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Pakistan economy under the PDM government & now the caretaker administration

Stock markets is on a nose dive atleast 10~12% value slashed add to it 23% inflation and political engg. which investor will have confidence
 
daytrader said:
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The big default? Pakistan among a dozen countries in ‘danger zone’

LONDON: Traditional debt crisis signs of crashing currencies, 1,000 basis points bond spreads and burned foreign exchange reserves point to a record number of developing nations now in trouble.

Lebanon, Sri Lanka, Russia, Suriname and Zambia are already in default, Belarus is on the brink and at least another dozen are in the danger zone as rising borrowing costs, inflation and debt all stoke fears of economic collapse.

Totting up the cost is eye-watering. Using 1,000 basis points bond spreads as a pain threshold, analysts calculate $400 billion of debt is in play. Argentina has by far the most at over $150bn, while the next in line are Ecuador and Egypt with $40bn-$45bn.

Crisis veterans hope many can still dodge default, especially if global markets calm and the IMF rows in with support, but these are the countries at risk.

Lebanon, Sri Lanka, Russia, Suriname and Zambia already in default, Belarus on the brink

ARGENTINA: The sovereign default world record holder looks likely to add to its tally. The peso now trades at a near 50 per cent discount in the black market, reserves are critically low and bonds trade at just 20 cents in the dollar — less than half of what they were after the country’s 2020 debt restructuring.

The government doesn’t have any substantial debt to service until 2024, but it ramps up after that and concerns have crept in that powerful vice president Cristina Fernandez de Kirchner may push to renege on the International Monetary Fund.

UKRAINE: Russia’s invasion means Ukraine will almost certainly have to restructure its $20bn plus of debt, heavyweight investors such as Morgan Stanley and Amundi warn.

The crunch comes in September when $1.2bn of bond payments are due. Aid money and reserves mean Kyiv could potentially pay. But with state-run Naftogaz this week asking for a two-year debt freeze, investors suspect the government will follow suit.

TUNISIA: Africa has a cluster of countries going to the IMF but Tunisia looks one of the most at risk. A near 10pc budget deficit, one of the highest public sector wage bills in the world and there are concerns that securing, or at least sticking to, an IMF programme may be tough due to President Kais Saied’s push to strengthen his grip on power and the country’s powerful, incalcitrant labour union.

Tunisian bond spreads — the premium investors demand to buy the debt rather than US bonds — have risen to over 2,800 basis points and along with Ukraine and El Salvador, Tunisia is on Morgan Stanley’s top three list of likely defaulters.

GHANA: Furious borrowing has seen Ghana’s debt-to-GDP ratio soar to almost 85pc. Its currency, the cedi, has lost nearly a quarter of its value this year and it was already spending over half of tax revenues on debt interest payments. Inflation is also getting close to 30pc.

EGYPT: The country has a near 95pc debt-to-GDP ratio and has seen one of the biggest exoduses of international cash this year — some $11bn according to JPMorgan. Fund firm FIM Partners estimates Egypt has $100bn of hard currency debt to pay over the next five years, including a meaty $3.3 billion bond in 2024.

Cairo devalued the pound 15pc and asked the IMF for help in March but bond spreads are now over 1,200 basis points and credit default swaps (CDS) — an investor tool to hedge risk — price in a 55pc chance it fails on a payment.

Francesc Balcells, CIO of EM debt at FIM Partners, estimates though that roughly half the $100bn Egypt needs to pay by 2027 is to the IMF or bilateral, mainly in the Gulf.

KENYA: Kenya spends roughly 30pc of revenues on interest payments. Its bonds have lost almost half their value and it currently has no access to capital markets — a problem with a $2bn dollar bond coming due in 2024.

On Kenya, Egypt, Tunisia and Ghana, Moody’s David Rogovic said: “These countries are the most vulnerable just because of the amount of debt coming due relative to reserves, and the fiscal challenges in terms of stabilising debt burdens.”

ETHIOPIA: Addis Ababa plans to be one of the first countries to get debt relief under the G20 Common Framework programme. Progress has been held up by the country’s ongoing civil war though in the meantime it continues to service its sole $1bn international bond.

EL SALVADOR: Making bitcoin legal tender all but closed the door to IMF hopes. Trust has fallen to the point where an $800 million bond maturing in six months trades at a 30pc discount and longer-term ones at a 70pc discount.

PAKISTAN: Pakistan struck a crucial IMF deal this week. The breakthrough could not be more timely, with high energy import prices pushing the country to the brink of a balance of payments crisis.

Foreign currency reserves have fallen to as low as $9.8bn, hardly enough for five weeks of imports. The Pakistani rupee has weakened to record lows. The new government needs to cut spending rapidly now as it spends 40pc of its revenues on interest payments.

BELARUS: Western sanctions wrestled Russia into default last month and Belarus now facing the same tough treatment having stood with Moscow in the Ukraine campaign.

ECUADOR: The Latin American country only defaulted two years ago but it has been rocked back into crisis by violent protests and an attempt to oust President Guillermo Lasso.

It has lots of debt and with the government subsidising fuel and food JPMorgan has ratcheted up its public sector fiscal deficit forecast to 2.4pc of GDP this year and 2.1pc next year. Bond spreads have topped 1,500 bps.

NIGERIA: Bond spreads are just over 1,000 bps, but Nigeria’s next $500m bond payment in a year’s time should easily be covered by reserves which have been steadily improving since June. It does though spend almost 30pc of government revenues paying interest on its debt.

DAWN - Reuters
 
The benchmark KSE-100 index plunged by more than 700 points during intraday trade on Monday, with analysts attributing the development to the political uncertainty arising out of the outcome of the Punjab by-polls held a day earlier and the rupee losing ground against the dollar.

Stocks plunged more than 600 points shortly after trading began and lost 713.19 points against the previous day's close of 42,074.91 to reach 41,361.72 by 12:39pm.

Head of research at Intermarket Securities Raza Jafri viewed the sharp decline in context of the political situation following the by-elections in Punjab, which the PTI won by a considerable margin.

Speaking to Dawn.com, Jafri said the by-election results "strengthen calls for early general elections".

"This may eventually work out in Pakistan's favour," he said.

"In the interim, however, political uncertainty has increased and it comes at a time when Pakistan's economy is in a fragile state," he said.

He went on to say that complying with the International Monetary Fund's (IMF's) conditions for the resumption of its $6 billion loan programme with Pakistan "may prove difficult in such conditions".

"And that is why both equities and the rupee are reacting negatively," he explained.

Ali Malik, chief executive of First National Equities Limited, further pointed out that the rupee's freefall against the US dollar was another reason for the bearish trend at the Pakistan Stock Exchange (PSX).

The dollar gained Rs4.3 in the interbank market today and was trading at a record Rs215.25 against the local currency at 1:18pm.

"The pace at which the value of dollar is rising is increasing the chances of inflation in the country. Inflation could rise further in the coming days which means that the interest rate would also increase," he said, adding that this was the reason local and foreign investors were prioritising selling shares.

On the impact of the political situation, he said investors were wary due to the ongoing political uncertainty and "dangers posed to coalition partners" in the Centre.

"As a result, trading volume in the market is declining day by day," Malik said.

Ahsan Mehanti of the Arif Habib Corporation said scrips at the PSX were under "massive pressure" due to political uncertainty and the decline in the value of the rupee after the PML-N's loss in the Punjab by-polls.

He added that a further delay of two to three weeks in the release of the long-awaited IMF tranche and uncertainty regarding funding from friendly countries — a development that was expected to strengthen the rupee — played the role of a catalyst for the bearish trend at the PSX.

https://www.dawn.com/news/1700342/kse-100-plummets-by-more-than-700-points-in-intraday-trading
 
silentkiller187 said:
The benchmark KSE-100 index plunged by more than 700 points during intraday trade on Monday, with analysts attributing the development to the political uncertainty arising out of the outcome of the Punjab by-polls held a day earlier and the rupee losing ground against the dollar.

Stocks plunged more than 600 points shortly after trading began and lost 713.19 points against the previous day's close of 42,074.91 to reach 41,361.72 by 12:39pm.

Head of research at Intermarket Securities Raza Jafri viewed the sharp decline in context of the political situation following the by-elections in Punjab, which the PTI won by a considerable margin.

Speaking to Dawn.com, Jafri said the by-election results "strengthen calls for early general elections".

"This may eventually work out in Pakistan's favour," he said.

"In the interim, however, political uncertainty has increased and it comes at a time when Pakistan's economy is in a fragile state," he said.

He went on to say that complying with the International Monetary Fund's (IMF's) conditions for the resumption of its $6 billion loan programme with Pakistan "may prove difficult in such conditions".

"And that is why both equities and the rupee are reacting negatively," he explained.

Ali Malik, chief executive of First National Equities Limited, further pointed out that the rupee's freefall against the US dollar was another reason for the bearish trend at the Pakistan Stock Exchange (PSX).

The dollar gained Rs4.3 in the interbank market today and was trading at a record Rs215.25 against the local currency at 1:18pm.

"The pace at which the value of dollar is rising is increasing the chances of inflation in the country. Inflation could rise further in the coming days which means that the interest rate would also increase," he said, adding that this was the reason local and foreign investors were prioritising selling shares.

On the impact of the political situation, he said investors were wary due to the ongoing political uncertainty and "dangers posed to coalition partners" in the Centre.

"As a result, trading volume in the market is declining day by day," Malik said.

Ahsan Mehanti of the Arif Habib Corporation said scrips at the PSX were under "massive pressure" due to political uncertainty and the decline in the value of the rupee after the PML-N's loss in the Punjab by-polls.

He added that a further delay of two to three weeks in the release of the long-awaited IMF tranche and uncertainty regarding funding from friendly countries — a development that was expected to strengthen the rupee — played the role of a catalyst for the bearish trend at the PSX.

https://www.dawn.com/news/1700342/kse-100-plummets-by-more-than-700-points-in-intraday-trading
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In a desperate attempt to please their American masters, the Neutrals took a massive gamble with a stable but fragile PK economy. Today its unstable and even more fragile, so General Bajwa was it worth it?
 
I will never understand PDM's hatred of exports and love of imports. Every decision they make is counterproductive.
 
JaDed said:
Not surprising to see Argentina there, but surprised not to see Laos there.
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Do you think India would ever offer Pakistan a sovereign loan of something like US$ 10-20 billion and say now you behave or else you have to pay us our money back immediately?
 
