Pakistan's economic turmoil under Shehbaz Sharif's second term as Prime Minister of Pakistan

Ogra making a summary for recommendation to increase petrol by Rs.80, we know these fools have lost their mind but these kinds of decision will lead to a hasty end, why ñot the down on fuel subsidy offered to Elite and govt officials
 
Business leaders in Karachi give PM food for thought

As Prime Minister Shehbaz Sharif sat down with the business community to find ways to uplift the economy through exports, his resolve was met with apprehensions from industry leaders who said it was “almost impossible” to do business under the current circumstances, particularly with high energy costs and inconsistent government policies.

Posing tough questions during an hour-long meeting at the CM House, Karachi’s business community appreciated the PM’s “determination”, but advised him to focus on bringing about political stability to “turn around” the economy.

Appreciating the newly-installed government for moving forward with the International Monetary Fund (IMF) that brought some consistency to the money market and contained inflation, they suggested PM Shehbaz initiate trade talks with India and “shake hands” with imprisoned PTI founding chairman Imran Khan — apparently for political stability.

PM Shehbaz, who had arrived in the port city on his maiden visit after his election, said the meeting was an attempt to listen to the “brilliant minds of business, absorb what they say and put it into action” for a comprehensive economic growth roadmap.

“You all are great minds of business… Today we need you to take a step forward and bring this rental business to an end. Let’s focus on genuine industrial and agricultural growth and double the exports in the next five years. It’s difficult but not impossible. It’s an article of faith for me. I would listen to you and make a plan to put that into action.”

In a veiled reference to the booming economy of Bangladesh, he recalled ‘East Pakistan’, which was “once considered” a burden on the country, but had made tremendous strides in industrial growth.

“I was quite young when … we were told that it’s a burden on our shoulders… Today you all know where that ‘burden’ has reached [in terms of economic growth]. And we feel ashamed when we look towards them,” said PM Shehbaz.

Trade ties with India

After the PM’s brief speech, the house was opened for a question and answer session, where business leaders voiced their appreciation for the government’s recent moves, but made more demands.

They also shared proposals for economic policies to achieve desired results.

There was a sense of concern among the business leaders over the political instability in the country for which they even advised the PM to take initiative as the head of the government. “You have made a few handshakes after taking the charge that has produced good results and progress on the IMF deal is one of them,” said Arif Habib, the chief of Arif Habib Group – a capital market giant.

“I suggest you do a few more handshakes. One of them is regarding trade with India, which would greatly benefit our economy. Secondly, you should also [patch up] with a resident of Adiala Jail (a reference to jailed PTI leader Imran Khan). Try to fix things at that level as well and I believe that you can do it.”

The PM avoided responding directly to the questions aimed at political stability, but claimed to have noted down his proposals for economic growth and assured him that he would soon invite businessmen from all across the country to Islamabad and sit with them “till all the issues aren’t resolved”.

Then came a presentation from Zubair Motiwala, a prominent industrialist and chief of the Trade Development Authority of Pakistan (TDAP), who heads the Karachi businessmen’s body called Businessmen Group (BMG).

In his presentation, he questioned the government’s ambitious plan amid the existing business regime. “The prime minister is keen to support the industry by doubling exports and reducing business costs but it seems impossible in the current situation,” said a point of his presentation shared by the Karachi Chamber of Commerce and Industry (KCCI).

“Due to the increasing cost of doing business with these gas and electricity prices, our competitors would soon take us over and get Pakistan’s export orders. It is surprising that we want to increase exports and local manufacturing, but we are increasing energy prices by including cross-subsidies, which has resulted in a gas tariff of Rs2,600 per unit for industrial heating and Rs3,100 per unit for captive power.”

‘Fair gas price’

He referred to the gas prices six months ago when they were charged at Rs1,150 and Rs1,350 per unit respectively and asked “if any business can survive with such an increase in the current international market situation”.

“The industry is willing to pay 100 per cent of the gas price without any subsidy. We don’t want any subsidy. We just want the industry to get a fair gas price,” said Mr Motiwala. In his presentation, he pointed out that the “unnecessary capacity” of power plants had put a burden on Pakistan in the form of capacity charges, resulting in a situation where surplus electricity was neither sold nor provided to industries at lower rates.

“This unnecessary capacity is also increasing the circular debt issue in the power sector. Therefore, it is necessary to introduce a scheme to reduce the flat tariff for industrial consumers, which will increase electricity consumption and also help reduce the circular debt issue,” he added.

Earlier, the premier was received by Sindh Governor Kamran Tessori, CM Murad Ali Shah, Sindh ministers and senior officials at Karachi airport. The PM also went to the Quaid-i-Azam’s mausoleum to pay his respects.

SOURCE: DAWN
 
IMF executive board to meet April 29 on $1.1 bln Pakistan disbursement: report

The executive board of the International Monetary Fund (IMF) will meet on April 29 to discuss the approval of $1.1 billion funding for Pakistan, the fund said on Wednesday.

The funding is the second and last tranche of a $3 billion standby arrangement with the IMF, which it secured last summer to avert a sovereign default and which runs out this month.

The South Asian nation is seeking a new long-term, larger IMF loan. Pakistan’s Finance Minister, Muhammad Aurangzeb, has said Islamabad could secure a staff-level agreement on the new program by early July.

Islamabad says it is seeking a loan over at least three years to help macroeconomic stability and execute a long-due and painful structural reforms, though Aurangzeb has declined to detail what seize of programme the country seeks.

Pakistan is yet to make a formal request, but the Fund and the government are already in discussions.

If secured, it would be the 24th IMF bailout for Pakistan.

The $350 billion economy faces a chronic balance of payment crisis, with nearly $24 billion to repay in debt and interest over the next fiscal year – three-time more than its central bank’s foreign currency reserves.

Pakistan’s finance ministry expect the economy to grow by 2.6% in the current fiscal year ending June, while average inflation is projected to stand at 24%, down from 29.2% in fiscal year 2023/2024. Inflation soared to a record high of 38% last May.

 
PM seeks ‘cheap power’ plan for industries

Prime Minister Shehbaz Sharif on Thursday accorded formal approval to reform the National Transmission and Dispatch Company (NTDC) and formed a “special cell” to ensure their implementation.

In a meeting on the reforms in the electricity sector, the premier also directed the authorities to chalk up a comprehensive plan for the provision of power-efficient fans to the needy at affordable prices, according to a statement issued by the PM’s Office.

The meeting was informed in detail about issues and reforms and recommendations were also presented regarding the power distribution companies, their losses, privatisation, and outsourcing.

It was also informed about tariff rationalisation and power tariffs for industries and domestic consumers.

PM Shehbaz also asked the authorities to prepare a comprehensive plan to supply electricity to the industrial sector at a low cost to improve the performance and efficiency of industries. He said that industries should be provided electricity at lower tariffs to ensure economic progress and increase exports.

In a separate event, PM Shehbaz expressed the government’s commitment to empowering the youth with modern knowledge and vocational training to make them a valuable asset for the country.

The prime minister also met a delegation led by APM Terminals CEO Keith Svendsen. During the meeting, Mr Svendsen expressed interest in the first green transhipment terminal of Pakistan in Karachi.

SOURCE: DAWN
 
PM to attend World Economic Forum, Gaza meetings in Riyadh

As top Arab and European diplomats are expected to begin arriving in the Saudi capital this weekend for an economic summit and meetings on Gaza, Prime Minister Shehbaz Sharif is scheduled to participate in a special session on “Global Collaboration, Growth and Energy for Development”.

The special meeting of the World Economic Forum (WEF) on “Global Collaboration, Growth and Energy for Development” in Riyadh is scheduled for April 28 and 29.

The prime minister, accompanied by Foreign Minister Ishaq Dar, would travel to Saudi Arabia at the invitation of Crown Prince Mohammed bin Salman and WEF Founder and Executive Chairman Klaus Schwab, Foreign Office spokesperson Mumtaz Zahra Baloch told the media on Friday.

According to FO spokesperson, the high-level participation in the WEF would provide an opportunity to highlight Pakistan’s priorities in global health architecture, inclusive growth, regional collaboration and balance between growth and energy consumption, besides interacting with the participating world leaders and heads of international organisations.

Also, a Gaza-focused session in Riyadh on Monday is set to feature newly appointed Palestinian PM Mohammed Mustafa, Egyptian PM Mostafa Madbouly and Sigrid Kaag, the United Nations aid coordinator for the Gaza Strip.

Besides the Turkish, Jordanian and Egyptian foreign ministers, French Foreign Minister Stephane Sejourne and German Foreign Minister Annalena Baerbock are among the foreign diplomats travelling to Riyadh during the summit for talks on Gaza.

The prime minister would also attend the 15th session of the Islamic Summit Conference under the slogan Enhancing Unity and Solidarity through Dialogue for Sustainable Development, on May 4 and 5 in Gambia, after Foreign Minister Ishaq Dar’s participation in the preparatory meeting of the Council of Foreign Ministers on May 2-3.

The FO spokesperson said the PM would express Pakistan’s grave concern on genocide in Gaza, advocate for their right to self-determination, the imperative of solidarity, besides deliberating on Islamophobia, terrorism, and the challenges faced by the world, particularly the Muslim world. She added that the prime minister would also hold bilateral meetings with the Muslim world leaders.

SOURCE: DAWN
 
Govt forms committee for revival of Pakistan Steel Mills

According to the official notification, the committee headed by the Federal Secretary of Industry and Production include the Additional Secretary of Industry and Production, Senior Member of the Board of Revenue Sindh, Joint Secretary of Finance, CEO of PIDC, and representatives of the Worker Union of Steel Mills and two independent board members of the steel mills, including the Director Technical and Corporate Secretary.

The committee will review the plan to shut down the steel mills and auction off its plants and machinery.

The committee will also explore options to revive Pakistan steel mills with the cooperation of the private sector.

It is pertinent to mention here that the then-caretaker government removed Pakistan Steel Mills from its privatization list of state-owned entities.

The government issued a new list of state-owned entities (SOEs) that was handed over to the private sector under its privatization program.

Overall, 26 SoE will be privatized under the ongoing government program including four institutions each in the financial and real estate sectors.

In a statement the then Caretaker Minister for Privatisation Fawad Hasan Fawad had said that the Pakistan Steel Mills (PSM) is a dead horse that cannot be privatised.

“The amount of Rs2,542 billion was spent on the state-owned entities from 2018 to 2019, whereas, the financial losses to the institutions in 2020 were equivalent to 7% of GDP. The financial losses of the state-owned entities have further increased now” he added.

 
Farmers’ outcry compels PM Shehbaz to hike wheat target

Prime Minister Shehbaz Sharif has ordered an increase in the wheat procurement target from 1.4 million tonnes to 1.8 million tonnes after protests by farmers over delays in the grain’s buying process.

PM Shehbaz has also directed the Pakistan Agricultural Storage and Services Corporation Limited (Passco) — the national grain procurement and storage agency — to ensure swift buying to help growers.

According to a statement issued by the Prime Minister’s Office (PMO), Mr Sharif gave the directives on Saturday before leaving for Saudi Arabia to participate in the World Economic Forum’s meeting.

The official press release called the decision “a big relief” for farmers, adding that it was taken following complaints from wheat growers.

“The prime minister has taken the initiative keeping in view the problems confronting the growers regarding the sale of wheat,” it said.

