemptions are proposed to be withdrawn. The Rs7 billion income tax measures have been taken in the shape of increasing the income tax rate on telephone calls by 50% and enhancing advance income tax on registration of cars by 100%. Up to Rs3 million tax has also been slapped on foreign produced dramas.
In addition to that, the government has also proposed to increase federal excise duties on purchase of locally made and imported cars of 1,000cc and above categories to raise another roughly Rs25 billion in revenues. But a presentation given to the cabinet showed that the revenue impact of federal excise duty will be over Rs6.5 billion.
Both the SBP Amendment Bill, 2021 and Finance Supplementary Bill 2021 have been introduced in the National Assembly for the sake of revival of the stalled $6 billion IMF programme. Tarin told The Express Tribune that the IMF board meeting might be delayed for a few days due to the process involved in securing approval of both the bills.
After December 1971 (creation of Bangladesh), Pakistan has today economically surrendered before the IMF and the countries that are controlling it, Khawaja Mohammad Asif, the senior leader of the PML-N said while reacting to the introduction of both the bills in the house.
Asif said that the government has effectively given the control of the SBP to the IMF with the introduction of the new bill. “Do not sell Pakistan,” thundered Khawaja Asif while equating the government’s bills with the sub-continent's takeover through East India Company by the United Kingdom in the 17th century.
However, his party’s opposition leader Shehbaz Sharif was missing from the National Assembly, like Prime Minister Imran Khan.
While addressing a news conference, Finance Minister Shaukat Tarin rejected these allegations and said that giving autonomy to the SBP was part of the Pakistan Tehreek-e-Insaf’s election manifesto. Tarin said that the IMF was of the view that Pakistan had badly treated the SBP in the past and there was a need to give it autonomy.
“In case the SBP misused its autonomy, the federal government can make amendments anytime in the SBP law through simple majority,” Tarin said while responding to a question over giving absolute autonomy to the SBP.
Tarin said that Rs343 billion sales tax exemptions have been proposed to be withdrawn. These include Rs160 billion pharmaceutical related sales tax exemptions, Rs112 billion are related to capital machinery imports and Rs71 billion were related to the people. However, the exemptions that would really impact people only amount to Rs2 billion, which would not unleash inflation, the finance minister claimed.
He said that Rs272 billion tax exemptions were related to machinery and pharmaceuticals, which are refundable and adjustable. The purpose is to ensure documentation and those who would not document themselves will not be entitled to refunds, Tarin said.
Cars to become expensive
The government has proposed to increase sales tax from 12.5% to 17% on cars of above 850cc engines. The sales tax on HEVs up-to 1800 CC engines has been proposed to increase from 8.5% to 12.5%. The sales Tax on Electric Vehicles has been increased from 5% to 17%
Similarly, the government has significantly increased the federal excise duty rates on locally produced and imported cars. On imported cars of 1001 – 1799cc engines, the FED has been doubled from 5% to 10%, on 1800 – 3000cc engines, the rates have been increased from 25% to 30% and from 3001cc engines and above, these have increased from 30% to 40%.
Likewise, the FED has been increased on local motor cars of 1001 – 2000cc engines from 2.5% to 5%, 2001cc and above engines, these are increased from 5% to 10%. The FED on imported (4x4) double cabin pick-ups has been increased from 25% to 30% and on local (4x4) double cabin pickups, the FED has increased from 7.5% to 10%.
The government has also 100% increased the advance tax on registration of new cars. On cars of 1000cc engines, the advance income tax rate is increased from Rs50,000 to Rs100,000, on 1000cc to 2000cc engines it is increased from Rs100,000 to Rs200,000 and for 2000cc or higher engines, the tax is increased from Rs200,000 to Rs400,000.
The government has also proposed sales taxes on 144 goods and their details show that once passed by the National Assembly, it could increase malnutrition and stunting in the country because of the increase in cost of goods that were critical for nourishment.
The zero-rating available on imports and supplies of goods and raw materials for preparations of milk for infants is proposed to be withdrawn and be taxed at 17%. Similarly, preparations suitable for infants that are currently exempted will be taxed at 17%. The net revenue from taxing infant milk is estimated to be over Rs15 billion.
The raw materials for pharmaceutical products for revenue are proposed to be taxed at 17%. Breads prepared in bakeries, restaurants, food chains and shops will be taxed at 17% rate for nearly Rs5 billion every year. Nan, chapati and sheermal prepared at tandoors will remain exempted. Cooked food served in messes will be taxed at 17% rate.
The premixes of growth stunting will be taxed at 17%. Tax on prepared foodstuff and sweetmeats supplied by restaurants, bakeries, caterers and sweetmeat shops will increase from 7.5% to 17%, making the business expensive.
Imported edible vegetables will be taxed to generate Rs7 billion. Red chilies not sold in retail packaging will be taxed. Imported cereals and products of the milling industry will be taxed at 17%.
Match boxes will also be taxed at 17% rate. Whey excluding those sold in retail packing under a brand name and sausages and similar products of poultry meat or meat offal excluding those sold in retail packing under a brand name or trademark are proposed to be taxed at 17%.
The tax rate on flavored milk sold in retail packing under a brand name will be increased from 10% to 17%. The rates of yogurt, cheese, butter, cream, desi ghee, whey, milk and cream sold in retail packing under a brand name will go up from 10% to 17%.
Machinery and equipment related to dairy products will now be taxed at 17% as against the existing 5%. Mobile phones will be taxed at the standard 17% rate as against the fixed rate.
Supplies made from retail outlets as are integrated with the FBR’s computerised system that are currently taxed at 10% will now be taxed at 12%. The tax rate of frozen prepared or preserved sausages will go up from 8% to 17%.
Seeds, fruit and spores of a kind used for sowing are proposed to be taxed for Rs4 billion. The 17% GST on Cinchona bark will fetch a minimum of Rs4 billion every year. The import of sugarcane will also attract 17% tax.
The import of newsprint, newspapers, journals, periodicals, books but excluding directories will be taxed at 17% for Rs1.5 billion every year. However, the local supply of newspapers will remain exempted.
Promotional and advertising material will be taxed at 17% rate.
Goods imported by or donated to federal and provincial hospitals will be taxed at 17% rate. Similarly, goods supplied to hospitals run by the federal or provincial governments will be taxed for Rs1.5 billion every year.
Goods imported by various agencies of the UN, diplomats, and diplomatic missions will also be taxed at the rate of 17%. The annual revenue potential at current import volume is Rs300 million. Goods received as a gift or donation from a foreign government or organisation will be taxed at 17%.
The import of all goods received, in the event of a natural disaster will also be subject to tax. Articles imported through post as unsolicited gifts will be subject to 17% tax.
Imported samples, contraceptives and accessories will be taxed for Rs200 million every year. Sewing machines will be taxed at 17% rate. The import of live animals and live poultry will be taxed at 17% for Rs700 million every year but its local supply will remain exempted.
The meat of bovine animals, sheep and goat will be taxed but their local supply will remain exempted. The import of fish and crustaceans excluding live fish will be taxed but their local supply will remain exempted. Eggs including eggs for hatching will be taxed for Rs2 billion annually but their local supply will remain exempted.
The import of live plants will be taxed and their local supply will remain exempted. Uncooked poultry meat is on the list to be taxed for a minimum of Rs2 billion.
Cotton seed is proposed to be taxed at 17% GST for Rs3 billion. Iodized salt will be taxed for Rs300 million annually. The rate on ingredients of poultry feed, cattle feed, except soya bean meal will go up from 10% to 17%.
Taxes on tillage and seedbed preparation equipment, seeding and planting, irrigation, drainage, and agrochemical preparation, harvesting, threshing and storage equipment and post-harvest handling equipment will go up from 5% to 17%.
The GST on machinery for the poultry sector will go up from 7% to 17%, multimedia projects from 10% to 17% and lithium iron batteries will increase from 12% to 17%. The GST on silver and gold will increase from 1% to 17% and articles of jewelry to 17%.
Green house farming equipment will be taxed for Rs5.5 billion revenue. Fans for dairy farms for Rs500 million, fish feed, bovine semen, preparations for making animal feed will be taxed for Rs4 billion. The micro feeder equipment, plant and machinery imported by green field industries will be subjected to the new taxation.
Sprinkler, drip and spray pumps equipment is proposed to be taxed. Raw cotton, single cylinder agriculture diesel engines will be taxed. Sunflower and canola hybrid seeds meant for sowing will be taxed.
Combined harvesters up to five years old to face 17% GST, oil cake and solid residue will have 17% tax and to generate minimum Rs5 billion revenue. The local supply of locally produced crude vegetable oil will be taxed for Rs2 billion.
The tax rate on import of oilseeds meant for sowing will be increased from 5% to 17%.
Machinery and equipment for BMR of coal firing system, gas processing plants and oil and gas field prospecting, plant machinery, equipment for mine construction or extraction phase, coal mining machinery, and equipment imported for the Thar Coal Field will attract 17% GST rate.
The machinery, equipment and spares for BMR or expansion projects for power generation under an agreement with the government of Pakistan will be taxed for Rs14 billion. Machinery, equipment and spares for BMR or expansion projects for power generation will also be subject to 17% GST for Rs42 billion.