The Pakistan Stock Exchange (PSX) witnessed intense selling pressure on Tuesday as the benchmark KSE-100 index lost over 900 points.

The market's decline coincided with the rupee falling to an all-time low against the dollar for a second consecutive day.

According to the PSX website, the KSE-100 Index opened at 41,367.11 points and went up 176 points initially.

However, after 10:30am the bears took control and the market began sliding. At around 3:25pm, the index hit 40,313.78 points — a decline of 1,053.33 points or 2.55 per cent.
 
Ratings agency Fitch has revised Pakistan's outlook from 'stable' to 'negative', citing several reasons for the downgrade, including adjustment risks, financing, political risks and declining reserves.

In a report issued on Monday, the New York-based agency — one of the three major global rating agencies — also affirmed Pakistan's Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) at 'B-'.

Fitch noted a "significant deterioration" in Pakistan's external liquidity position and financing conditions since the start of the year.

While the ratings agency assumed the International Monetary Fund's (IMF) executive board would approve the staff-level agreement with Pakistan reached earlier this month, it saw "considerable risks" to implementation.

The agency also saw risks to continued access to financing after the expiry of the extended funded facility (EFF) supported programme in June next year amid a "tough political and economic climate".

Fitch also referred to former prime minister Imran Khan's ouster through a no-confidence vote in April and his demand for early elections.

"The new government is supported by a disparate coalition of parties with only a slim majority in parliament. Regular elections are due in October 2023, creating the risk of policy slippage after the conclusion of the IMF programme.

"Renewed political volatility cannot be excluded and could undermine the authorities' fiscal and external adjustment, as happened in early 2022 and 2018, particularly in the current environment of slowing growth and high inflation," it added.

Reserves and deficit

According to Fitch's report, another factor behind the downgrade was the pressure on foreign exchange reserves, which it noted, had declined to about $10 billion or just over one month of current external payments by June this year, down from about $16bn at this time last year.

"We estimate the CAD (current account deficit) reached $17bn (4.6 per cent of GDP) in fiscal year ended June 2022 (FY22), driven by soaring global oil prices and a rise in non-oil imports boosted by strong private consumption.

"Fiscal tightening, higher interest rates, measures to limit energy consumption and imports underpin our forecast of a narrowing CAD to $10bn (2.6pc of GDP) in FY23."

Forecast

Fitch said that Pakistan's 'B-' rating reflected recurring external vulnerability, a narrow fiscal revenue base and low governance indicator scores compared with the 'B' median.

It noted that while the country's external funding conditions and liquidity would likely improve as a result of the staff-level agreement with the IMF, slippage against programme conditions was a risk and could "quickly lead to renewed strains, while diminished [foreign exchange] reserves and high funding needs now leave less room for error".

The agency predicted that Pakistan's fiscal deficit would reduce to 5.6pc of the GDP in FY23, compared to 6.1pc last year. This is almost 1pc higher than the government's target of 4.9pc.

"We expect debt/GDP to decline to 66pc in FY23 and remain on a downward trend, helped by high inflation and a modest primary deficit, which we forecast at 0.9pc of GDP in FY23, down from 2.8pc of GDP in FY22."

Fitch predicted that average inflation would remain at 19pc in the current fiscal year and 8pc in FY24, citing energy price hikes which it said would fuel broad-based inflation.

The ratings agency forecast slower economic growth this year, predicting it at 3.5pc, compared to the government's 5pc target.

Fiscal and monetary tightening, high imported inflation, and a weaker external demand outlook would all hit household and business confidence, it stated.
 
“We think that we will get $1.2bn in deferred oil payment from a friendly country. We think that a foreign country will invest between $1.5bn to $2bn in stocks on a G2G (government-to-government) basis, and another friendly country will perhaps give us gas on deferred payment and yet another friendly country will make some deposits," he said without naming the friendly nations.


“We will, God willing, fill this gap in the month of July,” he said.
Mr. Ismail on Saturday referred to the shortfall in foreign reserves highlighted by the International Monetary Fund (IMF), Dawn newspaper said.
 
On the verge of default where are the so called intellectuals also where is PP's chor brigade the corrupt judges should have had taken the dissidents to their fate bu they are also part of this gang shameful
 
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The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index dipped below the 40,000-mark in afternoon trading on Thursday — shedding 591 points and going as low as 39,868 — as the ongoing “political uncertainty” prompted a sell-off from nervous investors.

It returned above the 40,000-mark shortly after.

According to the PSX website, the index was at 40,034.15 points, down 425.55 points or 1.05 per cent, from the previous close of 40,459.70 at 1:05pm.
 
MenInG said:
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index dipped below the 40,000-mark in afternoon trading on Thursday — shedding 591 points and going as low as 39,868 — as the ongoing “political uncertainty” prompted a sell-off from nervous investors.

It returned above the 40,000-mark shortly after.

According to the PSX website, the index was at 40,034.15 points, down 425.55 points or 1.05 per cent, from the previous close of 40,459.70 at 1:05pm.
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Mafia supporters have disappeared. Where are the supporters of the chores? Too embarrassed at this total disaster from which we may never recover from. But wasn't this the plan all along
 
Chaos crisis turmoil current scenario in Pakistan virtually no govt and imagine how polarised it could be if PTI gets govt in Punjab along with KP
Money launderer SS for the sake of country should dissolve this imported govt.
Inflation 32%, Petrol 232 interest rate 17½ $$ at 226 a complete mess with foreign reserves drained to $8billion
 
A sort of rift appears to have emerged as the top leadership of Businessman Group (BMG) has contested the warning of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) chief that Pakistan is heading towards a Sri Lanka-like crisis.

On Thursday, FPCCI chief Irfan Iqbal Sheikh told a press conference that a national security issue had emerged after a steep fall in the rupee value and if the dollar appreciation was not contained, “Pakistan would become Sri Lanka.”

He said importers were running from pillar to post in getting the dollar and in case the situation persists, a petrol crisis would emerge as banks were opening the letters of credit (LCs) at Rs242 for a dollar.

Highlighting the government’s non-seriousness, Mr Irfan said the government had yet to appoint a full-fledged State Bank of Pakistan (SBP) governor, while the acting SBP chief is not interested to meet with the FPCCI leadership.

As a result, commercial banks were enjoying a heyday by indulging in speculation about the exchange rate, which was evident from the forward buying of a dollar at Rs245, he said.

He urged the government to appoint a permanent SBP government in the next 48 hours and also fix rupee-dollar parity for the next 15 days to avert any serious economic meltdown.

Speaking at a press conference after chairing an SOS meeting of key stakeholders representing all economic sectors at the Karachi Chamber of Commerce and Industry (KCCI) on the current economic crisis, BMG chairman Zubair Motiwala ruled out the possibility of a Sri Lanka-like crisis saying that Pakistan was a land of 220m people and an agrarian country with very different dynamics.

Over 50 representatives of trade and industry including prominent businessmen like Muhammad Ali Tabba, Aqeel Karim Dhedhi and Ali Jameel attended the brainstorming session to find workable solutions to revive the deteriorating economy.

They called upon the government to immediately impose an economic emergency and fix the dollar rate for at least a month.

Mr Motiwala and KCCI President Muhammad Idrees expressed deep concerns over the government’s non-serious attitude towards dealing with economic challenges, heightened political uncertainty, steep currency devaluation, ineffective SBP role and unregulated profiteering by banks.

He demanded that the SBP governor should be appointed as soon as possible to manage the affairs of the central bank.

The industries are unable to ascertain the selling price and manufacturing cost of their products amid such an intense level of exchange rate uncertainty, Mr Motiwala added.

Mr Idrees said the decision to ban the import of raw materials to reduce import bill should be reconsidered as it will have adverse consequences on the economy as it will lead to halting the production processes, resulting in decreased progress, leading to reduced export quantity as well.

Meanwhile, Hyderabad Cha*mber of Commerce and Indu*stry President Adeel Siddiqui in a statement on Thursday urged Prime Minister Shehbaz Sharif to impose an economic emergency without any delay and also consult all stakeholders to find out a solution to the foreign exchange crisis.

He said that a crisis like Sri Lanka was staring at Pakistan and deplored the fact that the federal government had yet to appoint the SBP governor.

Published in Dawn, July 22nd, 2022
 
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index on Friday plunged by more than 290 points during intraday trading.

According to the PSX website, stocks initially started in the green. However as the day progressed, the index bottomed out at 39,541 by 11:30am, sliding 290.75 points from yesterday’s close of 39,831.75.

The index then made a slight recovery and settled at 39,726.48 points, down 105.27, before the prayer break.

Head of research at Intermarket Securities Raza Jafri said that the KSE-100 index was “so far holding its ground better than the last few days”.
 
MenInG said:
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index on Friday plunged by more than 290 points during intraday trading.

According to the PSX website, stocks initially started in the green. However as the day progressed, the index bottomed out at 39,541 by 11:30am, sliding 290.75 points from yesterday’s close of 39,831.75.

The index then made a slight recovery and settled at 39,726.48 points, down 105.27, before the prayer break.

Head of research at Intermarket Securities Raza Jafri said that the KSE-100 index was “so far holding its ground better than the last few days”.
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[MENTION=131701]Mamoon[/MENTION]
You talked about the Stock Exchange dropping under PTI as a sign of poor economic management. Its dropped by over % since the " proper PM" took over. The Rp has dropped by close 25% and its going to deprecate even more because they don't have a clue
 
This government is going to make sure the in the future Pakistan will be buying agricultural products from foreign countries that are harvested right on our soil.
 
Acting Governor State Bank of Pakistan (SBP) Dr Murtaza Syed on Saturday said Pakistan’s $33.5 billion external financing needs were fully met for financial year 2022/23, adding that “unwarranted” market concerns about its financial position will dissipate in weeks.

Fears have risen about Pakistan’s stuttering economy as the rupee fell nearly eight per cent against the US dollar in the last trading week, while forex reserves stand below $10 billion with inflation at the highest in more than a decade.

“Our external financing needs over the next 12 months are fully met, underpinned by our ongoing IMF programme,” Syed told Reuters in an emailed reply to questions.

Pakistan last week reached a staff-level agreement with the IMF for the disbursement of $1.17bn in critical funding under resumed payments of a bailout package.