Besides increasing the wheat procurement target, the prime minister also directed Passco to ensure transparency and facilitate the growers on a priority basis.

The delay

A bumper crop output has been projected for this season and wheat threshing has already begun in most parts of Punjab, the largest wheat producing province in the county.

However, farmers complained that Passco was not purchasing wheat and flour mills were “exploiting them” by offering rates lower than the government-mandated support price for their crops.

The Sindh and Balochistan governments have set the support price at Rs4,000 per 40kg, while the Khyber Pakhtunkhwa and Punjab governments Rs3,900 per 40kg.

The farmers lament that their production costs have more than doubled in the last one year but they were being forced to sell their produce at the last year’s rates and even lower than that.

The issue also resulted in heated discussions in the National and Punjab Assembly this week.

The National Assembly was told that official procurement has slowed as the caretaker government imported wheat despite having a bumper crop.

National Food Security Minister Rana Tanveer admitted the decision was “wrong”, and the prime minister has already ordered an inquiry into it.

He added that the ministry would write letters to provincial governments to procure maximum wheat from the farmers.

Opposition member Sheikh Waqas Akram warned the government that farmers would be on the streets soon and “the rulers would not be able to face the brunt”.

In the Punjab Assembly, Food Minister Bilal Yasin reasoned that the moisture level in wheat was quite high, up to 18 per cent, because of which his department could not buy the produce as after drying, its weight would reduce, causing a loss to the government.

Punjab Assembly Speaker Malik Muhammad Ahmad Khan also conceded that even though the minimum support price was Rs3,900 per 40kg, the crop was being sold at Rs3,200 in the open market because growers were not sure whether the food department would buy their produce.

Farmers’ protests

The growers have staged protests in several areas and demanded the government increase the support price.

While addressing a press conference earlier this month, the Kisan Board Pakistan president, Sardar Zafar Hussain, urged the government to procure at least five million tonnes of wheat in the current season and raise the support to Rs5,000 per 40kg.

He alleged that the government was “deliberately delaying” the procurement campaign because of which the prices in the open market were declining.

KP govt to buy ‘local’ wheat

In a related development, the provincial food minister, Zahir Shah Toru, announced that the KP government would buy 600,000 tonnes of wheat at the rate of Rs3,900 per 40 kg.

Mr Toru made the announcement on Saturday during a visit to a wheat godown in Nowshera district. The minister was briefed on the wheat procurement process and the measures taken for its safe storage in warehouses.

He said the provincial cabinet has decided to purchase wheat from local farmers at the same rate as the Punjab government.

The decision will not only result in the procurement of quality wheat but yield significant financial benefits to the province’s growers, he said.

Regarding the welfare of KP’s farmers, Mr Toru assured that their interests would be “safeguarded at all costs”.

The minister emphasised his government’s commitment toward transparency, highlighting ongoing efforts to digitise the food department’s administrative affairs to ensure accountability.

He said a five-member committee, comprising officials from the agriculture department, administration and NAB, has been constituted to oversee procurement, transportation and quality control process and prevent malpractice.

SOURCE: DAWN
 

Undocumented economy has been biggest challenge: Aurangzeb​


Speaking at the World Economic Forum special meeting at Riyadh on Sunday, finance minister said that around 10 trillion tax circulating in the market. “We are considering over moving to digital currency,” Aurangzeb further said.

“We have 9.4 trillion annual revenues and half of our economy has been undocumented,” Finance Minister said.

He said that the government providing cash assistance to entitled women as income support. Beneficiary women want to get the cash by digital vault, he added.

IMF Managing Director Kristalina Georgieva speaking at the World Economic Forum special meeting said some countries including Pakistan facing economic hardships.

The IMF chief said some countries are doing well, but others are “falling behind,” without providing further clarification.

IMF chief said that Covid-19 pandemic hit hard to the economies of low-income countries. “The global economic suffered 3.3 trillion dollars loss during the pandemic Kristalina Georgieva said.

 

IDB vows to expedite work on different projects in Pakistan​


The prime minister thanked the IDB for its $1 billion worth of investment in different uplift projects in Pakistan during his previous tenure in office. The president of IDB called on the prime minister on the sidelines of the special meeting of the World Economic Forum (WEF), PM Office Media Wing said in a press release.

The meeting was attended by Minister for Foreign Affairs Ishaq Dar, Minister for Finance and Revenues Muhammad Aurangzeb, Minister for Information and Broadcasting Attaullah Tarar, Minister for Petroleum Dr Musadik Malik, Minister for Commerce Jam Kamal Khan and Minister for Power Awais Ahmed Khan Leghari.

During the meeting, progress on different projects in Pakistan was reviewed and both sides discussed ways to explore further avenues for cooperation. The prime minister also lauded the IDP’s assistance in the rehabilitation of flood-affected people and commended the personal cooperation and leadership role of Dr Al Jasser.

He observed that IDB’s beneficial partnership with Pakistan was not only providing job opportunities and assisting in reconstruction efforts but also supporting the government’s endeavours for the achievement of objectives of sustainable progress.

The prime minister informed that for fast-tracking foreign investment, removing all concerns of foreign investors and provision of one window operation, the Special Investment Facilitation Council (SIFC) was fully functional.

The IDB president said that Pakistan was a founding and the most important member of the Bank. He observed that the country was blessed with abundant natural and water resources and its huge manpower could be fully utilized. Dr Al Jasser also prayed for the progress and prosperity of Pakistan.

 
Many news of investments are coming, but I can't see any improvement yet.
 

PM discusses new loan programme with IMF chief on WEF sidelines​


Prime Minister Shehbaz Sharif on Sunday met Managing Director (MD) of the International Monetary Fund (IMF) Kristalina Georgieva on the sidelines of the World Economic Forum (WEF) special meeting in Riyadh, a statement from the Prime Minister’s Office (PMO) said.

This was the first meeting between the prime minister and the IMF chief since his re-election. They last met in Paris in June 2023 on the margins of the Summit for New Global Financial Pact.

The premier thanked Georgieva for her support to Pakistan in securing the $3 billion Standby Arrangement (SBA) from IMF last year that was now nearing its completion. The IMF executive board is expected to meet tomorrow to decide on the final tranche of USD 1.1 billion under SBA.

The IMF MD appreciated the leadership of PM Shehbaz for timely securing SBA last year.

The prime minister informed the IMF chief that his government was fully committed to put Pakistan’s economy back on track. He had directed his financial team, led by Finance Minister Muhammad Aurangzeb, to carry out structural reforms, ensure strict fiscal discipline and pursue prudent policies that would ensure macro-economic stability and sustained economic growth.

Both sides also discussed Pakistan entering into another IMF programme to ensure that the gains made in the past year are consolidated and its economic growth trajectory remains positive.

IMF MD shared her institution’s perspective on the ongoing programme with Pakistan, including the review process. The premier also extended a cordial invitation to the IMF chief to visit Pakistan at her convenience.

Finance Minister Muhammad Aurangzeb, earlier, said that Islamabad could secure a staff-level agreement on the new program by early July.

Islamabad says it is seeking a loan over at least three years to help achieve macroeconomic stability and execute long-overdue and painful structural reforms, though Aurangzeb has declined to detail what size of the programme the country seeks.

The country was yet to make a formal request, but the fund and the government are already in discussions. If secured, it would be Pakistan's 24th IMF bailout.

Pakistan faces a chronic balance of payments crisis, with nearly $24 billion to repay in debt and interest over the next fiscal year - three-time more than its central bank's foreign currency reserves.

The country's finance ministry expects the economy to grow by 2.6% in the fiscal year ending in June, while average inflation for the year is projected to stand at 24%, down from 29.2% the previous fiscal year.

PM calls upon bridging gap in health sector

Earlier in the day, PM Shehbaz called for bridging the widening gap between the Global South and the Global North while expressing his views during a session of the WEF on global health.

The prime minister stated that the Covid-19 pandemic had exposed significant gaps between the Global North and Global South regarding health facilities provision and vaccine distribution.

He highlighted that the issue of climate change had also fundamentally altered the landscape. Pakistan, he asserted, bore no responsibility for global emissions; however, in 2022, it experienced severe climate-induced floods, causing extensive damage to infrastructure and buildings. Consequently, he added, the country had to allocate billions of rupees to rehabilitate the affected people.

PM Shehbaz questioned whether a developing country like Pakistan could afford such costly loans and stressed that resources were required for providing health facilities.

Sharing his personal experiences, the premier said that treatment for fatal diseases like cancer was too costly for the poor population of Pakistan.

He said that as a chief minister of Punjab, he had provided about 130 million inhabitants of the province with the best medical treatment initiatives like screening and treatment facilities for Hepatitis in the remotest and backward areas of the province where the poor people had been in dire need of basic facilities like education and health.

Meeting with IDB president

During his meeting with the president of the Islamic Development Bank (IDB) earlier in the day, the premier was assured that the bank would complete its pending development projects in Pakistan at the earliest.

The meeting also reviewed progress on ongoing projects and deliberated upon opportunities for future cooperation between Pakistan and the IDB.

PM Shehbaz thanked the bank for its investments in Pakistan and appreciated its assistance in rehabilitation after the 2022 floods.

He said the IDB’s fruitful partnership with Pakistan is instrumental in helping to achieve the government's sustainable development goals along with providing support for reconstruction and employment.

The premier highlighted that the SIFC is fully functional to channel foreign investment in the country, addressing all concerns of foreign investors and providing a one-window operation.

The IDB president said Pakistan is an important member of the bank and is blessed with rich natural and water resources. He stated that Pakistan's large manpower is an asset to be utilized optimally.

 
PM Shehbaz secures more investment assurances from Riyadh

Over a hectic working weekend, Prime Minister Shehbaz Sharif on Sunday secured assurances on investment from Saudi Arabia and won plaudits from his hosts, who dubbed him ‘a man of action’.

The premier, who was in Riyadh to attend a special meeting of the World Economic Forum (WEF), also met Crown Prince Mohammed Bin Salman, Minister for Investment Khalid Al-Falih, Minister for Finance Mohammad Al Jadaan and Minister for Industry Bandar bin Ibrahim Alkhourayef in separate engagements, on Sunday.

At a gala dinner hosted by the Saudi crown prince, the PM thanked MBS for sending a high-powered delegation to Pakistan led by Foreign Minister Faisal bin Farhan bin Abdullah.

To continue discussions, the prime minister said that he had brought a high-powered delegation to Riyadh, including key ministers responsible for investment, so that follow-up meetings could take place between the relevant officials.

Earlier, Saudi Minister for Investment Khalid Al-Falih praised the PM as being ‘a man of action’, saying: “We are all aware of your performance and speed of work… Your mission is our mission.”

Meanwhile, Finance Minister Mohammad Al Jadaan said that a delegation of Saudi investors would soon visit Pakistan.

Pakistan was a priority for their investment and Saudi Arabia would continue to fully cooperate in the fields of agriculture, information technology and energy, he said.

The prime minister also met the Saudi minister for industry, who expressed keen interest in collaborating with Pakistan in the fields of agriculture, mining, information technology and other areas.

The minister said he was in contact with the private Saudi companies regarding investment in Pakistan and the representatives of these companies would soon visit Pakistan.