Similarly, machinery, equipment and spares for BMR or expansion projects for power generation through nuclear or renewable energy resources will be taxed for Rs6 billion.
Effluent treatment plants, items for use with solar energy will be taxed for Rs12 billion.
The rate of tax on import of plant and machinery having no compatible local substitutes will be increased from 10% to 17% to fetch an additional revenue of Rs12 billion.
Even the import of POS machines will be taxed at 17%. The import of plant and machinery for the manufacturing of cell phones by local manufacturers will be subjected to the 17% GST. Personal computers, laptop computers, notebooks -- whether or not incorporating multimedia kits -- will also face the new taxation.
The cottage industry’s annual turnover limit has been reduced from Rs10 million to Rs8 million and after that it will meet the status of a company or an association of persons. The criteria of advanced tax collected on sales to wholesalers, distributors and retailers have been included for registration as tier-1 retailers.
According to another proposal, the shopkeeper will be responsible if an incorrect CNIC number is provided by the seller. It has proposed to delete the third proviso in Section 23 g.
https://tribune.com.pk/story/2336466/taxing-time-a-closer-look-at-the-finance-bill
Amid strong protest by the opposition parties, Tarin proposed amendments in income tax, sales tax and federal excise laws to impose Rs375 billion taxation measures. Where the government withdrew the Rs343 billion sales tax exemptions that will affect every segment of the society, it has proposed income tax exemption to those richest persons who own real estate investment trusts (REITs).
The introduction of both the bills in the National Assembly marks the first serious step towards meeting the International Monetary Fund’s conditions for approval of both the pieces of legislation before January 12.
Out of Rs375 billion, the Rs343 billion worth of sales tax exemptions are proposed to be withdrawn. The Rs7 billion income tax measures have been taken in the shape of increasing the income tax rate on telephone calls by 50% and enhancing advance income tax on registration of cars by 100%. Up to Rs3 million tax has also been slapped on foreign produced dramas.
In addition to that, the government has also proposed to increase federal excise duties on purchase of locally made and imported cars of 1,000cc and above categories to raise another roughly Rs25 billion in revenues. But a presentation given to the cabinet showed that the revenue impact of federal excise duty will be over Rs6.5 billion.
Both the SBP Amendment Bill, 2021 and Finance Supplementary Bill 2021 have been introduced in the National Assembly for the sake of revival of the stalled $6 billion IMF programme. Tarin told The Express Tribune that the IMF board meeting might be delayed for a few days due to the process involved in securing approval of both the bills.
After December 1971 (creation of Bangladesh), Pakistan has today economically surrendered before the IMF and the countries that are controlling it, Khawaja Mohammad Asif, the senior leader of the PML-N said while reacting to the introduction of both the bills in the house.
Asif said that the government has effectively given the control of the SBP to the IMF with the introduction of the new bill. “Do not sell Pakistan,” thundered Khawaja Asif while equating the government’s bills with the sub-continent's takeover through East India Company by the United Kingdom in the 17th century.
However, his party’s opposition leader Shehbaz Sharif was missing from the National Assembly, like Prime Minister Imran Khan.
While addressing a news conference, Finance Minister Shaukat Tarin rejected these allegations and said that giving autonomy to the SBP was part of the Pakistan Tehreek-e-Insaf’s election manifesto. Tarin said that the IMF was of the view that Pakistan had badly treated the SBP in the past and there was a need to give it autonomy.
“In case the SBP misused its autonomy, the federal government can make amendments anytime in the SBP law through simple majority,” Tarin said while responding to a question over giving absolute autonomy to the SBP.
Tarin said that Rs343 billion sales tax exemptions have been proposed to be withdrawn. These include Rs160 billion pharmaceutical related sales tax exemptions, Rs112 billion are related to capital machinery imports and Rs71 billion were related to the people. However, the exemptions that would really impact people only amount to Rs2 billion, which would not unleash inflation, the finance minister claimed.
He said that Rs272 billion tax exemptions were related to machinery and pharmaceuticals, which are refundable and adjustable. The purpose is to ensure documentation and those who would not document themselves will not be entitled to refunds, Tarin said.
Cars to become expensive
The government has proposed to increase sales tax from 12.5% to 17% on cars of above 850cc engines. The sales tax on HEVs up-to 1800 CC engines has been proposed to increase from 8.5% to 12.5%. The sales Tax on Electric Vehicles has been increased from 5% to 17%
Similarly, the government has significantly increased the federal excise duty rates on locally produced and imported cars. On imported cars of 1001 – 1799cc engines, the FED has been doubled from 5% to 10%, on 1800 – 3000cc engines, the rates have been increased from 25% to 30% and from 3001cc engines and above, these have increased from 30% to 40%.
Likewise, the FED has been increased on local motor cars of 1001 – 2000cc engines from 2.5% to 5%, 2001cc and above engines, these are increased from 5% to 10%. The FED on imported (4x4) double cabin pick-ups has been increased from 25% to 30% and on local (4x4) double cabin pickups, the FED has increased from 7.5% to 10%.
The government has also 100% increased the advance tax on registration of new cars. On cars of 1000cc engines, the advance income tax rate is increased from Rs50,000 to Rs100,000, on 1000cc to 2000cc engines it is increased from Rs100,000 to Rs200,000 and for 2000cc or higher engines, the tax is increased from Rs200,000 to Rs400,000.
The government has also proposed sales taxes on 144 goods and their details show that once passed by the National Assembly, it could increase malnutrition and stunting in the country because of the increase in cost of goods that were critical for nourishment.
The zero-rating available on imports and supplies of goods and raw materials for preparations of milk for infants is proposed to be withdrawn and be taxed at 17%. Similarly, preparations suitable for infants that are currently exempted will be taxed at 17%. The net revenue from taxing infant milk is estimated to be over Rs15 billion.
The raw materials for pharmaceutical products for revenue are proposed to be taxed at 17%. Breads prepared in bakeries, restaurants, food chains and shops will be taxed at 17% rate for nearly Rs5 billion every year. Nan, chapati and sheermal prepared at tandoors will remain exempted. Cooked food served in messes will be taxed at 17% rate.
The premixes of growth stunting will be taxed at 17%. Tax on prepared foodstuff and sweetmeats supplied by restaurants, bakeries, caterers and sweetmeat shops will increase from 7.5% to 17%, making the business expensive.
Imported edible vegetables will be taxed to generate Rs7 billion. Red chilies not sold in retail packaging will be taxed. Imported cereals and products of the milling industry will be taxed at 17%.
Match boxes will also be taxed at 17% rate. Whey excluding those sold in retail packing under a brand name and sausages and similar products of poultry meat or meat offal excluding those sold in retail packing under a brand name or trademark are proposed to be taxed at 17%.
The tax rate on flavored milk sold in retail packing under a brand name will be increased from 10% to 17%. The rates of yogurt, cheese, butter, cream, desi ghee, whey, milk and cream sold in retail packing under a brand name will go up from 10% to 17%.
Machinery and equipment related to dairy products will now be taxed at 17% as against the existing 5%. Mobile phones will be taxed at the standard 17% rate as against the fixed rate.
Supplies made from retail outlets as are integrated with the FBR’s computerised system that are currently taxed at 10% will now be taxed at 12%. The tax rate of frozen prepared or preserved sausages will go up from 8% to 17%.
Seeds, fruit and spores of a kind used for sowing are proposed to be taxed for Rs4 billion. The 17% GST on Cinchona bark will fetch a minimum of Rs4 billion every year. The import of sugarcane will also attract 17% tax.
The import of newsprint, newspapers, journals, periodicals, books but excluding directories will be taxed at 17% for Rs1.5 billion every year. However, the local supply of newspapers will remain exempted.
Promotional and advertising material will be taxed at 17% rate.
Goods imported by or donated to federal and provincial hospitals will be taxed at 17% rate. Similarly, goods supplied to hospitals run by the federal or provincial governments will be taxed for Rs1.5 billion every year.
Goods imported by various agencies of the UN, diplomats, and diplomatic missions will also be taxed at the rate of 17%. The annual revenue potential at current import volume is Rs300 million. Goods received as a gift or donation from a foreign government or organisation will be taxed at 17%.
The import of all goods received, in the event of a natural disaster will also be subject to tax. Articles imported through post as unsolicited gifts will be subject to 17% tax.
Imported samples, contraceptives and accessories will be taxed for Rs200 million every year. Sewing machines will be taxed at 17% rate. The import of live animals and live poultry will be taxed at 17% for Rs700 million every year but its local supply will remain exempted.
The meat of bovine animals, sheep and goat will be taxed but their local supply will remain exempted. The import of fish and crustaceans excluding live fish will be taxed but their local supply will remain exempted. Eggs including eggs for hatching will be taxed for Rs2 billion annually but their local supply will remain exempted.
The import of live plants will be taxed and their local supply will remain exempted. Uncooked poultry meat is on the list to be taxed for a minimum of Rs2 billion.
Cotton seed is proposed to be taxed at 17% GST for Rs3 billion. Iodized salt will be taxed for Rs300 million annually. The rate on ingredients of poultry feed, cattle feed, except soya bean meal will go up from 10% to 17%.