Dawn
 
State Bank of Pakistan (SBP) Acting Governor Dr Murtaza Syed has refuted talk that the country was headed towards an economic catastrophe, saying “Pakistan is not vulnerable as [is] being assumed amid burgeoning global inflation”.

Dr Syed made this observation during a podcast conducted by the SBP on Saturday discussing the overall economic situation. This is the second time within a span of 24 hours that the SBP acting governor addressed the economic situation.

Fears have risen about Pakistan’s stuttering economy as the rupee fell nearly eight per cent against the US dollar in the last trading week, while forex reserves stand below $10 billion with inflation at the highest in more than a decade.

Yesterday, he told Reuters that Pakistan’s s $33.5 billion external financing needs were fully met for financial year 2022/23, adding that “unwarranted” market concerns about its financial position will dissipate in weeks.

In the podcast, the SBP governor underlined that Pakistan was not vulnerable “because it has the International Monetary Fund (IMF) cover”.

He shared the examples of countries like Ghana, Zambia, Tunisia and Angola, saying they would suffer economically owing to their not being in an IMF programme.

“Other countries having no IMF programme will suffer badly in the next 12 months due to rising global inflation,” he said.

He insisted that the IMF programme was “on track” as the staff-level agreement had been received, which according to Dr Syed, was a significant milestone.

“We achieved the agreement on July 13 which means the IMF staff is satisfied with our measures to complete the review.”

He added that Pakistan’s debt-to-GDP ratio was 70 per cent, which is lower than Sri Lanka, Ghana and other countries whose comparisons were being drawn with each other.

He explained that short-term debt had to be looked into. “In our case, it is 7pc [of total external debt].”

“It is also important to see on what terms borrowing is made. Mere 20pc of our external debt is based on commercial terms, while the rest is concessional, which is easier to return.”

Underlining measures taken by the SBP and the government to streamline the economy, he stressed the need to analyse the adjustment of policies.

“In Pakistan’s case, since our growth rate is doing well, we can afford to slow the economy and work is underway [on it],” he added, and mentioned the recent interest-rate hike as one of those measures.

Dr Syed said the next 12 months would be “difficult” for global economies in view of the “inflation supercycle”.

In response to a question, he said the acting governor has all authorities as that of a governor, except “signing on currency notes”.

SBP Deputy Governor Dr Inayat Hussain said the country’s reserves were sufficient enough to carry it through the next few months.

He also informed the host that the country had gold worth $3.9 billion which was in addition to the overall reserves of over $9 billion.

DAWN
 
Pak Cabinet approves ordinance to sell state’s assets to foreign countries
Pakistan's Cabinet approved an ordinance on Saturday for the emergency sale of state’s assets to foreign countries.

The decision was taken in a bid to sell stakes of oil and gas companies and government-owned power plants to the UAE to raise USD 2 billion to USD 2.5 billion to avoid the looming default.

But President Arif Alvi has not signed the ordinance yet, it said.
 
Pakistan Destruction Movement on its mission now a number of national assets to be mortgaged with friendly countries another low
 
Cover Drive Six said:
Pak Cabinet approves ordinance to sell state’s assets to foreign countries
Pakistan's Cabinet approved an ordinance on Saturday for the emergency sale of state’s assets to foreign countries.

The decision was taken in a bid to sell stakes of oil and gas companies and government-owned power plants to the UAE to raise USD 2 billion to USD 2.5 billion to avoid the looming default.

But President Arif Alvi has not signed the ordinance yet, it said.
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This doesn’t seem like a great idea.. maybe economists can be a pros and cons list for this vs Default and public can have a better picture.
 
Hopefully Regime Change mission to fall flat tomorrow big task ahead for PTI what can they do in Punjab against a limp federal government
 
Finance Minister Miftah Ismail on Wednesday said the government was amending the laws to enable the sale of shares of listed state-owned entities (SOEs) with a buyback option to friendly countries on a government-to-government (G2G) basis and help bridge a part of $4bn financing gap estimated by the International Monetary Fund (IMF) for the current fiscal year.

Speaking at a seminar on SOEs corporate governance, the minister also said the ban on imports would be lifted in a couple of weeks and all prior actions agreed upon under the staff-level agreement with the IMF had been completed and there was no more hitch to be able to get the first tranche in the later part of August.

Without naming the Inter-Government Commercial Transaction Act 2022 that the federal cabinet approved later in the day, the finance minister said the law was necessary because the existing privatisation law did not allow such commercial transactions on a G2G basis.

An official statement after the cabinet meeting said the cabinet approved ‘Inter-Government Commercial Trans**action Act 2022’ presented by the ministry of law and justice and referred it to the relevant standing committee of the parliament. The cabinet was informed that the law would provide confidence to foreign investors and also increase foreign investment on a G2G basis in developmental agreements. The meeting was told that it was for the first time that practical step was being taken to protect G2G agreements and make them transparent.

Laws, not people, need to be changed to make state firms work efficiently, says Miftah

The minister also talked at length about the prior actions committed with the IMF for the revival of its programme and said the government would be lifting the ban on imports in a couple of weeks because it created difficulties for the people. Mr Ismail said Pakistan had a persistent issue with the SOEs as some of them were badly managed and while some of them were important for service delivery but even those were not providing services and were rather creating problems in the budget.

Mr Ismail said that most of the SOEs had professional people running them as he had personal experience working with boards of PIA, Sui Southern Gas Company and so were others like OGDCL and power distribution companies. Yet they were not able to perform which meant that maybe laws and governance structures restrict their ability to perform. Therefore, the country perhaps needed better law and governance structures to make such entities perform or better ways to expedite their privatisation.

He said there had been no progress on privatisation either over the past decades. A small bank has been losing money since 2007 and on the privatisation list since 2008 but there may be something wrong with laws that it continues to bleed and could not be privatised. Likewise, Roosevelt Hotel in New York has been on the active privatisation list for 26 years since 1996.

He said the country faced an LNG shortage because the ministers and officers in the previous government were scared of the National Accountability Bureau and its law to take decisions and book future orders. On the other hand, such a law also provided an excuse to the people not to work or take decisions which had a huge cost to the nation.

He said NAB had been in place for 20 years but the level of corruption or perception of it did not go down. Similarly, there had been Public Procurement Regulatory Authority (PPRA) and its laws for more than 20 years but he did not know if procurement costs had been lower and things get better than they were before PPRA.

The reason was that these laws were a straightjacket and provided some people an excuse not to work. Therefore, the change in SOEs-related laws would be made “appropriately to sell SOEs shares to a friendly country through a stock exchange” and two LNG-based power projects owned by the federal government — Balloki and Haveli Bahadur Shah — to another friendly country.

Mr Ismail despised that even though talks for these transactions had not begun, some people had started criticising the sale of “family silver”. “We are only selling shares traded at the stock exchange and only a little bit of each of them. We are not selling majority shares or ownership shares and we are selling a small number of shares on buyback option,” he said, adding that the government could buy back those shares at a later stage if it so desires with improved economic conditions.

Published in Dawn, July 28th, 2022
 
The industrialists in the country fear closure of industry in the wake of restrictions on the customs tariff chapter 84 and 86 imports.

If import of machinery and the parts is halted, the industry would stop running gradually, they say mentioning some of the sectors have slashed their productions as they are in a difficult situation in the face of growing currency crisis.

The State Bank Foreign Exchange Department (FEOD) has made customs tariff chapter 84, 85 import payments conditional on its approval. The commercial banks, after this State Bank’s condition, are not making dollars available to the importers. After the circular issued by the FEOD on July 5, the import of every kind of plant and machinery, capital goods and raw material has stopped. Some 2000 consignments are stuck at different ports and almost same number of consignments is on its way.

Before that, about 1000 consignments remained stuck at the port after government slapped a ban on the import of luxury items. The importers had to pay heavy demurrage to the shipping companies.

The industrialists say they need a supply chain to run industry, adding big industries require raw material all the time. The State Bank’s decision severely affected the auto industry, mobile phone manufacturing and big industries negatively. The most concerned are those industrialists whose consignments have reached at the port and are being asked by the suppliers to pay the bill. Though importers have the money but are unable to send the amount to them. Those who import goods under Cash Against Document (CAD) are of the view their clients are getting angry with them as they are not able to make payment timely.

They say they can’t tell the suppliers we are not getting dollars, as it’s against the interest of the country. “But, as a result we will not get imported goods in future”, they say.

Sources say FPCCI, Pakistan Business Council and members of industry organisations have approached the authorities to apprise them of severity of the issue. The issue is still unsolved. When contacted, a Finance Ministry officer told this correspondent they are aware of the issue. The ban on imports will remain imposed till the last week of August, he said. It will be lifted when the government gets loan tranche from the IMF, he said.

thenews
 
Kianig89 said:
Hopefully Regime Change mission to fall flat tomorrow big task ahead for PTI what can they do in Punjab against a limp federal government
Click to expand...

Perhaps IK should not interfere at all now.
Let the regime change takes its course - PDM and PPP wins the next (rigged) election. The country runs out of cash and goes bankrupt in about a year - and ONLY THEN - the neutrals May lose interest in the politics because there won’t be any money left.
Let the army run out of cash and resources and we can start sending them home.

This is the only way we are gonna get rid of the traitor generals.
As long as there are loan dollars pouring in, and the army takes a big chunk in the budget - these traitor army generals are not going anywhere.
 
Dollar passed 240 each passing day foreign debt is soaring no solution from CDA PM
He should resign this has already created chaos
 
ISLAMABAD: Pakistan Tehreek-e-Insaf (PTI) Chairman and former premier Imran Khan has agreed to sign the “Charter of Economy” (CoE) to take the country out of the current financial crisis.

The CoE has been prepared by the Rawalpindi Chamber of Commerce and Industry (RCCI).

The PTI chairman expressed his willingness to sign the CoE in a meeting with the delegation of the chamber.

In a statement, the RCCI said that it had started a campaign to bring all the political parties on the same page to get the country out of the economic crisis.

A senior leader of the RCCI termed the meeting with the PTI chairman beneficial and his agreement to the CoE a “welcome sign” for the business community.

He said the delegation also discussed the Ring Road project and the Lai Expressway with the former premier.

https://tribune.com.pk/story/2368279/imran-agrees-to-sign-charter-of-economy
 
First and foremost Dollar rate should be fixed for sometime to avoid uncertainty a decisive session should be held with IMF, privatisation of dogs should be done in a professional and transparent way, perks no benefits of elite should be taken away, special consideration for export sector
 
Political turmoil intensifying market uncertainties, warns finance ministry

ISLAMABAD: Painting an uncertain economic outlook, the Ministry of Finance on Thursday warned that prevailing political unrest was causing governance problems and intensifying the market uncertainties already caused by low foreign exchange reserves and external pressures.