Source: Dawn News
 

SBP holds key policy rate at 22%​


In line with market expectations, Pakistan's central bank has left its key policy rate unchanged at a record high of 22% for the seventh consecutive time in the past 10 months, ahead of the IMF executive board's final approval for the release of the last tranche of $1.1 billion on Monday.

The country has also initiated negotiations to secure a new IMF loan package of $6-8 billion for three years after the completion of the current one in April 2024.

Additionally, the crisis in the Middle East has the potential to cause a spike in energy prices in global markets. This may lead to a resurgence of imported inflation in the country, nullifying the recent efforts to decelerate inflation through maintaining a tight monetary policy for over three years now.

It is anticipated that the inflation rate will decrease to around 17% for April 2024 from 20.7% in the previous month of March, having peaked at 38% in May 2023. Consequently, the real interest rate turned positive in March by 1.3 percentage points, with further improvement expected in April.

"The MPC (monetary policy committee) observed that the level of inflation remains high. Simultaneously, global commodity prices seem to have bottomed out amidst resilient global growth. Recent geopolitical events have also introduced uncertainty regarding their outlook. Furthermore, upcoming budgetary measures may impact the near-term inflation outlook,” State Bank of Pakistan (SBP) stated in its monetary policy statement

Since its last meeting held in mid-March 2024, the MPC noted key developments. First, data for the first half of FY24 suggests that economic activity is recovering at a moderate pace, led by a strong rebound in the agriculture sector.

Second, the current account recorded a significant surplus in March 2024, which helped to stabilise the SBP’s foreign exchange reserves despite substantial debt repayments and weak financial inflows.

Third, inflation expectations of consumers increased slightly in April 2024, while those for businesses declined. Lastly, leading central banks, particularly in advanced economies, have adopted a cautious policy stance after noticing some slowdown in the pace of disinflation in recent months.

Incoming data continues to support the MPC’s earlier expectation of a moderate recovery in this fiscal year, with real GDP growth projected to remain in the range of 2 to 3%.

The agriculture sector remains the key driver, with robust growth of 6.8% in the first half of FY24, supported by a significant increase in rice, cotton, maize, and wheat harvests, according to the latest official estimates.

In the industrial sector, large-scale manufacturing reported a 0.5% decline in July-February FY24 compared to a 4% contraction recorded in the same period last year.

Regarding the services sector, the committee noted that growth in the first half of the year was slightly lower than expected, reflecting the impact of subdued demand.

Based on relatively improved capacity utilisation and business sentiments, as well as a low base effect from last year, the MPC expects value addition from the manufacturing and services sectors to recover in the coming months.

 
IMF okays release of final $1.1bn SBA tranche

The Executive Board of the International Monetary Fund (IMF) on Monday approved the immediate disbursement of approximately $1.1 billion to Pakistan.

The board met in Washington on Monday and completed the second review under the Stand-By Arrangement (SBA) for Pakistan, allowing for bringing total disbursements under the arrangement to about $3 billion.

All board members favoured releasing the last installment except India, which abstained.

“The completion of the second and final review reflects the authorities’ stronger policy efforts under the SBA, which have supported the stabilisation of the economy and the return of modest growth,” the IMF said in a statement.

“To move Pakistan from stabilization to a strong and sustainable recovery the authorities need to continue their policy and reform efforts, including strict adherence to fiscal targets,” the statement added.

The Fund also reminded Pakistan that while doing so, it also needs to protect the vulnerable from the possible impact of such reforms.

The IMF also emphasised the need to adhere to “a market-determined exchange rate to absorb external shocks; and broadening of structural reforms to support stronger and more inclusive growth.

Following the Executive Board’s discussion, Deputy Managing Director Antoinette Sayeh made the following statement:

“Pakistan’s determined policy efforts under the 2023 Stand‑By Arrangement (SBA) have brought progress in restoring economic stability. Moderate growth has returned; external pressures have eased; and while still elevated, inflation has begun to decline. Given the significant challenges ahead, Pakistan should capitalize on this hard‑won stability, persevering—beyond the current arrangement—with sound macroeconomic policies and structural reforms to create stronger, inclusive, and sustainable growth. Continued external support will also be critical.

“The authorities’ revenue performance, as well as federal spending restraint, helped achieve a sizeable primary surplus in the first half of FY2024, in line with program targets. Continued revenue mobilization efforts and spending discipline at both federal and provincial levels remain critical to ensure that the primary surplus target is achieved. Beyond FY2024, continued fiscal sustainability and additional space for social and development spending depend on further mobilizing revenues, especially from non‑filers and undertaxed sectors, and on improving public financial management.”

“The authorities have stabilized the energy sector’s circular debt over the course of the SBA through timely tariff adjustments and enhanced collection efforts. While these actions need to continue, it is also critical that the authorities undertake cost‑side reforms to address the sector’s underlying issues and viability.

“The State Bank of Pakistan’s tight monetary policy stance remains appropriate until inflation returns to more moderate levels. Further improvements in the functioning of the foreign exchange (FX) market, together with a market‑determined exchange rate, will help buffer external shocks and attract financing, thereby supporting competitiveness and growth. The significant rebuilding of FX reserves under the SBA needs to continue. Moreover, stronger action to address undercapitalized financial institutions and, more broadly, vigilance over the financial sector are needed to ensure financial stability.

“Achieving strong, long‑term inclusive growth and creating jobs require accelerating structural reforms and continued protection of the most vulnerable through an adequately‑financed Benazir Income Support Program. Priorities include advancing the reform of state-owned enterprises (SOEs), including to ensure that all SOEs fall under the new policy framework; strengthening governance and anti‑corruption institutions; and continuing to build climate resilience.”

SOURCE: DAWN
 
Astonishing figures. more than 26 BILLIONS USD in debt from CHINA. Doomed.

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Uber said on Tuesday that it had made the decision to cease operating its ride-hailing app in Pakistan.

“We’ve made the decision to cease operating the Uber app in Pakistan,” a spokesperson for Uber told Dawn.com.

“Our subsidiary brand Careem will continue to operate, with the Careem app offering ride-hailing services across Pakistan and earning opportunities for drivers,” the spokesperson added.

In 2019, Uber had acquired its rival Careem for $3.1 billion. The two companies had said they would continue to operate their respective regional services and independent brands.

In October 2022, Uber had ceased operations in Karachi, Multan, Faisalabad, Peshawar and Islamabad. It had decided to operate in the five cities through Careem and through the Uber app in Lahore.

In an email sent to users in Lahore today, Uber said it had made the “difficult decision to no longer offer the Uber app services in Lahore as of April 30”.

“Ride-hailing services will continue to be offered through our subsidiary brand Careem and you will have the option to sign up and request a trip on Careem to have a seamless experience,” the email read.

“In light of this, Careem Rides may reach out to you to check in and sign up. Please fill the form provided below by May 3, 2024 if you do not want your details to be shared with Careem.

“If you currently hold Uber Cash balance in your Uber Wallet, we will be communicating with you in due course on the process for reclaiming your Uber Cash balance,” it said as users were also offered a 50 per cent discount on five rides with Careem.

Users in Lahore who tried to access the app were met with the message: “Uber no longer in Lahore”. They were also told they could use Careem to avail 50 per cent off on five rides with code LHR50.

Source: Dawn News
 

PM hails govt efforts as inflation plummets to two-year low of 17.3%​


Prime Minister Shehbaz Sharif hailed the recent downturn in inflation as a boon for the populace, deeming it a tangible sign of economic progress, as per a statement released by the Prime Minister’s Office on Thursday.

According to the Pakistan Bureau of Statistics (PBS), the pace of price increases decelerated to 17.3% in April compared to the same period the previous year, marking the lowest rate in two years and nearing the point from which prices initially surged.

Moreover, the decline in inflation surpassed projections from the Ministry of Finance, which had estimated a range of 18.5 to 19.5 per cent. This marked the fourth consecutive month of downward trajectory in inflation rates.

Prime Minister Shehbaz attributed these developments to the collective efforts spanning his previous 16-month-long tenure and continuing under the caretaker government.

He was quoted in the statement, saying, “Reduction of inflation is the first goal, with the grace of Allah, people will get more relief in economic activities.”

The recent reduction in petrol prices will also give relief to the people, he said, adding that the prices of oil have come down in the global market. Shehbaz directed provincial governments to ensure reduction in petroleum prices and enforce official food item prices.

“By the grace of Allah, by continuing in this direction, the lives of the people will improve further,” he maintained, adding that his government is leaving no stone unturned in trying to get maximum relief to the people at the earliest.

Notably, food inflation decelerated in both urban and rural areas, with urban centers experiencing a notable slowdown to 11.3 per cent and rural areas dipping below the single-digit mark to 9.7 per cent, according to the PBS.

However, core inflation, excluding energy and food items, marginally increased to 13.1 per cent in urban areas but dropped below 20 per cent in rural regions. This represents an approximate 6 per cent reduction compared to policy rates.

Despite these developments, double-digit price hikes persisted across all commodity groups except for alcoholic beverages, tobacco, and perishable foods. Non-perishable goods saw a single-digit increase at 9.7 per cent, while perishable goods inflation remained below 7 per cent.

The decline in wheat product prices by 10.5 per cent and wheat by 9.7 per cent in April was attributed to sales below the minimum wheat support price of Rs3,900 per 40 kg. However, the decision to allow wheat imports by the caretaker government was criticised for benefiting urban consumers while disadvantaging farmers.

Until the end of May, the private sector imported 3.5 million metric tons of wheat amounting to $1.1 billion.

Despite the overall decrease, the average inflation rate remained slightly below 26 per cent, surpassing the annual inflation target of 21 per cent. The IMF, in response to the slowing inflation rate projected at 12.7 per cent for the next fiscal year, continues to advocate for high interest rates in Pakistan.

 

Pakistan among recipients as ADB, donors pledge $5b replenishment​


Donors and the Asian Development Bank (ADB) have agreed to a replenishment of $5 billion for ADB’s Asian Development Fund (ADF) 14 and Technical Assistance Special Fund (TASF) 8, with Pakistan emerging as a recipient of the grants.

The commitment was made during ADB’s 57th annual meeting held in Tbilisi, Georgia, said a press release on Friday.

The ADF is ADB’s largest source of grants for operations in its poorest and most vulnerable developing member countries and is replenished every four years.

ADF 14—marking the 13th replenishment since the fund’s establishment—will support grant operations during the 2025-2028 cycle.

The statement said that the ADF 14 replenishment is about 22% higher than the $4.1 billion available in ADF 13, and will provide eligible ADB members with the largest-ever volume of ADF grants. TASF 8 will provide grants that help prepare projects, build capacity, and provide technical or policy advice.

“Grants are more important than ever as our poorest and most vulnerable members seek to reverse recent development setbacks and take urgent action to combat the climate crisis,” said ADB President Masatsugu Asakawa.

“This remarkable replenishment demonstrates ADF donors’ continued partnership with ADB to address the pressing development challenges of those most in need.”

ADF 14 prioritises dedicated assistance to small island developing states that are particularly vulnerable—especially to climate change—and to countries in fragile and conflict-affected situations.

ADF 14 will continue to play a critical role in supporting climate change adaptation and disaster risk reduction. It will enable expanded assistance for regional cooperation and regional public goods, and for transformative gender action. It will also provide agile assistance in the event of emergencies through its crisis response window.