Taxes on tillage and seedbed preparation equipment, seeding and planting, irrigation, drainage, and agrochemical preparation, harvesting, threshing and storage equipment and post-harvest handling equipment will go up from 5% to 17%.
The GST on machinery for the poultry sector will go up from 7% to 17%, multimedia projects from 10% to 17% and lithium iron batteries will increase from 12% to 17%. The GST on silver and gold will increase from 1% to 17% and articles of jewelry to 17%.
Green house farming equipment will be taxed for Rs5.5 billion revenue. Fans for dairy farms for Rs500 million, fish feed, bovine semen, preparations for making animal feed will be taxed for Rs4 billion. The micro feeder equipment, plant and machinery imported by green field industries will be subjected to the new taxation.
Sprinkler, drip and spray pumps equipment is proposed to be taxed. Raw cotton, single cylinder agriculture diesel engines will be taxed. Sunflower and canola hybrid seeds meant for sowing will be taxed.
Combined harvesters up to five years old to face 17% GST, oil cake and solid residue will have 17% tax and to generate minimum Rs5 billion revenue. The local supply of locally produced crude vegetable oil will be taxed for Rs2 billion.
The tax rate on import of oilseeds meant for sowing will be increased from 5% to 17%.
Machinery and equipment for BMR of coal firing system, gas processing plants and oil and gas field prospecting, plant machinery, equipment for mine construction or extraction phase, coal mining machinery, and equipment imported for the Thar Coal Field will attract 17% GST rate.
The machinery, equipment and spares for BMR or expansion projects for power generation under an agreement with the government of Pakistan will be taxed for Rs14 billion. Machinery, equipment and spares for BMR or expansion projects for power generation will also be subject to 17% GST for Rs42 billion.
Similarly, machinery, equipment and spares for BMR or expansion projects for power generation through nuclear or renewable energy resources will be taxed for Rs6 billion.
Effluent treatment plants, items for use with solar energy will be taxed for Rs12 billion.
The rate of tax on import of plant and machinery having no compatible local substitutes will be increased from 10% to 17% to fetch an additional revenue of Rs12 billion.
Even the import of POS machines will be taxed at 17%. The import of plant and machinery for the manufacturing of cell phones by local manufacturers will be subjected to the 17% GST. Personal computers, laptop computers, notebooks -- whether or not incorporating multimedia kits -- will also face the new taxation.
The cottage industry’s annual turnover limit has been reduced from Rs10 million to Rs8 million and after that it will meet the status of a company or an association of persons. The criteria of advanced tax collected on sales to wholesalers, distributors and retailers have been included for registration as tier-1 retailers.
According to another proposal, the shopkeeper will be responsible if an incorrect CNIC number is provided by the seller. It has proposed to delete the third proviso in Section 23 g.
https://tribune.com.pk/story/2336466/taxing-time-a-closer-look-at-the-finance-bill
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Information Minister Fawad Chaudhry on Friday insisted that Pakistan was heading in the "right direction" and that the country's economy will be "far better" by August 2022.
Speaking to reporters in Lahore, Chaudhry said a phase was being commenced in Pakistan in which the social protection programmes will take effect, paving the way for improvement of the overall economic situation of the country.
He informed that the PTI-led government had to return $55 billion in its next two years in debt payment, adding that a sum of $32bn had already been paid under debts in the last three years.
"We are paying the price for the legacy left by Asif Ali Zardari and Nawaz Sharif," the minister said, in reference to the last two governments of the PPP and PML-N.
Dispelling the impression given by the opposition about the country failing at the economic front, Chaudhry said Shehbaz Sharif and other opposition leaders should not worry about the country as "it is heading in the right direction, and people are witnessing it".
'Our politics, defence and economy are all stable'
The minister stressed that Pakistan's politics, defence and economy were all quite stable.
He said the national economy was growing at five per cent and it will further stabilise in time to come.
"Also, take an example of the coronavirus pandemic as such calamities occur once in 100 years and Pakistan's strategy to tackle it is being praised worldwide," he added.
Chaudhry, while continuing with his criticism of rival parties, said the opposition leaders were all panicked after the government expressed its intent to bring Nawaz Sharif back to Pakistan.
"We want the Lahore High Court to move on his case and Nawaz should be brought back at the earliest," he said.
Also read: Nawaz won’t return, he will be brought back: Fawad
He added that the government also wanted that cases involving Shehbaz Sharif should be taken up on a day-to-day basis.
The minister stonewalled a query when asked about the political implications of the "most important" appointment the prime minister was set to make in 2022 and wrapped his answer by succinctly saying "for God's sake".
'Pakistan's films will now tell its story to the world'
The minister, while highlighting the importance of the film and drama industry, rued that the country had not been able to utilise the potential of the vital industry for its image-building.
"Our stories have to be told through films and the way we ended our film industry was really unfortunate. We will now revive the medium to tell the story of Pakistan to the world."
'Dollar depreciated after the introduction of finance bill'
Chaudhry said he was pleased that the dollar depreciated against the rupee after the introduction of the Finance (Supplementary) Bill 2021 in the National Assembly on Thursday.
"This inflation cycle will break in three to four months, while the prices of vegetables will also decline in a couple of months," he added.
The information minister said Pakistan would have gone bankrupt had Imran not been the prime minister of the country.
"If Pakistan is floating today, it's because of Imran Khan and the PTI's economic team," claimed the minister.
He said the system through which Pakistan had been governed for the past several years was no more in practice. "Now, for the first time, a people-centric government is working in Pakistan".
DAWN
Speaking to reporters in Lahore, Chaudhry said a phase was being commenced in Pakistan in which the social protection programmes will take effect, paving the way for improvement of the overall economic situation of the country.
He informed that the PTI-led government had to return $55 billion in its next two years in debt payment, adding that a sum of $32bn had already been paid under debts in the last three years.
"We are paying the price for the legacy left by Asif Ali Zardari and Nawaz Sharif," the minister said, in reference to the last two governments of the PPP and PML-N.
Dispelling the impression given by the opposition about the country failing at the economic front, Chaudhry said Shehbaz Sharif and other opposition leaders should not worry about the country as "it is heading in the right direction, and people are witnessing it".
'Our politics, defence and economy are all stable'
The minister stressed that Pakistan's politics, defence and economy were all quite stable.
He said the national economy was growing at five per cent and it will further stabilise in time to come.
"Also, take an example of the coronavirus pandemic as such calamities occur once in 100 years and Pakistan's strategy to tackle it is being praised worldwide," he added.
Chaudhry, while continuing with his criticism of rival parties, said the opposition leaders were all panicked after the government expressed its intent to bring Nawaz Sharif back to Pakistan.
"We want the Lahore High Court to move on his case and Nawaz should be brought back at the earliest," he said.
Also read: Nawaz won’t return, he will be brought back: Fawad
He added that the government also wanted that cases involving Shehbaz Sharif should be taken up on a day-to-day basis.
The minister stonewalled a query when asked about the political implications of the "most important" appointment the prime minister was set to make in 2022 and wrapped his answer by succinctly saying "for God's sake".
'Pakistan's films will now tell its story to the world'
The minister, while highlighting the importance of the film and drama industry, rued that the country had not been able to utilise the potential of the vital industry for its image-building.
"Our stories have to be told through films and the way we ended our film industry was really unfortunate. We will now revive the medium to tell the story of Pakistan to the world."
'Dollar depreciated after the introduction of finance bill'
Chaudhry said he was pleased that the dollar depreciated against the rupee after the introduction of the Finance (Supplementary) Bill 2021 in the National Assembly on Thursday.
"This inflation cycle will break in three to four months, while the prices of vegetables will also decline in a couple of months," he added.
The information minister said Pakistan would have gone bankrupt had Imran not been the prime minister of the country.
"If Pakistan is floating today, it's because of Imran Khan and the PTI's economic team," claimed the minister.
He said the system through which Pakistan had been governed for the past several years was no more in practice. "Now, for the first time, a people-centric government is working in Pakistan".
DAWN
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- Oct 2, 2004
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- 217,977
The government on Friday approved to roll over $142 million debt of Roosevelt Hotel in New York, and cut interest rates on loans under Prime Minister Imran Khan’s housing project after commercial banks termed existing rates unaffordable for the people.
Headed by Federal Minister for Finance Shaukat Tarin, the Economic Coordination Committee (ECC) of the Cabinet also approved Rs2.4 billion annual subsidy for foreign exchange companies to lure them to deposit their cash dollars with the commercial banks. Under the arrangement, the government will pay Rs1 over and above the exchange rate to the dealers for depositing the dollars.
The step aims to offset pressure on the rupee value.
During the meeting, the Aviation Division submitted a summary on the financial challenges of Roosevelt Hotel and a request of PIA Investment Limited for re-rolling of the principal amount along with mark-up payments by the National Bank of Pakistan (NBP) for a further period of two years ending on December 31, 2024.
The ECC approved to roll over $142 million debt of Roosevelt Hotel, owned by Pakistan International Airlines, for two years.
Affordable Housing
The ECC approved a summary to revise terms for lending under Naya Pakistan Housing and Development Authority (NAPHDA) for low-cost housing projects and allowed the inclusion of Housing Finance Companies in the scheme. The federal government is providing subsidies to make housing affordable for low-income groups.