“Inflationary and external sector risks are building macroeconomic imbalances in the economy. Furthermore, the ongoing political unrest is increasing economic uncertainty, which is causing the rupee to depreciate and has an impact on the cost of production. All these factors are making the economic outlook uncertain”, said the Economic Adviser’s Wing (EAW) of the Ministry of Finance in its Monthly Economic Update and Outlook for July.

It said the high international prices were still adversely affecting external positions even at the start of FY23. There was an intense need for the successful completion of the IMF 7th and 8th reviews of Pakistan’s Exte*nded Fund Facility (EFF). The government has taken all difficult decisions to make reviews successful, reaching a staff-level agreement for a $1.17bn loan tranche, the report said.

However, ongoing political unrest is not only creating governance problems but on the other hand, intensifying the uncertainties depicted by exchange rate depreciation which will, in turn, impact the cost of production. Halting investment decisions is further making the outlook blurry.

The update said the year-on-year inflation remained in double digits since November 2021 and will continue in July and hover around the level observed in June due to the increase in international commodity prices, particularly of energy, and the depreciation of the rupee. CPI Inflation was recorded at 21.3pc in June as against 9.7pc in the same month last year.

In June, the surge in imports of goods owing to an increase in international commodity prices widened the trade deficit. Workers’ remittances were not enough to finance the trade deficit, and as a result, the current account deficit (CAD) widened to $17.4bn last fiscal year. However, it is expected that with the government’s policy measures, imports will fall, while the better performance of exports of goods and services and workers’ remittances will bring the CAD at a manageable level in the coming months.

The EAW said not only international commodity prices, especially oil and food prices, but the depreciation of the exchange rate influenced domestic inflation. It conceded that inflation mostly in the last two months was also coming from supply shocks whose impacts have overshadowed government efforts in maintaining prices.

The higher interest rate followed by monetary contraction was also adversely affecting the perception of the economic outlook. The recent cut in petroleum prices resulted in a decline in weekly SPI. But market expectations and supply side factors are contributing to inflation.

DAWN
 
KARACHI: After Moody’s and Fitch, the S&P Global Ratings on Thursday revised the outlook on Pakistan’s long-term ratings to negative from stable.

The S&P affirmed its ‘B-’ long-term and ‘B’ short-term sovereign credit ratings on Pakistan, as well as ‘B-’ long-term issue rating on the country’s senior unsecured notes and Sukuk Trust Certificates.

“Pakistan’s external position weakens against a backdrop of higher commodity prices, tighter global financial conditions, and a weakening rupee,” said the agency.

The agency said that it could lower its ratings if Pakistan’s external indicators continued to deteriorate, but the outlook could be revi*sed to stable if its external position stabilises and improves.
 
The total foreign debt owed by Pakistan is $126billion as of May 31, 2022, according to the details presented in the National Assembly on Thursday.

In the NA session, a document on details of foreign debts was presented, according to which the government s foreign debt reached $85.64bn.

According to the details, Pakistan s debt to the International Monetary Fund (IMF) is $7.29bn.

According to the written answer, the foreign debt of the private sector is $11.58bn.

From 2022 to 2059, Pakistan will have to pay $95.4bn in interest and principal.

The salary and benefits details of Governor State Bank were presented in the NA, according to which the position of Governor SBP is currently vacant.

While according to former governor Raza Baqir’s salary and benefits details, Governor SBP is paid a monthly salary of Rs2.5m.

The salary is increased by 10 per cent annually and the Governor State Bank is given a fully furnished house.

Apart from this, two vehicles with 1200 liters of petrol and a driver, four domestic servants are also paid
.
State Bank Governor also pays 75 per cent of children s school fees to SBP.

Landline, mobile phone and internet are also provided free of charge to Governor SBP.

SBP also pays electricity, gas, water bills and generator fuel.

According to details of local loans received by the PTI government, local loans of over Rs120bn were received from 2019 to April 2022.

The previous government had issued T-bills worth Rs77bn and Sukuk bonds worth Rs1688bn.

Local loans of Rs340bn were obtained through national savings schemes.

Dunya
 
Pakistan debt is in integration mode reserves dwindling mncs are winding up and investors are quitting
 
Inflation records highest-ever weekly spike

ISLAMABAD: Inflation measured by the Sensitive Price Index (SPI) increased by 3.68 per cent from the previous week mainly due to the highest-ever increase in food prices, according to the Pakistan Bureau of Statistics (PBS) data released on Friday.

The increase in the weekly inflation is the highest since the change of the base year. On June 17, the second highest increase in SPI was recorded at 3.38pc. The SPI recorded a highest-ever year-on-year increase of 37.67pc in the week under review.

The government increased petrol and diesel prices massively which also contributed to an increase in food inflation.

Food prices to rise further as rains damage crops

The recent rains across the country have also caused damage to the standing crops as a result of which vegetables prices are likely to be stayed on the higher side amid short supplies. The massive increase in electricity tariff is another factor that contributed to the price spike.

The government has already announced in the budget that it will revive sales tax on petroleum products as well as impose a petroleum development levy in a phased manner. As a result, the price of diesel is expected to increase for next quarter. This will further increase food prices because of high transportation charges.

The government projected a modest inflationary annual target of 11.5pc for FY23 in the budget documents.

However, the Federal Board of Revenue, which uses inflation as one of the measures to gather extra tax from consumers, has projected inflation at 12.8pc. Independent economists projected that annual inflation would be in the range of 25pc to 30pc.

Soon after coming into power, the new government disbanded the dedicated National Price Monitoring Committee, which was led by the finance minister, while provinces were represented by provincial chief secretaries. The committee meets every Monday to monitor the prices of essential food commodities.

The PBS data shows that the prices of 30 essential food items increased during the week under review compared to the previous week.

The price of tomatoes was up 17.53pc, pulse masoor 4.18pc, pulse mash 2.87pc, pulse gram 2.46pc, pulse moong 2.02pc, vegetable ghee 2.5 Kg 1.80pc, garlic 1.69pc and rice basmati broken 1.21pc. In the non-food items, the price of electricity was up 26.11pc, LPG 7.02pc, washing soap 2.34pc and energy saver 1.03pc.

The SPI increased by 3.27pc for the lowest income group (i.e., people earning below Rs17,732 per month) and by 3.54pc for the group with a monthly income of above Rs44,175.

The year on year increase in diesel was 101.53pc, pulse masoor 99.14pc, petrol 94.15pc, chicken 75.65pc, cooking oil 5 litre 74.81pc, vegetable ghee 1 Kg 72.90pc, mustard oil 72.45pc, vegetable ghee 2.5 Kg 70.51pc, onions 64.18pc, washing soap 62.46pc, pulse gram 55.28pc, electricity 52.61pc, gents sponge chappal 52.21pc, garlic 45.18pc and pulse mash 38.35pc.

DAWN
 
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Economically the country clutching on straws how are they gonna pay the salaries getting difficult what rupee losing its value sharply
 
Awami Muslim League (AML) chief and Pakistan Tehreek-e-Insaf (PTI) ally Sheikh Rashid Ahmed on Sunday strongly criticised the federal government for its failure in dealing with the economic woes of the country.

In a tweet the former interior minister said that “even China, Dubai, Qatar and Saudi Arabia did not come to [country’s] aid, nor did the IMF’s bailout package arrive”.

He also maintained that the decision to table the no-confidence motion that led to former premier and PTI chief Imran Khan's ouster was taken in London.

"Economically, the country is stuck," he added.

The tough conditions set by the International Monetary Fund (IMF) for the revival of the $6 billion bailout package –in particular, the withdrawal of various government subsidies have left the country at a breaking point.

As the rupee continued its record-breaking nosedive, the National Assembly was told on Friday that the government was hopeful that the pressure on the rupee would ease ahead of inflows from the IMF, reckoning that the dollar would fall likely to a level of Rs190 to 210.

Sheikh Rashid has however raised serious questions about the elusive package. He also claimed that “China has serious reservations over the conditions set for [acquisition of] the US aid”.

Raising alarm, the former minister said “only 45 days' worth of foreign reserves is remaining”.

Pointing to a possible point of disagreement between the coalition government, Rashid also said that “Maulana Fazlur Rehman and the TTP [Tehreek-e-Taliban Pakistan] have the same stance on the FATA merger”.

Earlier this week, as economic turmoil and depreciating rupee had sent inflation skyward, Chief of the Army Staff (COAS) General Qamar Javed Bajwa had swung into action, reaching out to Washington to push the IMF to immediately release nearly $1.2 billion Pakistan needs to stave off serious upheaval.

The army chief’s ‘appeals’ to the United States had been in tandem with his discussions with Prime Minister Shehbaz Sharif over measures for the restoration of confidence in the economy.

Meanwhile, the civilian leadership had also separately contacted the US’ top diplomat in Islamabad, seeking his help to unlock another $1.4 billion funds from the World Bank and the Asian Infrastructure Investment Bank (AIIB), a top government functionary confirmed to The Express Tribune.

The developments had reflected the government’s efforts to prevent the economy from tumbling into a profound economic and financial crisis as the clock is ticking on the government to find a way out of the economic crisis that has badly shaken the markets.

Meanwhile, ousted premier Imran Khan had criticised the move saying that it was not the army chief’s job to approach the United States over the Fund deal.

“If these reports are correct that [Chief of Army Staff] General Bajwa is seeking America’s help in getting IMF [loan] it means that the country is getting weaker,” he had said in an interview with a local TV channel on Friday.

Express Tribune
 
But [MENTION=135038]Major[/MENTION] and [MENTION=131701]Mamoon[/MENTION] said Shebaz "A D M I N I S T R A T O R" were going to fix things ?

The PPP and PMLN have had 3/4 decades of experience in screwing things up. I thought they would have tried to do things properly this time
 
Lunger/Meal House Shelter Homes Health card reinstated in Punjab
Over BPS-17 Fuel allocation taken away, on a mission for the betterment of masses
 
The government has decided to impose additional taxes to the tune of Rs30 billion as it struggles to arrange Rs100bn emergency funding to avoid international default on oil and gas payments and keep the staff-level agreement with the International Monetary Fund (IMF) intact.