The press release said that more than $2.5 billion, or 51%, of the replenishment will be funded by contributions from donors including two new countries: Armenia and Georgia.

ADB will significantly increase its net income transfers to ADF, from just under $1.2 billion in ADF 13 to almost $1.6 billion in ADF 14, an increase of 35%.

The remaining $0.9 billion will comprise transfers from earlier ADF cycles and income from liquidity investments. In parallel, ADB intends to provide $16.7 billion in concessional loans, which have very low-interest rates over long repayment periods, during the ADF 14 period. Overall, ADB will be able to provide more than $8 in grants and concessional loans for every $1 in donor contributions.

The following donors announced contributions to ADF 14: Armenia; Australia; Austria; Canada; Denmark; Finland; France; Georgia; Germany; Hong Kong, China; India; Indonesia; Ireland; Italy; Japan; Luxembourg; Malaysia; Netherlands; New Zealand; Norway; People’s Republic of China; Philippines; Portugal; Republic of Korea; Spain; Sweden; Switzerland; Taipei, China; Turkiye; United Kingdom; and United States.

The following developing member countries are the primary recipients of grants from ADF 14: Federated States of Micronesia; Kiribati; Kyrgyz Republic; Maldives; Marshall Islands; Nauru; Samoa; Solomon Islands; Tajikistan; Tonga; Tuvalu; and Vanuatu.

Grants will also be available to support the people of Afghanistan and Myanmar and for transformative projects in Bangladesh; Bhutan; Cambodia; Cook Islands; Fiji; Lao People’s Democratic Republic; Mongolia; Nepal; Niue; Pakistan; Palau; Papua New Guinea; Sri Lanka; Timor-Leste; and Uzbekistan.

 
Pakistan, Saudi Arabia reaffirm resolve to further enhance economic ties

Deputy Prime Minister (PM) and Foreign Minister Ishaq Dar and Saudi Arabia counterpart Prince Faisal bin Farhan Al Saud reaffirmed the resolve to further enhance economic cooperation between the two countries.

The two leaders held a bilateral meeting with the Saudi counterpart Prince Faisal bin Farhan Al Saud on the sidelines of the 15th OIC Islamic Summit Conference, in Banjul, The Gambia.

Noting the importance of the long-standing strategic and economic relations between Pakistan and Saudi Arabia, the Deputy Prime Minister and the Saudi Foreign Minister reaffirmed the resolve further to enhance economic ties and Saudi investments in Pakistan.

The Deputy Prime Minister lauded the “Vision 2030”, which aimed at socio-economic transformation of the Kingdom in the 21st century.

He stated that the recently held visit of the Saudi Foreign Minister to Pakistan, who was leading a high-powered delegation, represented a new momentum in economic collaboration between Pakistan and the Kingdom, according to a press release.

Deputy PM Dar and the Saudi Foreign Minister expressed deep concern over the recent developments in the Middle East and called for an immediate ceasefire in Gaza.

They also noted the important role of the Organization of Islamic Cooperation (OIC) on issues concerning the Muslim Ummah including the situations in Palestine and Kashmir.

The meeting came as a high-level trade delegation from Saudi Arabia is scheduled to arrive in Pakistan on Sunday (tomorrow) to explore investment opportunities in different sectors as well as to forge strong bonds with local entrepreneurs.

According to Petroleum Minister Musadiq Malik, the 50-member delegation includes representatives of about 35 companies in the Kingdom representing various economic sectors.

The minister said 76 Pakistani business companies have been shortlisted in this regard, adding that cooperation between Islamabad and Riyadh will be increased at the government and private levels.

The ministry had selected a large number of Pakistani companies in the respective sectors whose officials would have business-to-business meetings with their Saudi counterparts, and would hopefully enter into business and investment deals, he added.

 
If I am not wrong, Saudi Arabia can stop all these investments if Pakistan goes against USA policies.
 

PM on wheat import scandal: Fix the responsibility, furnish a report by Monday​

ISLAMABAD (Dunya News/Web Desk) – Prime Minister Shehbaz Sharif on Saturday ordered a comprehensive and transparent probe into the caretaker government’s decision concerning wheat import scandal – a move that has triggered a full-blown crisis in the country as farmers are now forced to sell their produce at cheaper rates.

It was the caretaker government which allowed the grain imports notwithstanding the fact that the imminent wheat crop harvest and ample stocks available in Pakistan, especially in Punjab – the country’s food basket.

As Cabinet Secretary Kamran Ali Agha – who is heading the second inquiry committee to investigate scandal – reached the PM Office, sources say Shehbaz directed him to fix the responsibility in unambiguous terms and furnish the report by Monday.

In this regard, the prime minister ordered the federal secretary to use the available record and documents while also presenting recommendations on the subject.

On the other hand, the sources say a committee meeting is in the session despite Saturday being a weekly holiday, which will go through a report filed by a panel formed earlier to ascertain the facts.

The move coincides with a PML-N gathering to be held at the party’s Model Town headquarters in Lahore to define a strategy to deal with the prevailing wheat procurement crisis.

 
Won’t tolerate corruption in FBR: Shehbaz

Prime Minister Shehbaz Sharif, while acknowledging the possibility of inadvertently removing some honest officers during a recent purge in the Federal Board of Revenue (FBR), stated on Saturday that his government would not tolerate any corrupt officers within the tax authority.

"We might have made an honest mistake in removing some upright officers; if so, we will rectify the matter," Shehbaz said on Saturday while addressing a ceremony in Lahore held to honor honest and hardworking FBR officers.

The prime minister emphasized that the time had come "to separate the wheat from the chaff" and to base decisions of reward and punishment purely on merit.

This ceremony appeared to have been organized to alleviate fears and concerns among FBR officers following the purge, during which eleven of their most senior officers were removed based on adverse reports prepared by intelligence agencies.

The move was met with disapproval by members of the Pakistan Customs Groups, who reportedly passed a resolution demanding that details of the investigations be made public.

The PM highlighted that the biggest challenge facing the country is the low revenue collection in relation to the tax-to-GDP ratio. He stated that, by conservative estimates, Pakistan's revenue generation should be three to four times its current level.

Adding a rough estimate, he said that if revenue collection currently stands at Rs9 trillion, and the lowest end of the conservative estimate, which is three times, is employed, then our revenue generation should be '21 trillion' (27 trillion).

He remarked that this untaxed revenue was being siphoned off due to greed, fraud, and corruption—a situation that compels Pakistan to seek assistance from lenders.

"This is a promise I made when I was elected as the PM two months ago, that step by step we would begin to distinguish between right and wrong in all major departments."

He said a new crop of officers would be elevated in the FBR purely on merit.

He regretted that Rs2.7 trillion was under litigation for over a decade at Appellate Tribunal Inland Revenue. He said a new law has been made to help expedite these cases.

Shehbaz said new officers would be inducted through tests while their viva would be taken by people of impeccable repute.

He was referring to Appellate Tribunal Inland Revenue (ATIR) members, who would be appointed through an open competition under the new scheme.

The PM said he had proposed a salary of Rs3 million for the ATIR members but the attorney general suggested keeping it on a par with the pay of high court judges to avoid any discrepancy.

He cited a case of tax fraud in which the national kitty was deprived of Rs750 billion via fake tax receipts. “This amount is just tip of the iceberg as only tax books of three years have been reviewed.”

He also termed the track and trace system introduced by the PTI government as the biggest fraud committed in the national history. He warned that if this system does not deliver, they will outsource it. “It is a point of introspection,” he said.

Earlier, the prime minister gave away the shields to the honest and hardworking officers of the FBR and said that he was feeling proud that the country had plenty of such honest officers which could play their due role in development and prosperity of the country.

SOURCE: EXPRESS TRIBUNE
 
Won’t tolerate corruption in FBR: Shehbaz

Prime Minister Shehbaz Sharif, while acknowledging the possibility of inadvertently removing some honest officers during a recent purge in the Federal Board of Revenue (FBR), stated on Saturday that his government would not tolerate any corrupt officers within the tax authority.

"We might have made an honest mistake in removing some upright officers; if so, we will rectify the matter," Shehbaz said on Saturday while addressing a ceremony in Lahore held to honor honest and hardworking FBR officers.

The prime minister emphasized that the time had come "to separate the wheat from the chaff" and to base decisions of reward and punishment purely on merit.

This ceremony appeared to have been organized to alleviate fears and concerns among FBR officers following the purge, during which eleven of their most senior officers were removed based on adverse reports prepared by intelligence agencies.

The move was met with disapproval by members of the Pakistan Customs Groups, who reportedly passed a resolution demanding that details of the investigations be made public.

The PM highlighted that the biggest challenge facing the country is the low revenue collection in relation to the tax-to-GDP ratio. He stated that, by conservative estimates, Pakistan's revenue generation should be three to four times its current level.

Adding a rough estimate, he said that if revenue collection currently stands at Rs9 trillion, and the lowest end of the conservative estimate, which is three times, is employed, then our revenue generation should be '21 trillion' (27 trillion).

He remarked that this untaxed revenue was being siphoned off due to greed, fraud, and corruption—a situation that compels Pakistan to seek assistance from lenders.

"This is a promise I made when I was elected as the PM two months ago, that step by step we would begin to distinguish between right and wrong in all major departments."

He said a new crop of officers would be elevated in the FBR purely on merit.

He regretted that Rs2.7 trillion was under litigation for over a decade at Appellate Tribunal Inland Revenue. He said a new law has been made to help expedite these cases.

Shehbaz said new officers would be inducted through tests while their viva would be taken by people of impeccable repute.

He was referring to Appellate Tribunal Inland Revenue (ATIR) members, who would be appointed through an open competition under the new scheme.

The PM said he had proposed a salary of Rs3 million for the ATIR members but the attorney general suggested keeping it on a par with the pay of high court judges to avoid any discrepancy.

He cited a case of tax fraud in which the national kitty was deprived of Rs750 billion via fake tax receipts. “This amount is just tip of the iceberg as only tax books of three years have been reviewed.”

He also termed the track and trace system introduced by the PTI government as the biggest fraud committed in the national history. He warned that if this system does not deliver, they will outsource it. “It is a point of introspection,” he said.

Earlier, the prime minister gave away the shields to the honest and hardworking officers of the FBR and said that he was feeling proud that the country had plenty of such honest officers which could play their due role in development and prosperity of the country.

SOURCE: EXPRESS TRIBUNE
You are the corrupt,you and your family are the corrupt, your form 47 handlers are the corrupt. So loser, who will you not tolerate.
 
Farmers body announces countrywide protests from May 10

Farmers body Kissan Ittehad on Sunday announced to begin countrywide protests from May 10 amid the wheat crisis in the country, ARY News reported.

Speaking at a press conference, Kissan Ittehad Chairman Khalid Khokhar said that the farmers will take to the streets on May 10 against the government’s decision to import the commodity instead of procuring it from local farmers.

While alleging corruption in the import of wheat, Khokar said that those involved in corruption in wheat imports should be hanged to death.

He claimed that the “wheat mafia” earned Rs100 billion from the imports while Pakistan faced a loss of around $1 billion.



 

PM Shehbaz assures all-out support to Saudi investment​

ISLAMABAD (Dunya News) – Prime Minister Shehbaz Sharif on Monday assured his government’s blanket support to the Saudi investment, enabling the investors and businessmen to accomplish their future projects in Pakistan expeditiously with joint ventures and replicate them within short time for the mutual benefits of the people of both countries.