However, according to an appraisal of the existing scheme being carried out by the Commercial Banks, the bankability of the applicants belonging to the Tier-1 NAPHDA Projects is not viable mainly due to the higher debt-burden ratio and low socio-economic ranking of the applicants, the ECC was informed.
Therefore, the applicants are unable to qualify for the required amount of loans. In order to address the situation. The government has now reduced the interest rate for low housing project from 3% to 2% for the first five years and from 5% to 4% per annum during the next five years.
It also increased the subsidy period from 10 years to 15 years and set a 5% per annum rate during the 11 to 15 years lending period.
Motorway subsidy
The ECC also approved the proposal of the Ministry of Communication for a special allocation of additional funds of Rs8 billion against approved government share for the Sialkot–Kharian Motorway Project. Public-Private Partnership Authority Board meeting in August this year accorded approval for the execution of PPP Agreement with M/s FWO & M/s SMC (Sultan Mahmood & Company.
Exchange companies subsidy
The ECC approved Rs1 per US dollar cash incentive for exchange companies that will surrender each USD mobilized from inward remittances. As against the existing requirement of surrendering only 15% of inward remittance, the exchange companies will now be required to surrender 100% of inward remittances in the interbank market. The ECC approved the proposal with direction to review the model to achieve further improvement.
The average monthly inward remittances for the first 5 months of the current fiscal year are $200 million. Based on this trend, the expected annual inward remittances mobilized by exchange companies may reach a level of $2.4 billion, according to the Finance Ministry.
It added an annual amount of approximately Rs2.4 billion would be required to incentivize the exchange companies against surrender of foreign exchange in the interbank market. For the next half of the current fiscal year, at present, a budgetary allocation of Rs1.2 billion would be required.
The ECC also approved the Petroleum Division’s proposal of debt swapping against a long-term loan secured by SNGPL worth Rs54.7 billion at 6 months KIBOR+110 basis point for the construction of a dedicated pipeline project.
https://tribune.com.pk/story/2336611/ecc-approves-to-roll-over-142m-roosevelt-hotel-debt
Headed by Federal Minister for Finance Shaukat Tarin, the Economic Coordination Committee (ECC) of the Cabinet also approved Rs2.4 billion annual subsidy for foreign exchange companies to lure them to deposit their cash dollars with the commercial banks. Under the arrangement, the government will pay Rs1 over and above the exchange rate to the dealers for depositing the dollars.
The step aims to offset pressure on the rupee value.
During the meeting, the Aviation Division submitted a summary on the financial challenges of Roosevelt Hotel and a request of PIA Investment Limited for re-rolling of the principal amount along with mark-up payments by the National Bank of Pakistan (NBP) for a further period of two years ending on December 31, 2024.
The ECC approved to roll over $142 million debt of Roosevelt Hotel, owned by Pakistan International Airlines, for two years.
Affordable Housing
The ECC approved a summary to revise terms for lending under Naya Pakistan Housing and Development Authority (NAPHDA) for low-cost housing projects and allowed the inclusion of Housing Finance Companies in the scheme. The federal government is providing subsidies to make housing affordable for low-income groups.
However, according to an appraisal of the existing scheme being carried out by the Commercial Banks, the bankability of the applicants belonging to the Tier-1 NAPHDA Projects is not viable mainly due to the higher debt-burden ratio and low socio-economic ranking of the applicants, the ECC was informed.
Therefore, the applicants are unable to qualify for the required amount of loans. In order to address the situation. The government has now reduced the interest rate for low housing project from 3% to 2% for the first five years and from 5% to 4% per annum during the next five years.
It also increased the subsidy period from 10 years to 15 years and set a 5% per annum rate during the 11 to 15 years lending period.
Motorway subsidy
The ECC also approved the proposal of the Ministry of Communication for a special allocation of additional funds of Rs8 billion against approved government share for the Sialkot–Kharian Motorway Project. Public-Private Partnership Authority Board meeting in August this year accorded approval for the execution of PPP Agreement with M/s FWO & M/s SMC (Sultan Mahmood & Company.
Exchange companies subsidy
The ECC approved Rs1 per US dollar cash incentive for exchange companies that will surrender each USD mobilized from inward remittances. As against the existing requirement of surrendering only 15% of inward remittance, the exchange companies will now be required to surrender 100% of inward remittances in the interbank market. The ECC approved the proposal with direction to review the model to achieve further improvement.
The average monthly inward remittances for the first 5 months of the current fiscal year are $200 million. Based on this trend, the expected annual inward remittances mobilized by exchange companies may reach a level of $2.4 billion, according to the Finance Ministry.
It added an annual amount of approximately Rs2.4 billion would be required to incentivize the exchange companies against surrender of foreign exchange in the interbank market. For the next half of the current fiscal year, at present, a budgetary allocation of Rs1.2 billion would be required.
The ECC also approved the Petroleum Division’s proposal of debt swapping against a long-term loan secured by SNGPL worth Rs54.7 billion at 6 months KIBOR+110 basis point for the construction of a dedicated pipeline project.
https://tribune.com.pk/story/2336611/ecc-approves-to-roll-over-142m-roosevelt-hotel-debt
Major
Test Star
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mubarak to everyone. 17% tax on goods being imposed.
but what do overseas Pakistanis know or care about..... expect them to ruin the election and lives of the locals here by the time of the elections
but what do overseas Pakistanis know or care about..... expect them to ruin the election and lives of the locals here by the time of the elections
Bewal Express
Test Star
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- Nov 6, 2005
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- 39,700
So you want subsidies on everything but you don't want to pay tax. You want subsidies on electricity that cost on average of 14c to produce and sold at 12 because of IPPs contracts on NS and BB, but you are not happy at paying 12c, you want gas brought at 9 dollars on the international market and sold at 2 but you are not happy, you want oil brought at 80 to be sold at 60. So here is an open forum, tell us how you pay for these subsidies. And BTW you are about to solve our economic problems where everything is subsidised and no one pays higher taxes.
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- Oct 2, 2004
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- 217,977
For the fourth month in a row, inflation rate skyrocketed to another peak of 12.3% in December – the highest pace in nearly two years that also beat the government’s expectations, indicating the difficulties ahead once the highly inflationary mini-budget is implemented.
The fresh inflation reading may also cause further increase in interest rates by the State Bank of Pakistan that is now following headline inflation number (new 12.3%) to determine the policy rate instead of core inflation.
The Consumer Price Index (CPI), jumped to 12.3% in December over the same month a year ago, the Pakistan Bureau of Statistics reported on Saturday – a day after Prime Minister Imran Khan approved a Rs4 per litre increase in prices of petroleum products by under the International Monetary Fund deal.
The 12.3% annual inflation rate was the highest since February 2020, showed the statistics, dashing government expectations of keeping the index below last month’s reading of 11.5%.
The prices have been rising due to the government’s administrative decisions coupled with steep currency depreciation, which is making food, electricity and transport unaffordable for the common man.
Last month, the central bank increased interest rate by one percentage point to 9.75% to contain inflation, which is largely fuelled by factors that cannot be addressed by increasing interest rates.
The Wholesale Price Index (WPI) jumped to 26.2% in December, indicating that prices would remain very high in the coming months.
A major criticism against former finance minister Dr Abdul Hafeez Shaikh was that he failed to control inflation. While responding to a question on Thursday, Finance Minister Shaukat Tarin said that if he failed to control inflation then US President Joe Biden and UK Prime Minister Boris Johnson also failed.
The latest inflation reading suggests that prices have gone out of the control of the government, which has not yet fulfilled its promise to reduce ghee prices by Rs45 to Rs290 per kilo by slashing duties and taxes.
The central bank last month also adjusted upwards its inflation projection to 9% to 11%, although it claims to follow the federal government’s guidance on controlling inflation. For this fiscal year, the government has set the inflation target at 8%.
The CPI-based inflation accelerated to 12.7% in urban areas – the highest level since January 2020. The inflation rate increased to 11.6% in villages and towns – the highest reading since March 2020, according to the PBS.
It was mainly because of increase in prices of non-food items owing to the government’s decision to increase prices of electricity and petroleum products.
Non-food inflation surged to 13.4% in urban areas and 14% in rural areas in December, according to the national data collecting agency. It was the highest pace since at least 12 years when non-food inflation had been recorded around this reading.
The pace of food inflation accelerated to 11.7% in cities and to 9% in villages and towns. Prices of non-perishable goods jumped significantly as people still awaited the government’s decision to reduce prices of cooking oil, sugar and wheat flour.
The surge in prices came amid a sharp fall in the rupee’s value over the past three months to around Rs177 to a dollar. On May 3, the rupee had traded at Rs153.36 to a dollar, which lost Rs24, or over 15% of its value.
The reduction in the rupee’s value is pushing up the cost of every imported commodity, including wheat, sugar, cooking oil, crude oil and raw material for industries.
Core inflation – calculated by excluding food and energy items –increased significantly to 8.3% in urban areas and 8.9% in rural areas last month, the national data collecting agency reported.
The core inflation-adjusted central bank’s real interest rate is still positive by nearly 1%, which does not warrant any further increase in interest rates. But the Governor SBP Dr Reza Baqir has been following the headline inflation rate to determine interest rates that would now require further increase in interest rate under the IMF deal.