The decision was taken at a special meeting of the Economic Coordination Committee (ECC) of the cabinet presided over by Finance Minister Miftah Ismail on Sunday.

The meeting was informed that the budgetary commitment with the IMF for Rs153bn primary budget surplus could not be met without additional taxation.

The ECC also decided to examine reducing the price adjustments on a weekly or 10-day basis from existing fortnightly pricing to minimise price uncertainties.

Decision taken for smooth continuity of oil and gas national supply chain

The ECC “directed Finance Division and Federal Board of Revenue to submit proposal for generation of Rs30 billion through taxes within a week”, said an announcement after the meeting.

It also approved a supplementary budget grant of Rs30bn for immediate payment to state-run Pakistan State Oil (PSO) facing international payment obligations of about Rs270bn till August 28.

“For the smooth continuity of oil and gas national supply chain and avoid PSO from being default on international payments, the ECC decided to clear the outstanding payments accumulated during the period of pervious government,” the announcement said. It also directed the Power Division to make immediate payments of the current outstanding amount of Rs20bn within 24 hours and another Rs12.8bn by August 4 (Thursday).

Sources in the Petroleum Division said PSO’s receivables had touched Rs608bn on July 28, including Rs340bn from Sui Northern Gas Pipelines Limited (SNGPL) alone. A major contributing factor was the LNG supply that added a cash shortfall of Rs213bn since July 1, 2021. SNGPL, on its part, had been constrained by delayed payments by the Central Power Purchasing Agency (CPPA) whose receivables jumped to Rs113bn from Rs43bn since January 1, 2022. CPPA had another Rs182bn direct payables to PSO on account of fuel supplies, including Rs16bn accumulated since July 1, 2022.

The petroleum secretary pleaded that PSO had been raising SOS calls to avoid international default as delay in payments by respective entities had exhausted its liquidity. As a result, the company has not been able to deposit Rs81bn to the government’s local currency (NIDA) account for onward transmission to Kuwait Petroleum Cooperation (KPC) which is contractual obligation.

Moreover, PSO had not been able to deposit Rs16bn to the government against an integrated term finance certificate (ITFC) facility, which has been deferred to avoid PSO’s international contractual obligations.

The meeting was told that there has been a decline of sales of high speed diesel (HSD) and petrol by 28pc and 32pc, respectively, that had an impact of Rs69bn on collections, while about 17.8pc devaluation of rupee against dollar in July had resulted in increased cost of procurement of these products by Rs63bn. It was reported that PSO had foreign exchange loss of about Rs85bn over the years and Rs55bn of it was still outstanding.

The meeting was told that despite these challenges PSO had met its contractual international payments in July, 2022 but “this will not be possible in August” which will result in disruption of the supply chain.

PSO has to make an international payment of Rs267bn in the first fortnight of August 2022. The collections during the first fortnight of August were expected at Rs157bn, leaving a net deficit of Rs100bn.

While the petroleum division made a pitch for total Rs133bn payments, the finance ministry explained that there was “no budgetary allocation in current fiscal year” for this account; therefore financial support has to be arranged through a supplementary grant. Even then, considering fiscal constraints and understanding with the IMF, the supplementary grant so provided will result in outflow beyond the numbers agreed with the IMF.

Therefore, against a demand for Rs54bn, Rs30bn supplementary grant was approved which would be booked as expenditure and then matching taxes would have to be generated to compensate for the revenue loss to “achieve primary balance agreed with the IMF”.

In addition, the government would separately direct the National Bank of Pakistan (NBP) and other banks to extend credit limits to PSO and SNGPL on emergency basis to meet remaining Rs45bn funding.

The ECC also directed Petroleum Division to work out in consultation with OGRA other options of setting up petroleum product prices within a week. The ECC directed Petroleum Division for submission of proposal within a week to regulate the prices of Kerosene Oil and Light Diesel Oil after consultation with relevant stakeholders.

Published in Dawn, August 1st, 2022
 
Country’s exports plummet by $718m in July
It is an alarming development as exports are on a declining path

ISLAMABAD: The country’s stumbling economy suffered yet another blow as exports in July 2022 plummeted by $718 million to $2.182 billion as against $2.9 billion exports in June 2022. In addition, the trade deficit in July 2022 stood at $2.9 billion with imports of $5 billion during the period.

However, the country’s imports also registered $2.8 billion decline on month-to-month basis as the import bill in June hovered around $7.8 billion, as per the data of FBR. On year-to-year basis, the exports in July also registered a modest decline as compared to $2.3 billion exports of June 2021.

Ironically, the government was taking credit of the decline in import bill for the first month of new fiscal year and claimed that it would help improve dollar inflows in the coming days. However, it failed to divulge the whole truth as the import bill declined due to lower than normal import of POL products in July 2022.

The country had sufficient stock of petroleum products because it had imported additional quantity in May and June, which led to an increase in the import bill for the products to $6.2 billion.

Pakistan’s trade deficit had risen sharply to $48 billion at the end of last fiscal year with the import bill climbing to $80 billion. In a bid to curtail the import bill, the government imposed a ban on luxury items.

It is an alarming development as exports are on a declining path, said one top official dealing with the country’s economy. The market sources said exports witnessed a dip mainly because there was a shortage of gas, electricity and imported raw material. Besides, there were restrictions on opening of letter of credits (LCs) amid paucity of dollars in the inter-bank market.

The News PK
 
Kianig89 said:
Lunger/Meal House Shelter Homes Health card reinstated in Punjab
Over BPS-17 Fuel allocation taken away, on a mission for the betterment of masses
Click to expand...

Terrible decisions.

Health card and lungar khana should not be funded by imf money.

Bps 17 workers are underpaid and these are over qualified pol, taking away their benefits is a terrible decision
 
Major said:
Terrible decisions.

Health card and lungar khana should not be funded by imf money.

Bps 17 workers are underpaid and these are over qualified pol, taking away their benefits is a terrible decision
Click to expand...

But billions to bribe opposition MNAs and MPAs should be funded by using IMF funds:facepalm::facepalm::facepalm::facepalm::facepalm:
 
Major said:
Terrible decisions.

Health card and lungar khana should not be funded by imf money.

Bps 17 workers are underpaid and these are over qualified pol, taking away their benefits is a terrible decision
Click to expand...

and i forgot the 4 week Foreign trips of a symbolic Foreign Minister should be funded from IMF funds. A guy with title but no job( Bajwa says hi) and before i also forget millions on swimming pools is halal but not feeding treating the poor.
 
Inflation for the month of July, as measured by the Consumer Price Index (CPI), has clocked in at 24.93 per cent, the highest year-on-year rise since November 2008.

According to data shared by the Pakistan Bureau of Statistics (PBS) on Monday, CPI inflation increased by 4.35pc compared to June.

Last month, the YoY inflation was measured at 21.3pc, which was the highest figure in over 13 years.

According to the PBS data, inflation was measured at 23.6pc in urban areas and 26.93pc in rural areas.

The inflationary trend was driven by the transport sector, which saw prices increase by 64.73pc year-on-year, followed by perishable food items at 32.93pc and non-perishable food items at 28.12pc.

Other than education and communication, which saw inflation at 9.79pc and 4.09pc, respectively, all other sectors saw double-digit increases.

These sectors are:

Restaurants and hotels: 24.97pc
Alcoholic beverages and tobacco: 22.48pc
Housing and utilities: 21.78pc
Furnishing and household equipment maintenance: 19.69pc
Miscellaneous goods and services: 17.14pc
Recreation and culture: 15.41pc
Clothing and footwear: 14.57pc
Health: 11.22pc

According to the PBS press release, the prices of motor fuels rose as high as 99pc year-on-year, followed by electricity at 86pc and liquefied hydrocarbons by up to 51pc.

Among the food items that saw the highest price increases compared to last year were pulses, onions, ghee and cooking oil.

Earlier this week, the Ministry of Finance said in its Monthly Economic Update and Outlook for July that the year-on-year inflation, which has remained in double digits since Nov 2021, would continue in July and hover around the level observed in June (21.3pc) due to the increase in international commodity prices, particularly of energy, and the depreciation of the rupee.

The outlook said not only international commodity prices, especially oil and food prices, but the depreciation of the exchange rate influenced domestic inflation. It conceded that inflation mostly in the last two months was also coming from supply shocks, the impact of which has overshadowed government efforts in maintaining prices.

It warned that prevailing political unrest was causing governance problems and intensifying the market uncertainties already caused by low foreign exchange reserves and external pressures.

“Inflationary and external sector risks are building macroeconomic imbalances in the economy. Furthermore, the ongoing political unrest is increasing economic uncertainty, which is causing the rupee to depreciate and has an impact on the cost of production. All these factors are making the economic outlook uncertain.”

DAWN
 
Major said:
Terrible decisions.

Health card and lungar khana should not be funded by imf money.

Bps 17 workers are underpaid and these are over qualified pol, taking away their benefits is a terrible decision
Click to expand...

How are you dealing with inflation and rapid increase of food prices?
 
ISLAMABAD: The country’s exports of merchandise entered a negative growth in July after 22 months when the economy recovered from the impact of Covid-19.

The export proceeds fell 5.17 per cent to $2.21 billion in the first month of the current fiscal year from $2.34bn in the corresponding month last year, data from the Pakistan Bureau of Statistics showed on Tuesday.

On a month-on-month basis, the export proceeds tumbled by 23.95pc indicating a downward trend in the export sector. Last time, the exports posted a negative growth of 14.75pc in August 2020.

In FY22, for the first time, not only the export target was achieved but it exceeded the psychological barrier of $30bn. Pakistan’s exports remained below this level for the last decade.

Import bill dips 38pc month-on-month

Pakistan’s exports increased 26.6pc to $31.845bn in the just-ended fiscal year, up from $25.160bn a year ago. Exports grew 6.48pc to $2.89bn in June, up from $2.72bn in the previous year.

The textile sector has already complained about the rising cost of energy and raw materials mainly due to massive rupee depreciation. Moreover, exporters have also complained about refunds that stuck with the Federal Board of Revenue.

Import bill shrinks

The import bill also dropped by 12.81pc to $4.86bn in July from $5.57bn over the corresponding month of last year. On a month-on-month basis, the import bill dipped by 38.31pc.