Addressing a dinner gathering hosted in the honour of visiting delegation of the Kingdom of Saudi Arabia, the prime minister said that time waited for none and stressed that they should overcome the challenges if they really wanted to make use of this opportunity as the Saudi leadership and their leading investors and business people wanted to help Pakistan.

The prime minister reiterated that it was not the government’s job to do businesses but it had to offer policy frameworks, act like a catalysts and remove all the hurdles for speedy achievement of economic targets.

He said that the government had resolved and was committed to remove all the bureaucratic hurdles and red tape in the way of foreign investment.

Chief of Army Staff General Syed Asim Munir, federal ministers, Saudi ambassador in Pakistan, members of the delegation and senior officials were present during the event.

The prime minister said that Special Investment Facilitation Council (SIFC) was the very robust and all encompassing vehicle to attain all those projects in the interest of people of Pakistan and the Saudi investors, leading to further strengthening of mutual cooperation and partnership.

The SIFC was a model acceptable to the Saudi delegation and they were fully satisfied over the existing opportunities, he observed. The prime minister said that from diverse projects, the Saudi investors could earn profits and if they provided them a mechanism free of troubles, bureaucratic hurdles and red tape, then the sky would be the limit.

The prime minister expressed his satisfaction over the solid and tangible progress achieved during the delegation’s interaction with the Pakistani counterparts. He said that shortly, they would witness solid agreements worth billions of dollars investment. Recollecting his visit to the Kingdom of Saudi Arabia during Ramzan ul Mubarak, the prime minister termed his meeting with the Crown Prince and Prime Minister of the Kingdom of Saudi Arabia Mohammed bin Salman as ‘a wonderful interaction and he was extremely encouraged and deeply impressed with his forward looking vision that transformed KSA in many ways to come, whether it was in agriculture, education, IT, communication and infrastructure, youth empowerment and all inclusive policies’.

Crown Prince’s dynamic and visionary leadership had placed KSA among the most progressive societies in the world, the fastest growing economy with the latest infrastructure, transport facilities, provision of jobs and progress in every sphere of life which was phenomenal, he added.

The prime minister said that the Saudi delegation interacted with the Pakistani counterparts which would further enhance the bonds of brotherhood and friendship and transform into new heights.

“The KSA always stood with Pakistan through thick and thin and in different times. If we thank them, we can’t for their generosity for the last seven decades,” he added.

He said that some thirty years back, Pakistan was able to offer their Saudi brothers training in different walks of life, but today, KSA was far more experienced and had immense potential to train Pakistanis.

Saudi Assistant Minister for Investment Ibrahim Al Mubarak, on the occasion, thanked the prime minister for warmly hosting them. He said that their visit was a testimony to their deep friendship and strategic partnership which was very important, adding under their leadership’s directives, they moved swiftly to explore partnership with Pakistan.

He also lauded response of the private sector that interacted with them, adding that the relationship between the two brotherly countries was very strong and the both countries could achieve shared economic objectives together.

Source: Dunya News
 
Pakistan loses over Rs700bn annually to illegal trade: Report

Pakistan suffered a staggering annual loss of more than Rs700 billion due to illicit trade activities, ARY News reported, quoting a report released by a renowned international research organization.

Collaborating with economic research firm Prime, Director General (DG) Trace It Geoffrey Hardy unveiled the findings of the report, highlighting the significant impact of undocumented and illegal trade practices on Pakistan’s economy.

According to the report, a staggering 40 percent of Pakistan’s economy is affected by illicit activities such as smuggling and counterfeit goods, resulting in an annual loss of Rs700 billion.

Hardy pointed out that Pakistan’s high inflation rate, currently at 25 percent, serves as a lucrative incentive for smuggling operations, particularly in counterfeit agricultural and food products, posing threats to both public health and economic stability.

He said that the smuggling of fake medicines, identified as the most perilous aspect of trafficking, alongside tire smuggling, which alone accounts for an annual loss of Rs40 billion to the economy.

The report further reveals that cigarette smuggling and counterfeit manufacturing contribute to an annual loss of Rs240 billion, while tea smuggling accounts for a loss of Rs45 billion.

Moreover, an alarming statistic indicates that 60 percent of Mobil oil sold in Pakistan is smuggled and counterfeit.

Dr. Ali Salman, executive director of the economic research institute, emphasized that the proliferation of smuggling is exacerbated by the government’s increase in taxes and tariffs, creating an environment conducive to illicit trade practices.

Despite government efforts to curb smuggling, challenges persist. Dr. Ali Salman highlighted the inadequacy of customs officials, with only 400 officials deployed along the 1600 km border, further underscoring the need for enhanced measures to combat trafficking and protect Pakistan’s economy.


ARY News
 
Saudi Crown Prince MBS expected to arrive within days to seal investment deals

Against a flurry of activities between Pakistan and Saudi Arabia to boost trade ties, Crown Prince Mohammed Bin Salman is expected to arrive in Pakistan this month to conclude deals being negotiated between Islamabad and Riyadh.

According to Foreign Minister Ishaq Dar, dates for the visit had not been communicated to Pakistan, but media reports claimed that the visit was likely on May 10-15.

“The crown prince had accepted Prime Minister Shehbaz Sharif’s invitation. The visit is on the cards, but no dates have been communicated to us as yet,” FM Dar said at a briefing on his participation in the World Economic Forum (WEF) in Saudi Arabia and Organisation of Islamic Cooperation meetings in Gambia.

He explained that the initial understanding was for discussions to commence at the government level after MBS committed to invest $5 billion in Pakistan, followed by subsequent talks between business executives. Saudi Foreign Minister Faisal bin Farhan Al Saud led a ministerial delegation to Islamabad on April 15-16. Later, FM Dar and PM Shehbaz held meetings with Saudi leadership on the sidelines of the WEF and over the past few days a delegation of Saudi businessmen led by the Saudi deputy minister for investment visited Islamabad.

FM Dar said discussions with the Saudi business executives were “elaborate and the group left very impressed” with the way Pakistan was proceeding on the issue.

He said large projects like Reko Diq and petrochemicals would be undertaken at the government level, but the private sector would collaborate on increasing trade volume and joint ventures.

Pak-Iran gas pipeline

Speaking about the long-stalled project, the foreign minister said Islamabad would decide on this issue in light of its national interest and commitments it had made.

Referring to the external pressure, especially from the US, the minister said, “We can’t allow anyone to dictate to us or use the veto.”

He said Pakistan expected other countries to respect its sovereignty, much like it respected theirs.

At the conclusion of the Iranian president’s visit to Pakistan last month, both countries called for closer cooperation in the energy sector and the gas pipeline was mentioned as one of the projects. Both sides, however, did not say how they planned to move ahead in light of the US sanctions against Iran.

Furthermore, Ishaq Dar said he would visit China on a three-day trip from May 13 to May 15 for the strategic dialogue with his Chinese counterpart Wang Yi. This would be the foreign minister’s first visit to Beijing after the installation of the new government. His visit is likely to be preceded by Planning Minister Ahsan Iqbal’s trip to China.

About the current wheat crisis, Ishaq Dar clarified that during the last tenure of the PML-N government, which ended last August, he did not approve a summary for the import of wheat that had been presented to him. He was the head of the of the Economic Coordination Committee. “The relevant ministry could not satisfy me about the need for importing wheat,” he said while clarifying his decision on not approving the summary.

PTI-US envoy meeting

The foreign minister confirmed that the Foreign Office had facilitated a meeting between US envoy Donald Blome and Opposition Leader Omar Ayub at the request of the US embassy.

This was part of a broader series of engagements that the US embassy sought with various Pakistani political figures, both from the government and opposition, in March.

This was part of a broader series of engagements that the US embassy sought with various Pakistani political figures, both from the government and opposition, in March.

“It was the initiative of the US envoy,” Mr Dar emphasised.

The PTI was chided by its opponents for engaging with the US envoy, given its past allegations that the US conspired to oust PTI leader Imran Khan as prime minister. The party, however, clarified that the meeting was facilitated by the FO and not sought by the PTI.

SOURCE: DAWN
 
PM Shehbaz orders formation of Pakistan Skill Company to train overseas Pakistanis

Prime Minister Shehbaz Sharif on Wednesday ordered the establishment the Pakistan Skill Company and Pakistan Skill Development Fund to unify technical and vocational education countrywide and provide better employment to the country’s workers abroad.

The prime minister, chairing a high-level meeting reviewing the matters of the Ministry of Overseas Pakistanis and Human Resource Development and National Vocational and Technical Training Commission (NAVTTC), decided to introduce reforms within both organisations.

Shehbaz also ordered the immediate establishment of the Pakistan Skill Development Fund, according to a federal government post on X.

The premier said NAVTTC should be further enhanced to provide world-class technical and vocational training to the young workforce abroad. He added that “globally renowned and international certifications should be ensured in all fields”.

The prime minister emphasised the importance of greater cooperation between the federal institutions, adding that the “technical training plan should be implemented in line with international standards”.

Similarly, he stressed collaboration between the centre and provinces to elevate the quality of Pakistan’s technical manpower and human resource development.

He also called for a coordinated and organised database of Pakistani workers in collaboration with Nadra, NAVTTC and provincial institutions, and the establishment of an integrated system to regulate manpower equipped with world-class professional technical skills.

Stressing the need for implementing the technical and vocational training plans, the prime minister also ordered reforms to the licensing regime of companies employing skilled Pakistanis abroad.

PM Shehbaz said individuals and companies involved in defrauding the people and inflicting financial losses should be identified.

He instructed authorities to ensure meritocracy and transparency in the posting of community welfare attaches in Pakistani missions abroad.

The prime minister was briefed about the steps taken by NAVTTC regarding the vocational and technical training of the workforce in Pakistan.

He was told that NAVTTC would provide vocational and technical training to 60,000 people in 2024, while the figure would rise to 0.6 million in the next three years following the reforms.

The meeting’s participants were told that the exchange of information about employment opportunities and required skills from foreign countries was being ensured and that data on manpower consumption was also being obtained from local industries.

Source: Dawn News
 
Pakistan, World Bank agree on New Partnership Framework for reforms

The agreement was reached during a meeting between Prime Minister (PM) Shehbaz Sharif and a delegation led by Regional Vice President of the World Bank for South Asia Martin Raiser.

Welcoming Martin Raiser, Prime Minister Shehbaz lauded the contribution of the World Bank to the development of Pakistan.

The prime minister appreciated the support extended by the Bank for building the climate resilient infrastructure in the wake of 2022 floods in Pakistan. He briefed the delegation on the reform agenda of the government including digitization of the entire tax system, power sector reforms, enhancing per acre yield in the agriculture sector, addressing the issue of child stunting, etc.

Appreciating Pakistan’s aggressive reforms agenda, Martin Raiser said the World Bank was ready to collaborate with the country in its journey of transformation of the economy aimed at sustainable development.

Both sides agreed to engage in a long-term, focused partnership under a new Country Partnership Framework with an annual review mechanism to assess progress and ensure that results are achieved.

The strategy will include flexibility for future course correction. The new partnership will have the ambition to achieve transformational impacts over a decade on a selective set of critical development priorities for Pakistan.