The food group saw 12.3% increase in prices in December compared to the same month a year ago despite 10.2% reduction in prices of perishable goods. Prices of non-perishable food items soared 14.2%.
The PBS stated that prices of various types of ghee and cooking oil were higher by 56% to 61% last month compared to a year ago. The inflation rate for pluses was nearly 34%, fruits 30%, meat 20%, wheat flour 19%, wheat 14%, milk 14.5% and sugar 13%.
Inflation rate for the housing, water, electricity, gas and fuel group – having one-fourth weight in the basket – increased 16.6% last month, which is a double-digit increase due to the government’s decision to increase prices of electricity by 59.4%.
Household requirement group prices increased 12.3% and transport group prices rose 24%, clothing and footwear group inflation rate jumped over 11%, according to the PBS. Similarly, the dining cost at restaurants increased over 12%. The motor fuel prices was almost 40% expensive last month compared to a year ago.
Under the IMF pressure, the government has introduced Rs375 billion mini-budget, which will further increase cost of almost everything, including electricity, and enhance petroleum levy by another Rs20 per litre. Of Rs375 billion, the Rs343 billion worth of sales tax exemptions have been withdrawn.
The Rs4 increase in the price of petrol is part of a commitment made by the government under an agreement with the IMF for a net fiscal adjustment of almost Rs550 billion.
The price of petrol has been increased from Rs140.82 to Rs144.82, high speed diesel from Rs137.62 to Rs141.62, kerosene from Rs109.53 to Rs113.53 and that of light diesel oil from Rs107.06 to Rs111.06, according to the Finance Division's statement.
Average inflation during first six months (July-December) remained at 9.8% - far higher than the government’s target of 8% and initial projection made by the SBP.
https://tribune.com.pk/story/2336764/inflation-peaks-123-with-inflationary-budget-on-horizon
The fresh inflation reading may also cause further increase in interest rates by the State Bank of Pakistan that is now following headline inflation number (new 12.3%) to determine the policy rate instead of core inflation.
The Consumer Price Index (CPI), jumped to 12.3% in December over the same month a year ago, the Pakistan Bureau of Statistics reported on Saturday – a day after Prime Minister Imran Khan approved a Rs4 per litre increase in prices of petroleum products by under the International Monetary Fund deal.
The 12.3% annual inflation rate was the highest since February 2020, showed the statistics, dashing government expectations of keeping the index below last month’s reading of 11.5%.
The prices have been rising due to the government’s administrative decisions coupled with steep currency depreciation, which is making food, electricity and transport unaffordable for the common man.
Last month, the central bank increased interest rate by one percentage point to 9.75% to contain inflation, which is largely fuelled by factors that cannot be addressed by increasing interest rates.
The Wholesale Price Index (WPI) jumped to 26.2% in December, indicating that prices would remain very high in the coming months.
A major criticism against former finance minister Dr Abdul Hafeez Shaikh was that he failed to control inflation. While responding to a question on Thursday, Finance Minister Shaukat Tarin said that if he failed to control inflation then US President Joe Biden and UK Prime Minister Boris Johnson also failed.
The latest inflation reading suggests that prices have gone out of the control of the government, which has not yet fulfilled its promise to reduce ghee prices by Rs45 to Rs290 per kilo by slashing duties and taxes.
The central bank last month also adjusted upwards its inflation projection to 9% to 11%, although it claims to follow the federal government’s guidance on controlling inflation. For this fiscal year, the government has set the inflation target at 8%.
The CPI-based inflation accelerated to 12.7% in urban areas – the highest level since January 2020. The inflation rate increased to 11.6% in villages and towns – the highest reading since March 2020, according to the PBS.
It was mainly because of increase in prices of non-food items owing to the government’s decision to increase prices of electricity and petroleum products.
Non-food inflation surged to 13.4% in urban areas and 14% in rural areas in December, according to the national data collecting agency. It was the highest pace since at least 12 years when non-food inflation had been recorded around this reading.
The pace of food inflation accelerated to 11.7% in cities and to 9% in villages and towns. Prices of non-perishable goods jumped significantly as people still awaited the government’s decision to reduce prices of cooking oil, sugar and wheat flour.
The surge in prices came amid a sharp fall in the rupee’s value over the past three months to around Rs177 to a dollar. On May 3, the rupee had traded at Rs153.36 to a dollar, which lost Rs24, or over 15% of its value.
The reduction in the rupee’s value is pushing up the cost of every imported commodity, including wheat, sugar, cooking oil, crude oil and raw material for industries.
Core inflation – calculated by excluding food and energy items –increased significantly to 8.3% in urban areas and 8.9% in rural areas last month, the national data collecting agency reported.
The core inflation-adjusted central bank’s real interest rate is still positive by nearly 1%, which does not warrant any further increase in interest rates. But the Governor SBP Dr Reza Baqir has been following the headline inflation rate to determine interest rates that would now require further increase in interest rate under the IMF deal.
The food group saw 12.3% increase in prices in December compared to the same month a year ago despite 10.2% reduction in prices of perishable goods. Prices of non-perishable food items soared 14.2%.
The PBS stated that prices of various types of ghee and cooking oil were higher by 56% to 61% last month compared to a year ago. The inflation rate for pluses was nearly 34%, fruits 30%, meat 20%, wheat flour 19%, wheat 14%, milk 14.5% and sugar 13%.
Inflation rate for the housing, water, electricity, gas and fuel group – having one-fourth weight in the basket – increased 16.6% last month, which is a double-digit increase due to the government’s decision to increase prices of electricity by 59.4%.
Household requirement group prices increased 12.3% and transport group prices rose 24%, clothing and footwear group inflation rate jumped over 11%, according to the PBS. Similarly, the dining cost at restaurants increased over 12%. The motor fuel prices was almost 40% expensive last month compared to a year ago.
Under the IMF pressure, the government has introduced Rs375 billion mini-budget, which will further increase cost of almost everything, including electricity, and enhance petroleum levy by another Rs20 per litre. Of Rs375 billion, the Rs343 billion worth of sales tax exemptions have been withdrawn.
The Rs4 increase in the price of petrol is part of a commitment made by the government under an agreement with the IMF for a net fiscal adjustment of almost Rs550 billion.
The price of petrol has been increased from Rs140.82 to Rs144.82, high speed diesel from Rs137.62 to Rs141.62, kerosene from Rs109.53 to Rs113.53 and that of light diesel oil from Rs107.06 to Rs111.06, according to the Finance Division's statement.
Average inflation during first six months (July-December) remained at 9.8% - far higher than the government’s target of 8% and initial projection made by the SBP.
https://tribune.com.pk/story/2336764/inflation-peaks-123-with-inflationary-budget-on-horizon
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Tape Ball Star
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Country’s exports increase 25% in H1 of 2021-22
ISLAMABAD:
Minister of State for Information and Broadcasting Farrukh Habib on Sunday said the country’s exports had reached $15.125 billion during the first half of the current fiscal year, posting a record increase of 25 percent as compared to same period of the corresponding year.
“By the grace of Allah Almighty, this record growth had been achieved due to special measures taken by Prime Minister Imran Khan,” the minister said in a tweet. In first six months of the last fiscal year, he said, the exports stood at $12.110.
Only in December, the minister said, the exports remained at $2.761 billion with a 32 percent surge as compared to the same month of the fiscal year 2020-21.
If the exports continued increasing at the same pace, he expressed confidence that the country would witness history’s highest-ever growth of $30 billion in this sector by end of the current fiscal year by the grace of Allah Almighty.
Farrukh regretted that the exports sector faced destruction due to wrong economic policies introduced by the past regime of Nawaz Sharif and Ishaq Dar.
On Sunday, the minister visited the residence of PTI’s chief whip in the National Assembly Malik Muhammad Amir Dogar to condole his mother's demise. He sympathised with Dogar, who is also special assistant to the prime minister on parliamentary affairs, and prayed to Allah Almighty to rest the departed soul in eternal peace. Dogar’s mother died some days ago.
https://tribune.com.pk/story/2336862/countrys-exports-increase-25-in-h1-of-2021-22
ISLAMABAD:
Minister of State for Information and Broadcasting Farrukh Habib on Sunday said the country’s exports had reached $15.125 billion during the first half of the current fiscal year, posting a record increase of 25 percent as compared to same period of the corresponding year.
“By the grace of Allah Almighty, this record growth had been achieved due to special measures taken by Prime Minister Imran Khan,” the minister said in a tweet. In first six months of the last fiscal year, he said, the exports stood at $12.110.
Only in December, the minister said, the exports remained at $2.761 billion with a 32 percent surge as compared to the same month of the fiscal year 2020-21.
If the exports continued increasing at the same pace, he expressed confidence that the country would witness history’s highest-ever growth of $30 billion in this sector by end of the current fiscal year by the grace of Allah Almighty.
Farrukh regretted that the exports sector faced destruction due to wrong economic policies introduced by the past regime of Nawaz Sharif and Ishaq Dar.