In June alone, the import bill edged up to $7.74bn from $6.28bn over the same month last year, reflecting an increase of 23.26pc. The decline in July will reduce pressure on the rupee-dollar exchange rate.

The import bill increased 43.45pc to $80.51bn during 2021-22, up from $56.12bn a year ago.

Taking to Twitter Finance Minister Miftah Ismail said “Our efforts to reduce imports have finally borne fruit. Imports in July, per PBS data, were only $4.86b compared to $7.7b in June. Given that we have pulled Pakistan back from the brink of default, he further claimed.

“Our government is determined to minimise the large current account deficit left by PTI”, the minister further remarked.

The government imposed a ban on the import of nearly 800 luxury and non-essential goods on May 19. Last week the government announced the withdrawal of the ban on all items except automobiles and mobile phones.

According to the Pakistan Economic Survey 2021-22, the jump in imports is recorded in all the major groups. Multiple factors have contributed to the steep rise in imports during the period under review. Rising global commodity prices contributed significantly to the increasing import volume.

Disaggregated data on imports indicates that the energy group is the largest source of the increase in imports, contributing to a one-third of the year-on-year increase in imports during the period.

Similarly, price-led pressures were also noted across non-energy commodities imported by Pakistan, such as edible oil (palm and soya bean), sugar, tea, fertiliser and steel. At the same time, the domestic demand for imported raw materials — such as cotton, steel and capital goods — was also elevated in the wake of the policy-induced economic rebound.

Pakistan’s trade deficit declined by 18.33pc to $2.64bn in July from $3.23bn over the corresponding month of last year. The month-on-month decline in trade deficit was recorded at 46.76pc.

In FY22, the trade deficit reached an all-time high of $48.66bn from $30.96bn a year ago, indicating an increase of 57pc on the back of higher-than-expected imports.

Published in Dawn, August 3rd, 2022
 
The benchmark KSE-100 index gained over 500 points during intraday trading on Wednesday as analysts said clarity regarding the International Monetary Fund (IMF) deal had led to fresh buying.

According to the Pakistan Stock Exchange (PSX) website, the benchmark index gained 527.91 points, or 1.31 per cent, by 11:48am to reach 40,719.52 points.

Topline Securities CEO Mohammad Sohail said investors were buying again because of falling crude oil prices in the international market and the expectation of the Fund releasing the loan tranche soon.

“Investors expect the rupee to strengthen due to lower imports and reduced trade deficit … large punters and financial institutions are active in the market.”
 
A sudden bust in $$ and oil prices creates a havoc of inflation where speculators make money and then there is small dip which is meaningless (like $$ Rs.13 down ) because its a norm in Pakistan once the price of a commodity or item is increased it won't decrease no matter what happens
 
Pakistan’s foreign exchange reserves dropped by $206 million to $14.208 billion as of July 29, the central bank data showed on Thursday.

The State Bank of Pakistan’s forex reserves fell by $190 million to $8.385 billion. The reserves of commercial banks declined to $5.823 billion from $5.839 billion in the previous week. The decrease in the SBP’s reserves is due to external debt and other payments, it said in a statement.
 
Finance Minister Miftah Ismail said on Friday that the government would control imports for the next three months, even if it came at the cost of slower growth.

“I will not allow imports to increase for three months and, in the meantime, we will come up with a policy. I understand that growth will be reduced for a bit but I have no other choice,” he said while addressing a ceremony at the Pakistan Stock Exchange (PSX).

Talking about the exchange rate, Ismail noted that dollar outflows had been surpassing inflows, which is why the rupee had fallen sharply against the greenback over the last month.

“Even a small shopkeeper knows that if your sale is Rs30,000 a day and you buy stock worth Rs80,000, then you need to reduce the stock you buy. We did the same. We reduced imports to $4.9 billion from $7bn and all problems ended.”

The finance minister noted that the government’s import restrictions would affect the automobile and electronic appliances industries. He said he did not want to create unemployment, however, his first priority was the reduction of imports.

“When there was pressure, we imported a lot of oil and gas. At this time, we have [stock of] 30 days for diesel and petrol. We have furnace oil [supply] for six months. We are very comfortable in terms of our energy security and energy supply, and other obligations. We will control imports for the next four months.”

The minister pointed out that the country’s import bill in June was $7.7bn and if the current account deficit widened to such an extent, it would create pressure on the rupee.

Pakistan’s import bill for the previous fiscal year stood at $80bn while its exports amounted to $31bn. “No country can grow and be stable with this kind of current account deficit.”

He said that while it was a good thing for developing countries to run a small deficit, Pakistan had failed to productively use its long periods of deficit.

The PML-N government, during its previous tenure, had set up power plants generating 11,500MW of energy but doubling electricity generation had not led to a doubling in the industrial and export sectors, he rued.

“Other countries like China set up factories after setting up power plants. We only built wedding halls and we did not [earn] foreign exchange.”

IMF talks

Ismail said the country had been close to default when the PML-N-led government came into power which is why he approached the International Monetary Fund (IMF) days after becoming the finance minister.

“We did not have any other option,” he insisted. The country had $10bn in reserves back then while it had to pay back $21bn in the next year. “This is not even debt servicing, just debt repayment.

“So the IMF had to come, it will come. Then the World Bank will come; then ADB (Asian Development Bank); then a Chinese bank, Asian Infrastructure Bank, has also said that it will give money if the World Bank does. Even friendly countries were politely encouraging us to get money from the IMF because no one wants to back a sinking venture.”

The government had to take some “very difficult decisions” as a result, Ismail said. “We raised petrol prices and inflation increased but if the dollar payments are greater than income, how far can we intervene? There are IMF restrictions against intervention. The first thing is to remain solvent and save ourselves from default.”

DAWN
 
The United Arab Emirates intends to invest $1 billion in Pakistani companies across various sectors, state news agency (WAM) reported citing an official source in Abu Dhabi.

The UAE is keen to continue cooperation with Pakistan "in various fields, which include gas, energy infrastructure, renewable energy, health care," the agency added.
 
So from Regime Change to economic destruction to back as US' colony PDM's plight in one line
 
 
Cover Drive Six said:
<blockquote class="twitter-tweet"><p lang="en" dir="ltr"><a href="https://twitter.com/hashtag/Pakistan?src=hash&ref_src=twsrc%5Etfw">#Pakistan</a>'s Lahore Safari Zoo is auctioning off a dozen <a href="https://twitter.com/hashtag/lions?src=hash&ref_src=twsrc%5Etfw">#lions</a> to private collectors next week to free up space and reduce the expenses to feed them <a href="https://t.co/8Izsyqc1Ac">https://t.co/8Izsyqc1Ac</a></p>— Arab News Pakistan (@arabnewspk) <a href="https://twitter.com/arabnewspk/status/1556022306828271617?ref_src=twsrc%5Etfw">August 6, 2022</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
Click to expand...

Oh no, we're doomed.

I get criticizing PDM's idiotic economic policies but this is just grasping at straws.
 
Economically doomed and sovereignty also compromised PDM tenure should be the hot topic for case studies and research in Political schools of top versities
 
Pakistan’s exports to nine regional countries rose 16.97 per cent while imports grew by nearly 28.84pc in FY22 from a year ago, the latest data released by the State Bank of Pakistan showed.

The country’s exports to Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan and the Maldives account for a small amount of $4.590 billion — just 14.43pc of Pakistan’s total global exports of $31.79bn in FY22.

China tops the list of Pakistan’s regional exports leaving other populous countries India and Bangladesh behind. Islamabad carried out trade with its farther neighbours Nepal, Sri Lanka, Bhutan, Bangladesh and the Maldives via sea only.

On the other hand, imports from these countries edged up to $17.814bn in FY22 against $13.826bn over the corresponding period last year, an increase of 28.84pc.

DAWN
 
PSX rises over 550 points in early trade on expected UAE investment, IMF tranche

The Pakistan Stock Exchange (PSX) continued its positive momentum on Wednesday, gaining over 550 points in early morning trade.

According to the PSX website, the benchmark KSE-100 index had gained 554.29 points, or 1.32 per cent, by 10:18am to reach 42,650.53 points.

Head of Research at Intermarket Securities, Raza Jafri, attributed the stock market’s rise to expected investment from the United Arab Emirates and the country moving closer to the resumption of the International Monetary Fund (IMF) programme.

Jafri said the economy was stabilising as Pakistan moves closer to the IMF programme’s resumption. “This is turning attention to corporate profits and the cheap valuations on offer.

“[The] expected investment from UAE is also generating investor interest, particularly in energy stocks,” Jafri said.

Last week, the UAE’s state news agency WAM had reported that the kingdom intended to invest $1 billion in Pakistani companies across various sectors.

The UAE is keen to continue cooperation with Pakistan “in various fields, which include gas, energy infrastructure, renewable energy, health care,” the agency added.

Meanwhile, Salman Naqvi, head of research at Aba Ali Habib Securities, said the market was reacting positively to a number of factors, including the IMF’s assurance, the UAE investment and the dollar’s depreciation.

“The market has been strengthening during the last few sessions because the IMF has assured that Pakistan will receive the tranches and the import bill has been reduced to a big extent due to which the trade deficit and the current account deficit have decreased.

“Besides this, the yield of Pakistan Investment Bonds has strengthened. It makes it clear that Pakistan has exited the default category,” he said.

Naqvi noted that the dollar had fallen by seven per cent in the interbank market since July 29 and it might depreciate further once the IMF tranches and $4bn inflows from friendly countries were received.

“Its impact will have a very positive impact on our economy,” he added.

DAWN
 
Owing to increasing current account and trade deficits, higher external debt payments, Pakistan’s foreign exchange reserves dropped to their lowest level since October 2019, the State Bank of Pakistan data showed Thursday.

Sharing a break-up of the foreign reserves position, the central bank said that the reserves held by the State Bank of Pakistan stand at $ $7.83 billion.

“During the week ended on 05-Aug-2022, SBP’s reserves decreased by US$ 555 million to US$ 7,830.3 million due to external debt payments,” the central bank said in a statement.

According to the central bank, the overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $13.56 billion. Net reserves held by banks amounted to $$5.73 billion.

It is worth mentioning here that the International Monetary Fund (IMF) had confirmed that Pakistan has achieved all the set targets for the revival of Extended Fund Facility (EFF) programme.