The initial set of priorities that were discussed in the meeting included structural economic reforms including domestic resource mobilization, particularly via digitalization and tax policy reforms.

Human capital development, specifically addressing child stunting and improving foundational learning was also discussed.

Likewise, the energy sector reforms, including increased participation of the private sector in transmission and distribution, and transition to green energy to make energy cheaper, cleaner and financially sustainable also came under discussion.

In order to better cope with the increased water scarcity and climate-related shocks, both sides emphasized collaboration in climate adaptation.

For increasing economic opportunities, including in the agriculture sector, Pakistan will benefit from the Bank’s expertise in mobilizing global expertise and best practices, institutional capacity building, leveraging digital transformation and private sector participation, including via the World Bank’s private sector arm, the International Finance Corporation and the Multilateral Investment Guarantee Agency.

The two sides agreed that the process for preparation of the new Country Partnership Framework will consist of consultations with the federal and provincial governments as well as academia, parliamentarians, civil society, development partners and the private sector.

The World Bank will coordinate with stakeholders to discuss the partnership priorities duly aligned with the key development priorities and strategy of the Government of Pakistan.

The prime minister witnessed the signing of a joint communique in this respect by the World Bank’s Country Representative Najy Benhassine and Secretary of Economic Affairs Division Dr. Kazim Niaz.

 
PM Shehbaz Sharif seeks Qatari investment in Pakistan

Prime Minister Shehbaz Sharif on Thursday said that Pakistan was keen to transform its excellent ties with Qatar into a mutually beneficial robust economic partnership.

The prime minister, in a meeting with Minister of State for Foreign Affairs of Qatar Mohammed bin Abdulaziz Al-Khulaifi, who called on him here, stressed that the two countries should continue to work together to strengthen bilateral cooperation in all spheres of mutual interest, especially in trade and investment.

Highlighting the important role of Qatar Investment Authority (QIA), he said that Pakistan would like to see Qatar expand its investment portfolio in Pakistan in priority sectors.

To this end, the Special Investment Facilitation Council (SIFC) would be able to ensure swift coordination, he assured.

Welcoming the Qatari dignitary and his delegation, the prime minister said that Pakistan greatly valued its historic, cordial and fraternal relationship with Qatar and both countries had always supported each other through thick and thin.

PM Shehbaz conveyed his warm wishes and greetings for the Amir of Qatar Sheikh Tamim bin Hamad Al Thani and the Prime Minister and Foreign Minister Sheikh Mohammed bin Abdulrehman bin Jassim Al Thani.

The Qatari minister of state thanked the prime minister for receiving him and conveyed a special message of the leadership of Qatar to him, emphasizing Qatar’s desire to strengthen the enduring bonds of brotherhood with Pakistan as well as its keen interest in investing in Pakistan.

The Minister of State for Foreign Affairs is on a one-day visit to Pakistan as a special envoy of the Prime Minister and Foreign Minister of the State of Qatar.

 
Shehbaz Sharif and his team are more focused on getting investments from the Middle East.
 
Pakistan’s foreign exchange reserves surge to $14.5 bn

According to data released by the State Bank of Pakistan (SBP) on May 3, the domestic foreign exchange reserves witnessed a substantial rise, standing at $14.45 billion.

Notably, the reserves of the SBP experienced a commendable surge, jumping by $1.11 billion to reach $9.12 billion.

Similarly, the foreign exchange reserves held by commercial banks also saw a significant upswing, recording an increase of $2.86 billion to reach $5.33 billion.

Last month, Pakistan received the much-awaited $1.1 billion final tranche from the International Monetary Fund (IMF) as part of the $3 billion standby arrangement, the State Bank of Pakistan (SBP) confirmed.

The SBP said it received Special Drawing Rights (SDR) 828 million — equivalent to $1.1 billion in value — “following the successful completion of the second review by the Executive Board of IMF under Stand-By Arrangement (SBA)”

The central bank said that the disbursement will be reflected in SBP reserves for the week ending on May 3, 2024.

A day earlier, IMF’s Executive Board completed the second review under the Stand-By Arrangement (SBA) for Pakistan, allowing for bringing total disbursements under the arrangement to about $3 billion.

“The completion of the second and final review reflects the authorities’ stronger policy efforts under the SBA, which have supported the stabilization of the economy and the return of modest growth,” the IMF said in a statement.

“To move Pakistan from stabilization to a strong and sustainable recovery the authorities need to continue their policy and reform efforts, including strict adherence to fiscal targets,” the statement added.

 
SBP reserves rise over $9bn on IMF inflow

Foreign reserves held by the State Bank of Pakistan (SBP) have increased to $9.12 billion after the disbursement of the last tranche of $1.1 billion loan from the International Monetary Fund (IMF) under the short-term deal.

The SBP issued a statement on Thursday on the current position of the country’s liquid foreign reserves post-IMF inflow, confirming the central bank’s reserves stood at $9.12 billion in the week ending May 3.

Meanwhile, the net foreign reserves held by commercial banks stood at $5.3 billion, bringing the country's total forex reserves to $14.45 billion — a nearly two-year high which was last recorded above $9 billion in mid-July 2022.

The SBP reserves increased by $1.114 billion to $9.1203 billion "mainly due to receipt of $1.1 billion from the global lender as final tranche" under the loan programme, the statement added.

Although, the central bank had received SDR 828 million (around $1.1 billion) from the global lender last month, the SBP made it clear that the amount would be reflected in the foreign exchange reserves for week ending on May 3.

The fresh tranche was the third and final of $3 billion Stand-By Arrangement (SBA) that the country reached with global lender last summer to avert default threat.

"Amount would be reflected in SBP’s foreign exchange reserves for week ending on May 3," the central bank had said a day after the global lender approved the last tranche of Pakistan under the $3 billion Stand-By Arrangement (SBA).

Elaborating on the reserves’ position after the monetary policy meeting on May 2, the central bank’s governor, Jameel Ahmad, informed analysts that the forex deposits are currently in a comfortable position.

The SBP has paid off its commercial loans and now its debt profile consists of bilateral and multilateral loans, which has resulted in an improvement in the maturity profile of the debt, Ahmad said.

Despite weak financial inflows, the reduction in the current account deficit has enabled the central bank to make significant debt repayments, including the repayment of a $1 billion Eurobond, The News reported.

Meanwhile, Finance Minister Muhammad Aurangzeb also announced that a mission from the IMF is expected to arrive in Islamabad in mid-May to initiate talks for a new bailout.

He further said the country might have a staff-level agreement on the new programme by the start of July. The Fund and the government are already in talks for the new funding.

The country’s economy is struggling with a precarious balance of payments because it needs to repay nearly $24 billion in debt and interest over the next fiscal year—a sum that is significantly greater than the foreign currency reserves held by the central bank.


Geo TV
 
As an outsider I feel that the government is doing a great job in improving economy which rightfully seems to be the topmost priority atm. Inflation is down and manufacturing countries are running to invest. Privatisation of institutions and an open policy towards West Asia and China/USA/ Iran is right choice imo.
 
Pakistan, Korea sign Aide-Mémoire for Enhanced Development Cooperation

Korea’s Economic Development Cooperation Fund (EDCF) and the Pakistan’s Ministry of Economic Affairs (MoEA) on Friday signed an Aide-Mémoire to chart a mid-term plan for implementation of development projects between 2024-2026.

The Aide-Mémoire, which was signed at the conclusion of visit by EDCF Country Programme Mission from the Export-Import Bank of Korea (KEXIM), represents a key milestone in deepening economic ties between Pakistan and the Republic of Korea.

According to MoEA press release, the Aide-Mémoire was signed by Joint Secretary, Ministry of Economic Affairs, Sajid Manzoor Asadi and Director of the Asia Team, EDCF Mission, Bonhyun Koo. The signing was witnessed by Secretary of the Ministry of Economic Affairs, Dr Kazim Niaz and other officials from the MoEA and EDCF.

Additionally, a project concept for the construction of a Pediatric Hospital in Jamshoro was signed, with EDCF committing USD 60 million in financing for the hospital’s construction in Sindh.

During the course of the visit, the EDCF Mission engaged with various government departments in Pakistan, including the Ministry of Planning, the National Highway Authority, Provincial Planning & Development Departments, and others, to discuss and refine the proposed development agenda.

The EDCF mission’s objectives also included knowledge sharing and capacity building, which both sides agreed to further enhance in the coming years.

In total, the EDCF has committed an indicative USD 900 million for lending to Pakistan over the next three years, with an additional USD 2 million allocated for technical assistance. This commitment will support high-priority projects, which will be further refined during an upcoming Policy Dialogue.

The Secretary, Ministry of Economic Affairs and Director, Asia team, EDCF Mission, emphasized their shared commitment to promoting sustainable development and fostering stronger economic cooperation.

They highlighted that the Aide-Mémoire underscores the commitment of both sides to work towards sustainable development through projects in priority sectors, including transport, healthcare, energy, and information and communication technology (ICT).

They expressed gratitude to all stakeholders for their support and collaboration, the press release added.

 
PM informed of Rs300b investment venture

Service Long March Tyres Group has decided to invest additional Rs300 billion in Pakistan that will help create new job opportunities and increase its exports.

Prime Minister Shehbaz Sharif was informed in this regard by Service Long March Tyres Chairman Jin Yongsheng during a meeting, a PM Office news release said.

The prime minister welcomed the company’s decision to expand its operations in Pakistan, saying his government’s business and investment-friendly policies were now yielding positive results.

SOURCE: EXPRESS TRIBUNE
 
PM Shehbaz Sharif seeks investment from UK

Prime Minister Shehbaz Sharif on Saturday expressed Pakistan’s desire to attract investment from the UK and other countries, highlighting the country’s vast potential in diverse areas including agriculture, food security, information technology, tourism, and mining.

He was talking to British High Commissioner to Pakistan Jane Marriott, who called on him at the PM House.

The meeting was also attended by Deputy Prime Minister Ishaq Dar and Chief Economist and Director of the Economic and Evaluation Directorate, Foreign Commonwealth and Development Office, London, Professor Adnan Khan.

The prime minister said: “Pakistan and the United Kingdom enjoy long-standing relations that are further strengthening with the passage of time.”

He also emphasized the government’s commitment to improving governance structures and introducing institutional reforms.

He said that the government was taking measures at the micro and macroeconomic levels to recover the country’s economy.

Moreover, he said the digitization process of the Federal Board of Revenue (FBR) was in a final stage.

The British delegation felicitated the government’s initiative to declare an education emergency in the country and expressed support for Pakistan’s recovery efforts.

 
Federal Finance Minister Muhammad Aurangzeb has said that the best work has been done under the leadership of Prime Minister Shehbaz Sharif, if you want economic stability in the country, you will have to go towards privatisation

Addressing the ceremony in Lahore, he said that we should talk about the country and where it stands now, after the last 9 to 10 months, a phase has come to us.

Federal Finance Minister Muhammad Aurangzeb said that I am very clear about the proposals that have come today, we will go with all the provinces in consultation, the businessmen who are outside the tax net should come to the tax net themselves.

He said that he will provide all kinds of facilities, will not go back from the tax net, provide facilities, negotiate but will not go back from the track.

Federal Minister of Finance Muhammad Aurangzeb said that the best proposals were presented in today's conference, the deficit has been reduced by one million dollars in the last financial year, the currency is stable now, foreign buying has taken place for the first time.