On Sunday, the minister visited the residence of PTI’s chief whip in the National Assembly Malik Muhammad Amir Dogar to condole his mother's demise. He sympathised with Dogar, who is also special assistant to the prime minister on parliamentary affairs, and prayed to Allah Almighty to rest the departed soul in eternal peace. Dogar’s mother died some days ago.
https://tribune.com.pk/story/2336862/countrys-exports-increase-25-in-h1-of-2021-22
Bewal Express
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Syed1
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Inshallah by 2025 the goal is to have exports of goods and services upto $55b (they will touch $40b this year)... Assuming remittance growth slows down and stays about $35b then we will have inflows of $90b, if by some fluke we cap imports to roughly $85-90b then we are golden and can see rapid sustained growth for the rest of the decade
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ISLAMABAD: Prime Minister Imran Khan on Monday asked the PTI spokespersons to inform the masses that there is no inflation in the country, as he expressed satisfaction over the economic team's performance and falling prices of several key commodities, The News reported.
"We had inherited a ruined economy," the premier said while chairing a meeting of the government and party spokespersons to discuss the national economy and government media strategy to counter the Opposition's narrative.
While briefing on inflation and economic situation, Federal Minister on Finance Shaukat Tareen said the inflation dropped in December as compared to the month of November. He said that it is likely to reduce further in the next month.
The minister informed the meeting that the global commodity prices were declining.
The prime minister, while addressing Tareen said that "you say the economic conditions are better while the opposition criticises the government."
Asserting that the state of the economy was better, PM Imran Khan directed that the statistics of the economy should be made public. He asked the party officials to tell the people that there is no inflation, Opposition tells lies.
"We had got a ruined economy which has considerably improved [in the PTI rule], let the opposition not exploit the situation in any way and tell the people the facts and present a factual picture before them," he said.
PM Imran Khan told the PTI spokespersons that their prime minister was "their brand", as he advised them to not let the Opposition dominate the political milieu.
"Your leader is not like those of the Opposition [...] the Opposition defends its dacoit, thief, and corrupt leaders."
GEO
"We had inherited a ruined economy," the premier said while chairing a meeting of the government and party spokespersons to discuss the national economy and government media strategy to counter the Opposition's narrative.
While briefing on inflation and economic situation, Federal Minister on Finance Shaukat Tareen said the inflation dropped in December as compared to the month of November. He said that it is likely to reduce further in the next month.
The minister informed the meeting that the global commodity prices were declining.
The prime minister, while addressing Tareen said that "you say the economic conditions are better while the opposition criticises the government."
Asserting that the state of the economy was better, PM Imran Khan directed that the statistics of the economy should be made public. He asked the party officials to tell the people that there is no inflation, Opposition tells lies.
"We had got a ruined economy which has considerably improved [in the PTI rule], let the opposition not exploit the situation in any way and tell the people the facts and present a factual picture before them," he said.
PM Imran Khan told the PTI spokespersons that their prime minister was "their brand", as he advised them to not let the Opposition dominate the political milieu.
"Your leader is not like those of the Opposition [...] the Opposition defends its dacoit, thief, and corrupt leaders."
GEO
Bewal Express
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We need to see out IT step from the measly 2bn a year to 10bn. We have enough skills in PK, as shown by PKs working abroad. We need to get Hi tech zones in every big City( i think they are working on that), and we need investment from abroad.
Syed1
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Sadly the last three months in Pak have showed me that IKs support has seriously declined now because of mehngayi and media management by the mafia. The news channel are constantly running tickers, news beats and analysis of the government's failures. Every government has some good and bad but the media is overblowing PTI's bad while giving zero coverage to their good works. This has shaped people's opinions.
I know things can change very quickly and a positive wave just six months before the elections can help swing it in PTIs favour, but as things stand we will have a very hung parliament or a razor thin majority for PML-N next time.
Pakistanis are a weird breed, you can literally loot and plunder the country but as long as you give them subsidy on food, petrol and electricity they will worship you (nausabillah).
Savak
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Pakistani people are very short sighted by nature. Pakistani entrepreneurs want fast ROI's vs Indian Entreprenuers who have a long term 10-20 year vision. We as a people are not prepared to make short term sacrifices for long term gains.
mmkextreme_1
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From my recent trip to Pakistan, must say PM Imran Khan is not popular at all with the general population. Everyone I talked to is complaining about inflation and how incomes have not kept up. Must say, everything has gotten expensive in Pakistan.
For example, my Uber ride that usually used to cost me 500-600 rupees, now costs 1k+ rupees. For us Pakistanis living abroad, this isn't really a big deal, but for the average Pakistani, this is a huge increase. This type of increase in goods and services is across the board. Pakistani people don't care about long-term policies, all they want is sasta food, gas, and utility bills. Imran Khan is investing in human development, but the benefits for such policies take time to come (the few IK supporters I talked to understand this).
Hoping that PTI can control inflation and turn around the general negative mindset people have about the government over the next year or so.
For example, my Uber ride that usually used to cost me 500-600 rupees, now costs 1k+ rupees. For us Pakistanis living abroad, this isn't really a big deal, but for the average Pakistani, this is a huge increase. This type of increase in goods and services is across the board. Pakistani people don't care about long-term policies, all they want is sasta food, gas, and utility bills. Imran Khan is investing in human development, but the benefits for such policies take time to come (the few IK supporters I talked to understand this).
Hoping that PTI can control inflation and turn around the general negative mindset people have about the government over the next year or so.
Syed1
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If Pakistanis re-elect those who have looted and plundered the country for last 30-40 years then they have only themselves to blame for the destruction that will follow. I sure hope that overseas Pakistanis curb their remittances and take them back to pre-IK level of $18b where it was stagnant for 3-4 years. What is the use for overseas to keep sending their hard earned money only for Pakistanis elected politicians looting it and laundering it back to the west. When the country will default on the back of reduced remittances maybe then people like Mamoon will stop running mouth against overseas.
Syed1
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I dearly hope Pakistanis make a sound decision when going to the polls in 2023. If they re-elect the looters and plunderers just because of subsidies on food, petrol and electricity then they risk overseas Pakistanis removing this $3b (and growing) safety fund treasure chest on the back of which the country is relying.
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Cumulative inflows under the Roshan Digital Account (RDA) reached $3.16 billion at the end of 2021, 16 months since launch of the programme, stated the State Bank of Pakistan (SBP) on Wednesday.<a href="https://t.co/ZTrNSrImL3">https://t.co/ZTrNSrImL3</a><a href="https://twitter.com/hashtag/RoshanDigitalAccount?src=hash&ref_src=twsrc%5Etfw">#RoshanDigitalAccount</a> <a href="https://twitter.com/hashtag/RDA?src=hash&ref_src=twsrc%5Etfw">#RDA</a> <a href="https://twitter.com/hashtag/SBP?src=hash&ref_src=twsrc%5Etfw">#SBP</a> <a href="https://t.co/lOqPalGqNF">pic.twitter.com/lOqPalGqNF</a></p>— Business Recorder (@brecordernews) <a href="https://twitter.com/brecordernews/status/1478636491614134274?ref_src=twsrc%5Etfw">January 5, 2022</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Cumulative inflows under the Roshan Digital Account (RDA) reached $3.16 billion at the end of 2021, 16 months since launch of the programme, stated the State Bank of Pakistan (SBP) on Wednesday.<a href="https://t.co/ZTrNSrImL3">https://t.co/ZTrNSrImL3</a><a href="https://twitter.com/hashtag/RoshanDigitalAccount?src=hash&ref_src=twsrc%5Etfw">#RoshanDigitalAccount</a> <a href="https://twitter.com/hashtag/RDA?src=hash&ref_src=twsrc%5Etfw">#RDA</a> <a href="https://twitter.com/hashtag/SBP?src=hash&ref_src=twsrc%5Etfw">#SBP</a> <a href="https://t.co/lOqPalGqNF">pic.twitter.com/lOqPalGqNF</a></p>— Business Recorder (@brecordernews) <a href="https://twitter.com/brecordernews/status/1478636491614134274?ref_src=twsrc%5Etfw">January 5, 2022</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
shaaik
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Whatever happens to Pakistan from now on will be blamed on Imran Khan one way or the other regardless whether Imran Khan would be in politics or not ..
Pakistanis probably need NS and Zardari back at looting the country to realize the importance of PTI.
Unfortunately, the common man only concern is for "two roti" at the end of the day, bigger picture goes out of the window when the stomach is empty.
I just hope PTI picks up the momentum at the right time.
Syed1
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Check out the difference in the project costs of solar/wind in PML-N era vs PTI era.
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Looking for explanations if there can be any??? <a href="https://t.co/E5yuAi7BPC">pic.twitter.com/E5yuAi7BPC</a></p>— Mobeen Hameed (@mobeen_hameed) <a href="https://twitter.com/mobeen_hameed/status/1478714315444310018?ref_src=twsrc%5Etfw">January 5, 2022</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Looking for explanations if there can be any??? <a href="https://t.co/E5yuAi7BPC">pic.twitter.com/E5yuAi7BPC</a></p>— Mobeen Hameed (@mobeen_hameed) <a href="https://twitter.com/mobeen_hameed/status/1478714315444310018?ref_src=twsrc%5Etfw">January 5, 2022</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<blockquote class="twitter-tweet" data-partner="tweetdeck"><p lang="en" dir="ltr">Congratulations to Min of Communication & NHA for saving public money through transparency & digitisation:4 lane highway - 138% reduced cost from PMLN govt; 125% increase in revenues & Rs.5.18 bn worth land freed from encroachments. All this despite global price hikes & inflation <a href="https://t.co/50kqlFDgAQ">pic.twitter.com/50kqlFDgAQ</a></p>— Imran Khan (@ImranKhanPTI) <a href="https://twitter.com/ImranKhanPTI/status/1478963510893678593?ref_src=twsrc%5Etfw">January 6, 2022</a></blockquote>
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Pakistan’s trade deficit more than doubled to $25.5 billion during the first half of current fiscal year as imports could not be brought under control despite administrative steps amid an attempt by the commerce adviser to downplay it through dodgy figures.