Exclusively talking to ARY News, International Monetary Fund’s (IMF) resident representative in Islamabad, Esther Perez Ruiz had said Pakistan has achieved all the financial targets set by the fund and the last action was accomplished on July 31 by extending levy on petrol.

Ruiz said the 7th and 8th reviews have been completed and the IMF Executive Board will meet in the third week of August.
 
From commodities to raw materials to assets everything increased rapidly in terms of price and then the colonial masters agreed to be lenders again so the dollar slumped to 210 from 241 and guess what will the prices also go back definitely not, all in all its the masses who are at loss
PDM 1-0 Public
 
ISLAMABAD: The structure of economy has drastically changed since Pakistan’s inception in 1947 with industry and then services sectors dominated the economy, says a finance ministry report released on Saturday.

The report gives a glimpse of the country’s 75-year economic journey, with all major economic indicators seeing massive changes over the period.

At the time of the independence in 1947, Pakistan inherited only 34 industrial units out of the 921 in undivided India.

The nominal GDP rose from $3 billion in 1950 to $383bn in 2022, while GDP growth was recorded at 5.97pc in 2022 compared to 1.8pc in 1950. Per capita income jumped from $86 in 1950 to $1,798 in 2022.

The tax revenues rose from Rs0.31bn to Rs6,126.1bn from 1950-2022, while agriculture accounted for 59.9pc of the total GDP in 1949-50.

In the agriculture sector, the production of wheat increased from 3.35 million tonnes in 1958 to 29.4m tonnes in 2022, rice from 0.69m tonnes to 9.32m tonnes, maize from 0.36m tonnes to 10.64m tonnes, sugarcane from 5.53m tonnes to 88.65m tonnes, cotton from 1.16m bales to 8.33m bales and water availability from 63.9 million acre-feet to 131 MAF.

On the external side, remittances sent by Pakistanis working abroad jumped from $0.14bn in FY73 to $31.2bn in FY22, exports from $162m in FY50 to $31.8bn in FY22, and imports from $276m in FY50 to $80.2bn in FY22.

Finance Minister Miftah Ismail said the dearth of resources to meet the local needs after independence was not a secret as India refused to give due share of its wealth to Pakistan soon after its birth.

The severely disrupted country’s economic system along with settlement of the refugees were major challenges faced by the newly born country, he said but added that Pakistan’s economy quickly revitalised with the hard work and determination of its people.

He said a country with 30 million population in 1947 could not feed its population and had to import most of its food requirements from abroad, adding that local agriculture production has risen significantly today.

Mr Ismail said Pakistan constructed both large and small dams like Tarbela and Mangla, which increased the water storage and availability to 131 MAF in 2022 from 63.9 MAF in 1965-66, adding that it helped in achieving sustain agriculture sector growth.

He said Pakistan emerged as one of the leading exporters of textiles, pharmaceutical goods and food-related items and economic policies of the successive governments have promoted industry, agriculture and services sectors.

The perseverance of its people made Pakistan the world’s 24th largest economy in terms of purchasing power parity and 44th in terms of nominal GDP, the finance minister said.

Federal Secretary Ministry of Finance Hamed Yaqoob Sheikh said the 75 years journey of Pakistan was a story of economic, political, social and regional events that has shaped the country that we live today.

He said several boom-bust cycles, political crises and geo-strategic challenges have guided the country’s policies and programmes.

He said Pakistan was ranked among 50 leading economies of the world with GDP amounting $383bn, adding that it also established its vibrant banking system that supported economic development over the years.

Published in Dawn, August 14th, 2022
 
PSX rises more than 450 points as IMF tranche inches closer

The Pakistan Stock Exchange (PSX) continued its positive momentum on Monday, rising by more than 450 points shortly after trading opened.

According to the PSX website, the benchmark KSE-100 index gained 473.67 points, or 1.11 per cent, by 10:01am to reach 43,331.24 points.

Head of Research at Intermarket Securities, Raza Jafri, said the index opened on a strong note because of positive developments over the weekend including the letter of intent (LOI) from the International Monetary Fund (IMF) and assurance of further support from Saudi Arabia.

“The market is still quite cheap on valuations,” he added.

Ahsan Mehanti of Arif Habib Corporation attributed the bullish trend to the rupee’s strong recovery and reports of renewal and a further addition to a package from Saudi Arabia.

He also attributed it to the finance minister’s announcement of a $1 billion investment from the United Arab Emirates in the PSX as well as the IMF’s letter of intent.

LOI received from IMF
Finance Minister Miftah Ismail had told Dawn that an LOI had been received early on Friday from the IMF for the revival of the programme under the staff level agreement (SLA) and memorandum of economic and fiscal policies (MEFP) signed last month.

“We are going through the LOI, would sign and send [it] back to the IMF anytime soon and look forward to (executive) board meeting later this month for approval,” he said.

The IMF has convened a meeting of its executive board on August 29 to approve a bailout package for Pakistan, including disbursement of about $1.18bn, before the close of the current month.

The move follows the completion of the $4bn in bilateral financing from four friendly nations and would pave the way for immediate disbursement, expected to be in Pakistan’s account before the end of working hours on August 31.

Sources said the board meeting was convened after Saudi Arabia, the United Arab Emirates, Qatar and China confirmed to the IMF that they had completed arrangements for $4bn in bilateral financing to Pakistan, which was the last hitch to the bailout package after completion of all the prior actions agreed under the SLA. The IMF board’s clearance was expected to reverse continuously depleting foreign exchange reser*ves, strengthen the Pakistani rupee and support balance of payments.

DAWN
 
Inflation measured by the Sensitive Price Index (SPI) rose sharply in the week that ended on August 18, climbing to a record 42.3 per cent year-on-year, data released by the Pakistan Bureau of Statistics (PBS) showed on Friday.

Before this, the highest ever year-on-year increase in the SPI was 38.63pc, recorded for the week ending on August 5.

Latest data shows that the SPI rose by 3.35pc over last week, mainly because of higher food prices. The highest week-on-week increase in inflation was recorded at 3.68pc for the week that ended on July 28.

The SPI monitors prices of 51 essential items based on a survey of 50 markets in 17 cities of the country.

During the week under review, the prices of 25 out of 51 items increased, 11 decreased and 15 remained stable.

Highest week-on-week increase
Tomatoes: 20.28pc
Chicken: 7.57pc
Onions: 2.30pc
Powdered milk 2.03pc
Electricity (for the lowest income group): 6.83pc

Highest week-on-week decrease
LPG: 3.46pc
Vegetable ghee: 1.16pc
Garlic: 0.94pc
Mustard oil: 0.71pc
Pulse masoor: 0.42pc

Highest year-on-year increase
Pulse masoor: 111.02pc
Diesel: 108.77pc
Petrol: 94.53pc
Onions: 94.43pc
Cooking oil 72.96pc

The SPI increased week-on-week by 1.80pc for the lowest income group (i.e., people earning below Rs17,732 per month) and by 3.94pc for the group with a monthly income of above Rs44,175.

DAWN
 
The government has revised upward the last fiscal year’s federal budget deficit to over Rs5.6 trillion – an alarming 51% rise over the preceding year – after nearly Rs200 billion statistical discrepancy surfaced in the accounts.

The discrepancy surprised the finance ministry which, just a week ago, had estimated Rs5.5 trillion budget deficit.

The Rs5.61 trillion gap between the federal income and expenditures was the highest ever in the country’s history.

The ministry released the fiscal operations summary on Friday, showing that the federal budget deficit rose to Rs5.61 trillion – 8.4% of gross domestic product (GDP) – in fiscal year 2021-22 that ended on June 30, against a target of just under Rs4.4 trillion.

The deficit is Rs1.9 trillion or 51% higher than the figures in the fiscal year 2020-21 – the third year of the Pakistan Tehreek-e-Insaf (PTI) government. The PTI remained in power until the first week of April, covering most of the previous fiscal year.

After taking office, PML-N’s Finance Minister Miftah Ismail had said that the budget deficit might increase to Rs5.6 trillion due to huge pending liabilities left behind by the previous government.

The fiscal operations summary showed that there was Rs197.4 billion worth of discrepancy in the accounts of the federal government, which is unusually large as compared with the government’s own loose standards.

The discrepancy stemmed from the financing side of the budget and it was expected to be reconciled once the final accounts were printed by November, said a senior Finance Ministry official responsible for the Budget Wing.

The fiscal discrepancies have remained a matter of concern but no serious efforts have been made in improving the accounting standards, which may cause serious irregularities leading to wastage of public funds.

If the discrepancy remains unsettled, the auditor general of Pakistan and the controller general of accounts may frame objections to be presented before the Public Accounts Committee (PAC).

A major reason behind the record budget deficit is subsidies worth Rs1.53 trillion which were given in the previous fiscal year – higher by Rs1.1 trillion or 260%.

The PTI government gave fuel subsidies that drained the government’s resources and also caused disruption in the International Monetary Fund (IMF) loan programme. More than Rs1 trillion were paid in the subsidies in the last quarter of the fiscal year, as the previous government had not cleared the subsidy accounts, leaving the mess behind for the new government.

The then former finance minister, Shaukat Tarin, had claimed that former prime minister Imran Khan’s fuel and electricity subsidy package would be funded from the dividends income of the state-owned companies. However, the fiscal accounts showed that the dividends income hardly amounted to Rs42.8 billion in the previous fiscal year – even less than the amount reported in the fiscal year 2020-21.

The fiscal operations summary confirmed the widely-held view that the decision to announce fuel and electricity subsidies just days before the ouster of Imran Khan’s government, was irrational and not backed by any resources.

The federal budget deficit equalled to 8.4% of GDP, on the basis of the new size of the economy, which was estimated at Rs67 trillion. However, on the basis of old GDP that had also been used to set budget targets in June last year, the deficit was equalled to 10.4% of GDP. The previous government had updated the methodology and changed the base year, which was in line with international best practices.

The disappointing results have turned the current fiscal year 2022-23 budget largely irrelevant within two months of its approval by the National Assembly. The results have also put a question mark over the government’s ability to deliver on the promises made to the IMF.

During the last fiscal year, the federal government’s total expenditures shot up to Rs9.4 trillion, exceeding the budget target by Rs930 billion, or nearly 9%. This also makes the Rs9.58 trillion expenditure target for the current fiscal year unrealistic. This year’s expenditure allocation is only 3% higher than the previous fiscal year, despite 25% inflation in the country.