The Federal Finance Minister said that the tenure of caretaker government is also credited, he has noted the suggestions on the reforms to be brought, there is a need to work on tax, GDP and energy.

He said that we have to start from somewhere, if we don't start, how will we finish, people from the private sector have also been taken on board.

Mohammad Aurangzeb says that Ishaq Dar has also chaired the meeting regarding privatization, we are all on the same page, not only international but also national capitalists will be taken on board.

The federal minister said that the private sector has to come forward to get the country out of trouble, the government's job is to improve governance, 8 to 10 trillion cash is currently circulating in the market in Pakistan.

He said that in April we started the campaign for tax registration, people think that if they come in the tax net, then they will be harassed unnecessarily, we will provide all kinds of facilities, the campaign to bring them in the tax net. Will not back down.

Mohammad Aurangzeb said that giving uniform energy tariff to industries is a legitimate demand, industries cannot work on 25 to 26 percent interest rate.

He says that going towards complete digitalisation, revenues will increase and transparency will also come, the track and trace system is a complete failure it has not been implemented, currently the current account deficit is less than 1 billion dollars.

The federal minister further said that the inflation is coming down, the stock exchange is at the highest level in history, the Shahbaz Sharif government and the caretaker government have fulfilled the 9-month agreement well, the IMF team has come to Pakistan. The program will be much more important and longer.

He also said that we have to completely eliminate electricity theft, the boards of electricity distribution companies are changing, the private sector will also be involved.

Source: Jang
 

The government is considering raising tariffs on imports​

Pakistan is considering raising higher tariff walls against imports of used cars up to 1,300 cubic centimeters and wheat in a bid to discourage their imports, which this year have cost the country about $1.4 billion in stockpiles and turmoil in farmers.

Sources told The Express Tribune that the government is mulling two separate budget proposals on restoration of duty on import of wheat and increase in duty on import of used cars with engine displacement up to 1,300 cc.

Another proposal is to impose an additional 1% customs duty on a range of items that are currently subject to normal customs duty of 3% to 11%, according to government sources. This additional 1% customs duty can fetch at least Rs 20 billion in revenue in the next budget.

The budget proposals were discussed amid an IMF mission that landed in Pakistan on Thursday. The technical team held discussions on Friday ahead of full-scale negotiations starting next week.

Esther Perez Ruiz, the IMF’s permanent representative said on Saturday that, “A mission team led by Nathan Porter, head of the IMF’s mission in Pakistan, will meet with the authorities next week to discuss the next phase of the engagement. The aim is to lay the foundations for better governance and stronger, more inclusive and resilient economic growth that will benefit all Pakistanis.”

Her statement implied that the IMF is here to test the waters, as she highlighted the “next phase of engagement”. The IMF team is here to gauge whether the PML-N government is serious about reforms and whether it has the capacity to undertake reforms given the higher level of political uncertainty, the sources said.

These proposals are in the early stages of budget discussions and may soon be brought before the Tariff Policy Board for approval and inclusion in the 2024-2025 fiscal year budget. Pakistan has so far spent $1.1 billion to import 3.5 million metric tons of wheat and another $290 million to import 20,000 cars during this fiscal year, according to official statistics.

Despite bumper crops, former prime minister Anwarul Haq Kakar’s government facilitated wheat imports by ensuring availability of foreign exchange reserves and providing priority berths to ships. In addition, the caretaker government extended the timetable for wheat imports by a month on February 23, just a week before the new National Assembly was sworn in.

As a result, farmers did not get the official support price of Rs 3,900 per 40 kg and sold their cash crop at about 24% less than the official price.

Prime Minister Shehbaz Sharif’s government has already ordered an inquiry to determine the facts of wheat imports during the interim regime. The government had zeroed out the 11% customs duty on wheat imports under the 5th schedule of the Customs Act. Sources said there is a proposal to bring back the 11% customs duty by amending the 5th schedule through the new Finance Bill.

In case the government needs to import wheat, the cabinet will have the authority to waive the 11% duty on the extent of government imports, the sources said. This proposal has been discussed at the level of the Ministry of Commerce and Finance Minister Muhammad Aurangzeb. Sources said an active budget proposal is under consideration to increase import duties on used cars. The proposal is to increase duties by 5% to 15% or bring them in line with existing rates for new cars with an engine displacement of up to 1,300cc. The revenue impact of this proposal is estimated to range from Rs 5 billion to Rs 15 billion, depending on the rate hike. In the first 10 months of the current fiscal year, Pakistan imported nearly 20,000 used cars worth $290 million, almost three times higher than the less than 5,000 vehicles imported in the last fiscal year.

In April last year, Pakistan completely removed regulatory duties on the import of used cars up to 1,800 cc and also reduced duties on new cars. Consumers of old used cars up to the 1800cc category received significant relief with the abolition of regulatory duties by 100%.

Overall, duties on 49 vehicle tariff lines were cut by 10% to 100%, and additional duties of 7% to 28% on cars were also removed in April last year, leading to an inflow of used car imports. Another factor contributing to higher imports was that local assemblers were unable to ensure timely deliveries due to government-imposed import restrictions. The central bank closely monitored almost every major letter of credit opened for imports, applying couponing and buying dollars from the market.

Pakistani consumers have also imported used vehicles due to their better quality, despite the fact that the government provides local assemblers with 240% to 500% protection.

Sources said the government is also mulling a proposal to impose an additional 1% duty on items currently subject to customs duty of 3% to 11% but not levy additional duty. This proposal, though inflationary in nature, could generate revenue of around Rs 10 billion.

 
The federal budget for the next fiscal year (FY2024-25) is likely to be presented on June 7, with an estimated total expenditure of Rs 16,700 billion

According to sources, the initial estimate for expenditures on interest and loans is Rs 9,700 billion, while the initial estimate for subsidies is Rs 1,500 billion.

Sources said that the estimate for tax revenue is over Rs 11,000 billion, with direct taxes expected to contribute Rs 5,300 billion and federal excise duty expected to contribute Rs 680 billion.

Sales tax is likely to generate over Rs 3,850 billion, while customs duty is expected to generate over Rs 1,100 billion, sources said.

The initial estimate for non-tax revenue is Rs 2,100 billion, with petroleum levy expected to generate Rs 1,100 billion. The federal budget deficit is expected to be around Rs 9,300 billion, sources added.

Earlier, sources said that Pakistan government will likely end tax exemptions in the FY2024-25 budget on IMF’s demand.

The government is also considering imposing a sales tax on tractors and pesticides, potentially leading to price hikes for these essential agricultural products.

Currently, under the Sixth Schedule of the Sales Tax Act, pesticides and their active ingredients registered by the Department of Plant Protection are exempt from sales tax.

Tractors, including road tractors for semi-trailers, are also zero-rated for sales tax. However, budget planners are discussing the removal of these exemptions and introducing a lower rate of sales tax on both tractors and pesticides in the upcoming fiscal year.

This could significantly impact farmers, increasing the cost of agricultural equipment and pesticides and potentially leading to a considerable burden on those who rely on these products.

Commercial importers are likely to be slapped with withhold tax in the upcoming budget, which is expected to generate Rs30bln additional in taxes.

The International Monetary Fund (IMF) urged Islamabad for “strong cost-side reforms” for restoring the viability of Pakistan’s energy sector.

 
PM forms cabinet committee on PSDP projects

Prime Minister Shehbaz Sharif on Wednesday formed a cabinet committee under chairmanship of the planning minister on the Public Sector Development Programme (PSDP) and made a third-party evaluation of all major national development projects mandatory.

He stressed the need for cooperation between the federation and the provinces for the revival of the economy, and directed the federal ministers to seek permanent resolution to the financial, economic and other issues of Sindh.

According to a press release issued by the Prime Minister Office Media Wing, Shehbaz chaired a meeting on the matters related to the Planning Ministry and Public Private Partnership Authority (PPPA). During the meeting, he ordered all the ministries to submit proposals for public-private partnership projects.

Shehbaz directed for initiating such PSDP projects that could ensure sustainable development in the country. He also underlined the significance of third-part validation of all the mega national development projects.

The prime minister, according to the press release, observed that increase in the revenue collection would make enough funds available for development projects. He stressed the need for harmonising the federal PSDP and the provincial annual development programmes.

For that, the prime minister directed for constituting a cabinet committee led by the planning minister on the development budget and the PSDP. The committee would furnish mechanism for the PSDP programmes through short-, medium- and long-term proposals.

The meeting was attended by Planning Minister Ahsan Iqbal, Finance Minister Muhammad Aurangzeb, Economic Affairs Minister Ahad Cheema, Petroleum Minister Musadik Malik, Planning Commission Deputy Chairman Jehanzeb Khan, and others.

Shehbaz also held a separate meeting with Sindh Chief Minister Syed Murad Ali Shah, which was attended by federal ministers Ahsan Iqbal, Ahad Cheema, Sardar Awais Khan Leghari and others, to discuss the issues regarding development of Sindh.

The prime minister directed for removal of issues and concerns of the Sindh government and expediting work on the ongoing federally-funded uplift projects in the province. He instructed the federal ministers to seek permanent resolution to the financial, economic and other issues of Sindh.

For the revival of economy, the prime minister told the meeting, cooperation among the federation and the provinces was imperative. He asked the ministries to include all the provinces in the consultations process for the preparation of the upcoming development budget.

SOURCE: EXPRESS TRIBUNE
 
Over Rs 927mln spent on parliament house renovation, NA told

In a written statement to the National Assembly, the interior ministry stated that Rs 108 million was spent on renovation in 2019-20.

Over Rs 171 million in 2020-21, Rs 286 million in 2021-22, Rs 302 million in 2022-23, and Rs 60 million was spent on the renovation in 2023-24.

It was reported in 2022, that Parliament House will get an additional amount of Rs5 billion in the fiscal year 2022-23.

The Parliament is comprised of the Upper House of the Parliament, Senate and Lower House- National Assembly- and it receive additional funds as compared to the previous fiscal year under the heads of salaries of the employees, expenditures, and allowances.

Last year, the then Senate Chairman Sadiq Sanjrani constituted a parliamentary committee for renaming the building ‘to a name that resonates with cultural heritage, national values and symbolizes the unity of the nation.

A parliamentary committee was formed by the Senate Chairman Sadiq Sanjrani to rename the Parliament House building.

 
Pakistan textile exports reach $13.68 billion in 10 months

Pakistan earned $ 13,683.251 million from exports of textile products during the first 10 months of the current financial year (2023-24), the Pakistan Bureau of Statistics (PBS) report said.

The exports of the textile products however, witnessed a slight decline of 0.19 percent during July-April (2023-24) when compared to the exports of $ 13,709.246 million during July-April (2022-23).

The textile commodities that witnessed positive trade growth included raw cotton, the exports of which grew by 319.91 percent, from $13.357 million last year to $15.944 million this year.

Likewise, the exports of cotton yarn increased by 32.83 percent, from $ 636.832 million last year to $845.923 million this year and bed wear by 1.82 percent, from $ 2,249.778 million to $ 2,290.796 million.

The export of towels also surged by 4.81 percent from $824.879 million to $864.547 million whereas the export of made-up articles up by 0.67 percent to $589.026 million from $585.102 million.