The Pakistan Bureau of Statistics (PBS) on Wednesday released data which showed that the trade deficit widened to $25.5 billion in the first six months (July-December) of current fiscal year due to a significant surge in imports that outpaced the increase in exports. The deficit was $13.2 billion (or 106%) higher than the comparative period of previous fiscal year, it added. The annual trade deficit target of $28.4 billion has become irrelevant due to higher imports.
Imports during the first half increased two-thirds to nearly $40.6 billion. In absolute terms, the imports grew $16.1 billion, according to the PBS.
The central bank has introduced a cash margin requirement (CMR) for more imported goods besides curtailing consumer financing to ease the import pressure. However, these measures have failed to contain imports that have risen to a new peak.
The federal government has not yet implemented any new administrative measures to supplement the central bank efforts. Finance Minister Shaukat Tarin has held numerous meetings to take steps to check imports but these too remained futile.
The outcome of such monitoring was that “the pressure on import bill was mainly due to high global commodity prices, especially energy, steel and industrial raw material”.
Tarin had assured Prime Minister Imran Khan that he would personally monitor the external sector. During the first half, exports increased one-fourth and stood at $15.1 billion as compared to $12.1 billion in the same period of previous year, according to the national data collecting agency.
In absolute terms, there was an increase of $3 billion in exports.
During the first half, the exports were equal to 57% of the annual target of $26.3 billion. However, the Ministry of Commerce projects that exports will touch $31 billion in the full fiscal year.
December data
Imports remained out of control as they came in at $7.6 billion in December 2021. They were higher by 52% or $2.6 billion over a year ago, according to the PBS.
It was the second highest import figure that kept the monthly trade deficit close to the dangerous level of $5 billion.
However, just three days ago, Commerce Adviser Abdul Razak Dawood tweeted that “early indications are that the growth in imports has started to decrease. Imports during December 2021 decreased to $6.9 billion as compared to $7.9 billion in November 2021. This is a decrease of $1 billion”.
The import figure that the adviser reported was understated by $700 million (or 10%), which raises doubts about efforts of the commerce ministry that is tasked to check the growing imports.
Dawood had also said that the import projection for December 2021 was $6.2 billion. PBS data showed that the commerce ministry’s projection went off the mark by a big margin of $1.4 billion in just one month.
Usually these projections are made after the first half of a month following a review of the import trend.
PBS said that exports of goods remained at $2.7 billion in December, higher by 16% (or $374 million) over the same month of previous year. The trade deficit widened 85% year-on-year to $4.9 billion in December 2021.
The central bank’s foreign currency reserves are constantly on the decline and dipped further to $17.9 billion, as the impact of a $3 billion Saudi Arabian loan is being diluted.
The State Bank of Pakistan on Wednesday further amended foreign exchange regulations requiring exporters to bring export proceeds.
Now, the exporters have to bring the export proceeds within a maximum period of 120 days from the date of shipment, as against the earlier maximum period of 180 days.
Exporters are keeping their money outside of the country in the hope of further depreciation of the rupee that has lost 45% of value since the Pakistan Tehreek-e-Insaf (PTI) came to power.
On a month-on-month basis, exports decreased 5.6% to $2.7 billion in December 2021 over November.
Imports dropped 3.8% (or $302 million) month-on-month to $7.6 billion. As a result, the trade deficit amounted to $4.9 billion, down only $141 million.
Published in The Express Tribune, January 6th, 2022.
The Pakistan Bureau of Statistics (PBS) on Wednesday released data which showed that the trade deficit widened to $25.5 billion in the first six months (July-December) of current fiscal year due to a significant surge in imports that outpaced the increase in exports. The deficit was $13.2 billion (or 106%) higher than the comparative period of previous fiscal year, it added. The annual trade deficit target of $28.4 billion has become irrelevant due to higher imports.
Imports during the first half increased two-thirds to nearly $40.6 billion. In absolute terms, the imports grew $16.1 billion, according to the PBS.
The central bank has introduced a cash margin requirement (CMR) for more imported goods besides curtailing consumer financing to ease the import pressure. However, these measures have failed to contain imports that have risen to a new peak.
The federal government has not yet implemented any new administrative measures to supplement the central bank efforts. Finance Minister Shaukat Tarin has held numerous meetings to take steps to check imports but these too remained futile.
The outcome of such monitoring was that “the pressure on import bill was mainly due to high global commodity prices, especially energy, steel and industrial raw material”.
Tarin had assured Prime Minister Imran Khan that he would personally monitor the external sector. During the first half, exports increased one-fourth and stood at $15.1 billion as compared to $12.1 billion in the same period of previous year, according to the national data collecting agency.
In absolute terms, there was an increase of $3 billion in exports.
During the first half, the exports were equal to 57% of the annual target of $26.3 billion. However, the Ministry of Commerce projects that exports will touch $31 billion in the full fiscal year.
December data
Imports remained out of control as they came in at $7.6 billion in December 2021. They were higher by 52% or $2.6 billion over a year ago, according to the PBS.
It was the second highest import figure that kept the monthly trade deficit close to the dangerous level of $5 billion.
However, just three days ago, Commerce Adviser Abdul Razak Dawood tweeted that “early indications are that the growth in imports has started to decrease. Imports during December 2021 decreased to $6.9 billion as compared to $7.9 billion in November 2021. This is a decrease of $1 billion”.
The import figure that the adviser reported was understated by $700 million (or 10%), which raises doubts about efforts of the commerce ministry that is tasked to check the growing imports.
Dawood had also said that the import projection for December 2021 was $6.2 billion. PBS data showed that the commerce ministry’s projection went off the mark by a big margin of $1.4 billion in just one month.
Usually these projections are made after the first half of a month following a review of the import trend.
PBS said that exports of goods remained at $2.7 billion in December, higher by 16% (or $374 million) over the same month of previous year. The trade deficit widened 85% year-on-year to $4.9 billion in December 2021.
The central bank’s foreign currency reserves are constantly on the decline and dipped further to $17.9 billion, as the impact of a $3 billion Saudi Arabian loan is being diluted.
The State Bank of Pakistan on Wednesday further amended foreign exchange regulations requiring exporters to bring export proceeds.
Now, the exporters have to bring the export proceeds within a maximum period of 120 days from the date of shipment, as against the earlier maximum period of 180 days.
Exporters are keeping their money outside of the country in the hope of further depreciation of the rupee that has lost 45% of value since the Pakistan Tehreek-e-Insaf (PTI) came to power.
On a month-on-month basis, exports decreased 5.6% to $2.7 billion in December 2021 over November.
Imports dropped 3.8% (or $302 million) month-on-month to $7.6 billion. As a result, the trade deficit amounted to $4.9 billion, down only $141 million.
Published in The Express Tribune, January 6th, 2022.
mmkextreme_1
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Agreed. I'm shell-shocked at how much support PMLN has in Pakistan (still). The fact is, as a PTI supporter, we also need to acknowledge some mistakes PTI's government has made. In Punjab, the biggest blunder IK has made is appointing Buzdar as the CM (people absolutely dislike this decision) and he is too hardheaded to reverse his decision and admit that he is wrong in appointing him. The Punjab police are even worse than before. IK had repeatedly said, before coming to power, that he would fix the law enforcement, but nothing has been done. Have already mentioned inflation.
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The members of the Prime Minister’s Economic Strategy Group on Thursday advised Imran Khan to set up a war room to build a positive narrative of the government on the economic front.
The members suggested bringing improvement in media management amid prime minister’s dissatisfaction with the performance of the government’s representatives at the public platforms.
Some of the members who publicly criticise the Pakistan Tehreek-e-Insaf’s three and a half years rule privately praised the government over its economic achievements, at least two participants of the meeting told The Express Tribune after the meeting.
Prime Minister Imran Khan chaired the meeting of the Economic Strategy Group, which has nine members from the private sector – the nine wise men that Imran Khan has picked to seek their advice on critical economic issues.
At least two members told the prime minister that a war room should be established to build the positive economic narrative of the government. The sources said that the PM was of the view that his economic achievements were not properly highlighted in the media.
When contacted, Information Minister Fawad Chaudhry said that the meeting participants were of the view that the government’s positive stories were not highlighted in the media. To a question, the minister said that the war room was already established to build a positive narrative.