The Current expenditures increased to Rs8.5 trillion in the last fiscal year, breaching the budget target by Rs1 trillion. This will also have implications for current year’s current expenditure target of Rs8.7 trillion, largely due to a higher interest payment cost.

In the last fiscal year, the country made Rs3.2 trillion in interest payments – Rs120 billion more than the budget target. Defence spending stood at Rs1.41 trillion, also more than the annual allocation.

The spending on interest payments consumed 85% of the net federal government revenues of Rs3.74 trillion. The Net federal revenues were not even sufficient to fund debt and defence expenditures that stood at Rs4.6 trillion in the last fiscal year. The development spending was Rs558 billion only against a target of Rs900 billion.

Under the IMF programme, Pakistan is committed to gradually converting the primary deficit into a surplus. For this fiscal year, the government is bound to convert the primary deficit – calculated after excluding interest payments – into a surplus of 0.2% of GDP, down from last fiscal year’s 3.6%. The fiscal summary showed that the actual deficit came to Rs2.5 trillion or 3.6% of the GDP against the target of Rs930 billion primary federal budget deficit.

Despite a quite healthy growth in the tax collection by the Federal Board of Revenue (FBR), the gross revenue receipts of the government remained below the target by Rs580 billion. The FBR got Rs6.14 trillion in taxes, surpassing its original target by Rs314 billion.

However, the non-tax revenue slipped below Rs1.2 trillion against the annual target of Rs2.1 trillion. The main reason behind missing the non-tax revenue goal was an unrealistic petroleum levy target of Rs610 billion. As a result, the total gross federal revenue receipts amounted to Rs7.3 trillion, which was Rs580 billion less than the target.

The profits by the State Bank of Pakistan (SBP) shrank by 27% or Rs177 billion in the last fiscal year to Rs474 billion. Similarly, the petroleum levy collection was Rs128 billion –also 70% less than the preceding year.

The federal government’s total net income after transferring provincial shares stood at just Rs3.8 trillion, lower by Rs760 billion from the annual target. The federal government transferred Rs3.6 trillion to provinces as their share in federal taxes, which was slightly better than the budgeted amount due to higher collections by the FBR.

After incorporating the cash surplus of over Rs351 billion achieved by the provincial governments, the overall deficit of the country stood at Rs5.26 trillion, or 7.9% of GDP. The overall primary balance was negative Rs2.1 trillion or 3.1% of the GDP.

The government needs to turn this deficit of Rs2.1 trillion into a surplus of Rs153 billion, requiring fiscal consolidation of Rs2.3 trillion even after incorporating provincial contributions.

Express Tribune
 
As Pakistan continues to reel through political and economic instability, inflation is consistently on the rise with the Sensitive Price Index (SPI) showing an increase of 3.35 per cent in the week that ended on August 18.

Shattering old records, the year-on-year increase went up to 42.31 per cent. The previous highest-ever yearly increase was recorded in the week ending on August 5 at 38.63 per cent.

The Pakistan Bureau of Statistics (PBS) publishes the SPI by taking stock of 51 essential items from 50 markets in 17 cities across Pakistan. The data obtained from these markets is computed on a weekly basis to record price movements.
 
Shares at the Pakistan Stock Exchange opened the week in the red, with investor sentiment sliding after the country’s political temperature rose over the weekend as a terrorism case was registered against PTI Chairman Imran Khan for a speech he delivered on Saturday while rumours of the government’s plan to arrest him have been making rounds since yesterday.

The benchmark KSE-100 index was down 400 points, or 0.92 per cent, at 11am.

Raza Jafri, head of research at Intermarket Securities, said the rise in political temperature over the weekend was weighing down market sentiment.

“Investors are also cautious ahead of the monetary policy, set for later today. Valuations remain cheap but wait-and-see is prevailing particularly as the KSE-100 has already recovered sharply in the first two weeks of August.
 
Govt unveils major tax relief for retailers
New Tax Laws Ordinance also gives Rs2b relief to transporters, Rs1b to Pakistani diplomats

ISLAMABAD:
President Arif Alvi on Monday promulgated a relief-loaded ordinance to appease traders, transporters and the Pakistani diplomats posted abroad but the smokers were taxed to pay for the concessions given to these classes of the society.

President Alvi signed the Tax Laws (Second Amendment) Ordinance, 2022 – a week before the International Monetary Fund (IMF) is set to take Pakistan’s request for completion of the two pending reviews for the release of the $1.2 billion tranche of the loan programme.

After the approval of the budget, the government has taken a hit of Rs75 billion in shape of tax relief or sanctioning additional expenditures. But the gross revenue measures, both on account of regulatory duties on imports (Rs6 billion to Rs14 billion) and duties on cigarettes and reduced rates for traders hardly match the Rs75 billion figure.

The federal cabinet on Monday separately approved the imposition of regulatory duties up to 100% on imports.

Through the presidential ordinance, the government withdrew Rs42 billion taxes imposed on the traders but also introduced measures to recover Rs23 billion from them, resulting in net relief of around Rs19 billion to the retailers.

Similarly, the government gave Rs2 billion relief to the transporters and Rs1 billion to the Pakistani diplomats posted abroad. In addition, it has already approved Rs30 billion supplementary budget for the Pakistan State Oil and Rs650 million for the information ministry.

The ordinance details suggested that the government had not yet learnt a lesson despite the fact that Pakistan was pulled back from brink of default. But, for the time being, it had withheld tax relief for the bankers, stock market brokers and the real estate sector after the IMF put its feet down against these measures.

Under the ordinance, the amendments have been made in Sales Tax Act 1990, Income Tax Ordinance 2001, Federal Excise Act 2005 and Finance Act 2022.GST amendments

Through the ordinance, the government withdrew Rs3,000 to Rs10,000 per month fixed tax imposed on retailers in the budget to collect Rs42 billion taxes. It had now introduced a fixed tax of 5% on retailers where the monthly bill amount did not exceed Rs20,000 and 7.5% where the monthly bill amount exceeded Rs20,000.
A senior government official claimed that thee revised tax rates would fetch Rs23 billion.

The finance minister had promised that he would slap up to 12% sales tax and 20% income tax on the retailers but the ordinance is short of what Miftah Ismail had promised. The retailers had impressed upon PML-N Vice President Maryam Nawaz to force the government to withdraw the fixed tax.

Through the ordinance, the government also exempted the retailers from the payment of double taxes if they fail to file their returns. The ordinance said that provisions of Section 100BA and Rule 1 of the Tenth Schedule would not apply to the retailers.

However, the government got the power under which it could levy a tax in lieu of or in addition to the newly imposed taxes by notification in the official gazette at such rates and from such date as it may deem fit from retailers other than those falling in Tier-1 through their monthly electricity bill.

The government exempted the single cylinder agriculture diesel engines from the levy of sales tax.

The government exempted gas and LNG from levy of sales tax to the extent of the subsidy paid on these sources of energy. It has amended the definition and included the word “natural gas including re-gasified liquefied natural gas”.

Express Tribune
 
Prime Minister Shehbaz Sharif has announced scarping of fixed tax imposed on traders in the budget and also waived fuel adjustment charges (FCA) on electricity bills for millions of consumers.

“The economy was on verge of default... but now due to the efforts of coalition partners we have averted this danger,” announced PM Shehbaz while speaking in Doha on Tuesday where he is on an official two-day visit.

While admitting that imposed fixed tax was a fault, the premier said neither he wanted nor he directed the finance ministry to impose such tax on traders.

“The fixed tax was imposed against our vision... I have formed a committee to fix responsibility for this,” he added.

“[Waiver] will create a gap of Rs42 billion tax revenue but we are not going to take any step that will create difficulties for our small traders,” he said. “Traders should not worry about this tax now. It’s been withdrawn.”

Speaking about inflated electricity bills, PM Shehbaz said fuel adjustment charges – linked to international fuel prices – witnessed an exorbitant rise due to which additional charges were imposed on the electricity bills.

“I took notice of this [inflated electricity bills] and on the instructions of [PML-N supremo] Mian Nawaz Sharif… we have decided to waive additional charges from the electricity bills of 17 million consumers out of a total 30 million,” the premier said.

He also cited hurdles in taking measures related to the economy saying the government has to consult with International Monetary Fund (IMF) before making any decision.

President Arif Alvi on Monday promulgated a relief-loaded ordinance to appease traders, transporters and the Pakistani diplomats posted abroad but smokers were taxed to pay for the concessions given to these classes of the society.

The president signed the Tax Laws (Second Amendment) Ordinance, 2022 – a week before the IMF is set to take Pakistan’s request for completion of the two pending reviews for the release of the $1.2 billion tranche of the loan programme.

After the approval of the budget, the government has taken a hit of Rs75 billion in the shape of tax relief or sanctioning additional expenditures. But the gross revenue measures, both on account of regulatory duties on imports (Rs6 billion to Rs14 billion) and duties on cigarettes and reduced rates for traders hardly match the Rs75 billion figure.

The federal cabinet on Monday separately approved the imposition of regulatory duties up to 100% on imports.

Through the presidential ordinance, the government withdrew Rs42 billion taxes imposed on the traders but also introduced measures to recover Rs23 billion from them, resulting in net relief of around Rs19 billion to the retailers.

https://tribune.com.pk/story/237273...-waive-fuel-adjustment-charges-on-power-bills
 
KARACHI: Almost all foreign currencies have disappeared from the open market, with citizens struggling to get hold of the dollar even at Rs230.

In the interbank market, the rupee continued to fall for the fourth session in a row, losing 0.47 per cent to close at 219.41 on Thursday.

The open market quoted the dollar at about Rs10 higher than the interbank market, currency dealers said, as all foreign currencies were in short supply, including the dollar, Saudi riyal and UAE dirham.

Bankers also questioned the official price of Rs219.41, claiming that the dollar was changing hands at much higher rates among banks.
 
MenInG said:
KARACHI: Almost all foreign currencies have disappeared from the open market, with citizens struggling to get hold of the dollar even at Rs230.

In the interbank market, the rupee continued to fall for the fourth session in a row, losing 0.47 per cent to close at 219.41 on Thursday.

The open market quoted the dollar at about Rs10 higher than the interbank market, currency dealers said, as all foreign currencies were in short supply, including the dollar, Saudi riyal and UAE dirham.

Bankers also questioned the official price of Rs219.41, claiming that the dollar was changing hands at much higher rates among banks.
Click to expand...

Incompetent crooks.
 
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