The nine private members of Economic Strategy Group consist of former central bank governor Syed Saleem Raza, former Pakistan Institute of Development Economics (PIDE) vice chancellor Dr Rashid Amjad, former finance minister Dr Syed Salman Shah, Sustainable Development Policy Institute (SDPI) Executive Director Dr Abid Qaiyum Suleri, Dr ljaz Nabi, Dr Ashfaque Hassan Khan, Principal and Dean NUST, PIDE Vice Chancellor Dr Nadeemul Haque, Sakib Sherani and Tahir A Khan.
The sources said that the purpose of the meeting was to build a positive narrative of the government in the midst of growing criticism against the Rs375 billion mini-budget and the controversial State Bank of Pakistan (SBP) autonomy bill.
Sakib Sherani praised the increase in exports, better handling of Covid-19 pandemic and termed the expected economic growth of 4.5% in this fiscal year as excellent achievements, said the sources. Sherani did not respond to a message for a version.
But there has been a clear division between harsh ground realities and the government’s perception of the economy that sees increasing number of tourists as a sign of prosperity.
Going by the Labour Force Survey, graduate unemployment is very high in Pakistan. Over 31% of the youth with degrees, including professional ones, are unemployed with females at 51% and males at 16%, according to a paper jointly written by Dr Nadeemul Haque and Durr-e-Nayab. Rural graduate unemployment is much higher than urban, begging the question of mobility.
The paper further underlined that the sub-optimal nature of employment for those employed can be gauged from the fact that some 23% of the labour force is involved in unpaid labour, 13% of males and a huge 57% of the employed females. Thus, unpaid labour is prevalent across all industries in both rural and urban areas.
However, it seems that instead of focusing on bringing improvement in governance and economic performance, the government seems more concerned about building narratives.
The premier was advised that he should start his morning with a briefing on the stories published and give directions to address the problematic stories accordingly.
Another member suggested that the government should propagate that the solution to inflation was increasing wages and an aggressive media campaign should be launched.
One of the members informed the meeting that inflation would increase further to 13% next month, which would mark the fifth consecutive month of constant upward surge in the inflation index. The premier was advised to take weekly briefing on the movement in prices of important items.
The issues of adverse impacts of the SBP autonomy bill on the government’s ability to borrow from the central bank and adverse impact of retaining profits by the SBP were also highlighted.
Some members also highlighted the problem of ballooning trade deficit that has already crossed $25 billion in just six months, while pointing out that the increase in exports was largely because of a surge in commodity prices in the international market.
The adverse impact of the steep currency devaluation on the remittances and exports was also emphasised, as the exporters and overseas Pakistanis have already started holding back their money in hope of further depreciation of rupee that will ensure better returns for them.
One member suggested that the rupee-dollar parity should be restored to around Rs163 to a dollar as against Rs177, aimed at sending signals to those who are holding back dollars in overseas markets.
These members had met with Finance Minister Shaukat Tarin at the weekend and assured him that his mini-budget and controversial SBP amendment bill were defendable in the media.
Published in The Express Tribune, January 7th, 2022.
The members suggested bringing improvement in media management amid prime minister’s dissatisfaction with the performance of the government’s representatives at the public platforms.
Some of the members who publicly criticise the Pakistan Tehreek-e-Insaf’s three and a half years rule privately praised the government over its economic achievements, at least two participants of the meeting told The Express Tribune after the meeting.
Prime Minister Imran Khan chaired the meeting of the Economic Strategy Group, which has nine members from the private sector – the nine wise men that Imran Khan has picked to seek their advice on critical economic issues.
At least two members told the prime minister that a war room should be established to build the positive economic narrative of the government. The sources said that the PM was of the view that his economic achievements were not properly highlighted in the media.
When contacted, Information Minister Fawad Chaudhry said that the meeting participants were of the view that the government’s positive stories were not highlighted in the media. To a question, the minister said that the war room was already established to build a positive narrative.
The nine private members of Economic Strategy Group consist of former central bank governor Syed Saleem Raza, former Pakistan Institute of Development Economics (PIDE) vice chancellor Dr Rashid Amjad, former finance minister Dr Syed Salman Shah, Sustainable Development Policy Institute (SDPI) Executive Director Dr Abid Qaiyum Suleri, Dr ljaz Nabi, Dr Ashfaque Hassan Khan, Principal and Dean NUST, PIDE Vice Chancellor Dr Nadeemul Haque, Sakib Sherani and Tahir A Khan.
The sources said that the purpose of the meeting was to build a positive narrative of the government in the midst of growing criticism against the Rs375 billion mini-budget and the controversial State Bank of Pakistan (SBP) autonomy bill.
Sakib Sherani praised the increase in exports, better handling of Covid-19 pandemic and termed the expected economic growth of 4.5% in this fiscal year as excellent achievements, said the sources. Sherani did not respond to a message for a version.
But there has been a clear division between harsh ground realities and the government’s perception of the economy that sees increasing number of tourists as a sign of prosperity.
Going by the Labour Force Survey, graduate unemployment is very high in Pakistan. Over 31% of the youth with degrees, including professional ones, are unemployed with females at 51% and males at 16%, according to a paper jointly written by Dr Nadeemul Haque and Durr-e-Nayab. Rural graduate unemployment is much higher than urban, begging the question of mobility.
The paper further underlined that the sub-optimal nature of employment for those employed can be gauged from the fact that some 23% of the labour force is involved in unpaid labour, 13% of males and a huge 57% of the employed females. Thus, unpaid labour is prevalent across all industries in both rural and urban areas.
However, it seems that instead of focusing on bringing improvement in governance and economic performance, the government seems more concerned about building narratives.
The premier was advised that he should start his morning with a briefing on the stories published and give directions to address the problematic stories accordingly.
Another member suggested that the government should propagate that the solution to inflation was increasing wages and an aggressive media campaign should be launched.
One of the members informed the meeting that inflation would increase further to 13% next month, which would mark the fifth consecutive month of constant upward surge in the inflation index. The premier was advised to take weekly briefing on the movement in prices of important items.
The issues of adverse impacts of the SBP autonomy bill on the government’s ability to borrow from the central bank and adverse impact of retaining profits by the SBP were also highlighted.
Some members also highlighted the problem of ballooning trade deficit that has already crossed $25 billion in just six months, while pointing out that the increase in exports was largely because of a surge in commodity prices in the international market.
The adverse impact of the steep currency devaluation on the remittances and exports was also emphasised, as the exporters and overseas Pakistanis have already started holding back their money in hope of further depreciation of rupee that will ensure better returns for them.
One member suggested that the rupee-dollar parity should be restored to around Rs163 to a dollar as against Rs177, aimed at sending signals to those who are holding back dollars in overseas markets.
These members had met with Finance Minister Shaukat Tarin at the weekend and assured him that his mini-budget and controversial SBP amendment bill were defendable in the media.
Published in The Express Tribune, January 7th, 2022.
Greenstorm
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Its funny how posters living abroad are going after Pakistanis in this thread. Overseas Pakistanis did not elect IK in 2018. He attained power through support of Pakistani residents who voted for him and attended his rallies in droves.
Us Pakistanis like to complain about increasing inflation etc but deep down people know that IK had little time to rectify decades of corruption and mismanagement.
And justst because people are complaining about PTI doesn't mean that they will vote for N league (a leaderless party anyways) or Billo. Its evident from the fact that there are almost no protests in the streets against government despite record inflation. PDM's failure is another clear indication that people still believe in IK.
Moreover, no one runs election campaign like IK does. One jalsa at minare
Pakistan and winds will change. He still has the street power.
PTI will win with a greater margin in 2023 iinshAllah. So all of you guys sitting abroad, have some faith.
Us Pakistanis like to complain about increasing inflation etc but deep down people know that IK had little time to rectify decades of corruption and mismanagement.
And justst because people are complaining about PTI doesn't mean that they will vote for N league (a leaderless party anyways) or Billo. Its evident from the fact that there are almost no protests in the streets against government despite record inflation. PDM's failure is another clear indication that people still believe in IK.
Moreover, no one runs election campaign like IK does. One jalsa at minare
Pakistan and winds will change. He still has the street power.
PTI will win with a greater margin in 2023 iinshAllah. So all of you guys sitting abroad, have some faith.
Syed1
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Actually I was more 'optimistic' about PTI chances in 2023 when I was abroad, but having been in Pak for better part of three months and actively trying to survey people's opinions about the government has led me to be less 'optimistic' about their chances. Yes, winds can change at any time but as things stand not looking too good for PTI. KP local bodies elections, Khanewal, Sialkot and Karachi by-polls are all indications of where things are headed.
Greenstorm
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By-elections were never PTI's strong suit.
As I said, our nation likes complaining but PDM's massive failure is a clear indication as where people actually stand.
You need a broader view. Take a look at IK's life trajectory. Its only moved in one direction. He is meant to set us on the right course as a nation. Only death can defeat an extremely determined, hardworking and truthful person like IK. Have faith, corrupt looters are not coming back.
Lifafa media along with Indian propoganda pieces are busy building this narrative that IK has lost popularity. Don't fall for it.
Savak
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PTI is dealing with an opposition with a lot of money and with the knowledge on where to apply the money i.e. which politicians, bureacrats, judges, election commission officials, police officials to buy, they know how to manipulate the system to their advantage.
Greenstorm
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IK has been facing the same opposition for 20+ years. Have they managed to stop him ? PTI did the hard part in 2018. 2023 will be comparatively easy.
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