The textile commodities that witnessed negative growth include cotton cloth, exports of which declined by 7.53 percent, from $ 1,684.724 million to $ 1,557.909 million; cotton carded or combed by 15.93 percent, from $0.996 million to $0.837 million; yarn other than cotton yarn by 20.76 percent, from $36.302 million to $28.766 million, and knitwear by 3.92 percent, from $3,712.066 million to $3,566.624 million.

Likewise, the exports of tents, canvas and tarpaulin decreased by 16.52 percent, from $116.959 million to $97.632 million, ready-made garments by 0.57 percent, from $ 2,904.693 million to $ 2,888.177 million.

The exports of art, silk and synthetic textiles also decreased by 12.08 percent declining from $342.917 million to $301.496 million, whereas the exports of all other textile materials also went down by 0.87 percent, from $600.642 million to $595.432 million.

Meanwhile, on a year–on–year basis, the textile exports increased by 0.37 percent going up from $ 1,232.803 million in April 2023 to $ 1,237.316 million in April 2024.

On a month-on-month basis, the textile exports, however, decreased by 4.84 percent when compared to the exports of $1,300.288 million in March 2024.

 
PM orders tariff rationalisation for export industries

Prime Minister Shehbaz Sharif on Friday directed authorities concerned to immediately take steps for tariff rationalisation of export sector industries and ensure that electricity and gas were supplied to these industries at affordable rates.

Presiding over a meeting here to discuss provision of facilities to the industrial sector, the prime minister emphasised the importance of industrial development and growth of exports.

“The government will ensure supply of electricity and gas to industries at affordable rates,” a press release quoted the prime minister as saying.

PM Shehbaz said it is the priority of the government to provide facilities to all industries, especially those relating to the export sector.

He directed officials concerned to consult representatives of industries while taking steps for power and gas tariff rationalisation.

Meeting with Chinese firm

A delegation of Chinese firm MCC Tongsin Resources, led by Chairman Wang Jaichen, called on the prime minister on Friday.

The prime minister invited the firm to invest in Pakistan’s mining sector and manufacturing of export goods.

The prime minister assured the delegation that his government would extend facilities to the company from minerals’ exploration and processing to the export of goods.

He instructed federal ministers and officers to continue consultations with the Chinese firm and take the Balochistan chief minister, provincial departments and other stakeholders onboard.

The delegation reposed trust in the prime minister’s leadership and expressed interest in enhancing their investment in Pakistan’s mining and mineral sectors.

The delegation briefed PM Shehbaz about construction of a mineral park in Pakistan and their future investment plans.

The prime minister welcomed the Chinese firm and highlighted the priority steps taken by his government for promoting foreign investment in the country.

Business-friendly policies

The prime minister told a delegation of beverages companies who called on him here on Friday that his government’s business-friendly policies are bearing fruit.

The prime minister said the government is giving maximum support to foreign investors and business community to help them create employment opportunities, boost exports and contribute to the country’s economic development.

The delegation appreciated the government’s pro-business policies.

They told the prime minister that 25 plants of international beverages firms are operating in Pakistan and they have employed around 130,000 workers.

Apprising the prime minister of their largest recycling system, the delegation said the beverage firms are contributing to the national exchequer through huge amount of taxes.

PM Shehbaz urged the companies to play their productive role under their Corporate Social Responsibility.

He also instructed officials to hold consultations on the companies’ proposals and resolve their issues at the earliest.

Child stunting

The prime minister chaired a meeting on child stunting issue on Friday and called for launching a nationwide programme, in coordination with the provincial governments, to overcome this challenge.

He also called for making a comprehensive plan to protect children against all fatal diseases.

He said the federal government, in collaboration with the provincial governments, would take priority measures for better child growth to achieve the country’s bright future. Similarly, he said, a nationwide awareness campaign is also essential to tackle the problem of child stunting.

He thanked international experts for participating in the meeting which featured presentation of statistics on children’s growth by the World Bank.

SOURCE: DAWN
 
Political instability won’t bring economic stabilization: Mushahid

Talking to media here Mushahid Hussain, a former senator, said that the absence of political stability will hinder the investment from abroad.

He urged for a consensus in all political forces for the sake of political stability in the country.

Mushahid Sayed said that when Nawaz Sharif was jailed on October 12, 1999, Bill Clinton was president of the United States. Clinton said his presidential term will come to an end on January 20, 2001. He said,” I want release of Nawaz Sharif from jail before the end of my presidential tenure”.

“Nawaz Sharif was sent to Saudi Arabia in a royal aircraft on December 10, 2000,” Mushahid said.

He said, “Biden will going to exit on November 05 and Trump is coming”. “Before a telephone call from outside, we ourselves should take decision and release all political prisoners”, he urged.

 
PM Shehbaz departs for UAE on one-day visit

Prime Miniter Shehbaz Sharif departed for a one-day official visit to the United Arab Emirates (UAE) on Thursday, his first since coming to power after the February 8 polls.

The premier is accompanied by a high-level delegation comprising key ministers of the cabinet including Deputy PM Ishaq Dar, Minister for Defense Khawaja Asif, Minister for Commerce Jam Kamal Khan, Minister for Information and Broadcasting Attaullah Tarar, and a special assistant Tariq Fatemi.

During the visit, the premier is expected to meet the President of the UAE and Ruler of Abu Dhabi Sheikh Mohamed bin Zayed Al Nahyan to discuss bilateral relations, with a special focus on trade and investment.

Shehbaz is also expected to convene meetings with other prominent Emirati dignitaries, business leaders, and heads of financial institutions, said the statement from Prime Minister's Office (PMO).

The government is eyeing billions of dollars investment from Gulf countries particularly from Saudi Arabia and UAE to shore up the country’s foreign reserves and spur industrial growth.

The civil-military led Special Investment Facilitation Council (SIFC) was established during the first term of Shehbaz government. The council is meant to offer one window operation to foreign investors.

The SIFC has since then identified several potential areas for Saudi and UAE investors. The government is offering lucrative returns to Arab investors in the fields of agriculture, mines and minerals, energy and other sectors.

SOURCE: EXPRESS TRIBUNE
 

UAE commits $10bln investment to bolster Pakistan's economy​


A sigh of relief for the crippling economy, the United Arab Emirates (UAE) has committed to invest an additional $10 billion in Pakistan.

The announcement was made following a high-level meeting between Prime Minister Shehbaz Sharif accompanied by the Deputy Prime Minister/Foreign Minister Muhammad Ishaq Dar, Minister for Commerce Jam Kamal Khan, Minister for Defence Khawaja Muhammad Asif and Special Assistant to Prime Minister Syed Tariq Fatemi. , and the UAE President, Sheikh Mohammed bin Zayed Al Nahyan, on Thursday in Abu Dhabi.

During the one-on-one discussion, which took place after a round table conference, both leaders engaged in comprehensive talks on matters of mutual interest, exploring investment opportunities in Pakistan, and deliberating on global and regional issues.

Both leaders exchanged views on other issues of mutual interest including regional and global developments. The Prime Minister reiterated his invitation to the UAE President for an official visit to Pakistan. The UAE President accepted the invitation.

The UAE's investment promise follows Saudi Arabia's pledge to expedite $5 billion in investment, as Pakistan seeks to strengthen economic ties with Gulf states.

The country's foreign exchange reserves stand at $14.5 billion, and the government is working to secure a fresh IMF programme to support economic stability.

Pakistan's economy has stabilized after completing the last IMF programme, with inflation coming down to 17% in April from a record high of 38% last May.

However, the country still faces challenges including a high fiscal shortfall and stagnating growth, which is expected to be around 2% this year.

The government is seeking at least $6 billion in additional financing from the IMF under the Resilience and Sustainability Trust, but the Fund has conditionalized the next bailout package on the presentation of an aligned budget and parliamentary approval.

 
Commitments, promises, MoU’s but nothing tangible ever happens. Lets see the investment with our own eyes.
 

In meeting with PM, PPP team seeks relief for common man in budget​


Pakistan Peoples Party (PPP) placed a list of demands before Prime Minister Shehbaz Sharif during the meeting of a high-level delegation of the party which met him here on Sunday.

The delegation included former Prime Minister Raja Pervaiz Ashraf, Syed Naveed Qamar, Sindh Chief Minister Murad Ali Shah and Sherry Rehman.

During the meeting, they discussed the overall political situation of the country and deliberated on the budget for the fiscal year 2024-25.

According to sources close to PPP, the party leaders gave a list of demands including 20 to 25 percent increase in salaries of the government employees in the upcoming budget.

The PPP delegation also handed over a list of new development projects in Sindh to Federal Minister for Planning and Development who was also present in the meeting.

The delegation also shared proposals related to the upcoming budget aimed at providing relief to common man.

Talking to delegation, the prime minister expressed the desire that PPP should join the federal cabinet, on which the PPP leaders said such decision would be made by Bilawal Bhutto and President Zardari. PPP assured the government of its cooperation in passing the federal budget from the parliament.

The PPP delegation also asked for release of funds for the ongoing development projects in Sindh for their timely completion.

Deputy Prime Minister and Foreign Minister Ishaq Dar, Federal Minister for Planning Ahsan Iqbal, Adviser to Prime Minister on Political Affairs Rana Sanaullah and Federal Minister for Law and Justice Azam Nazeer Tarar were also present on this occasion.

 
Shehbaz Sharif has announced a holiday tomorrow on 28th May for commemorating 9th May.
 

Minister vows to facilitate foreign investors​

Federal Minister for Commerce Jam Kamal Khan has emphasised that Pakistan has always been an ideal destination for foreign investors and the government is doing its best to facilitate large-scale investors at all levels.

“Today’s event is a testimony of the government’s extended support under the premiership of PM Muhammad Shehbaz Sharif to such entities,” the minister said at the launch of Pakistan Tobacco Company (PTC)’s “Made in Pakistan 3.0” initiative on Monday.

The initiative, which will see the export of PTC’s modern oral tobacco-free nicotine pouches, Velo, to Japan, marks a significant milestone in the journey of innovation and economic contribution, which will potentially bring foreign exchange earnings of $100 million annually.

Kamal said the initiative not only exemplified PTC’s dedication to economic progress but also showcased Pakistan’s capability to produce high quality, innovative products for the global market.

Source: The Express Tribune
 
PM’s decision to sack 8 boards faces political pressure

Prime Minister Shehbaz Sharif’s plan to weed out political influence from the boards of eight power distribution companies has hit its first major roadblock as the government has hit the brakes on dismantling these boards after encountering pushback from various quarters.

The decision about the removal of the boards came to a halt days after the prime minister decided to sack the boards on the allegations of causing a colossal loss of Rs589 billion due to “alarming indicators of bad governance and poor performance”.

These boards had been appointed during the tenure of the Pakistan Democratic Movement (PDM).

The development came amid increasing load shedding particularly in areas that have high financial losses. The power minister said that “economic load shedding of up to 16 hours would continue in areas where the losses are 90% and more”.

The sources said that the decision to remove the directors of eight boards and replace them with new people has been halted for a while.

The prime minister had authorised the Power Division to seek the approval of the cabinet committee on state-owned enterprises (SOEs) to remove the existing directors and replace them with new ones. Subsequently, the cabinet committee last week endorsed Shehbaz Sharif’s decision.After the committee meeting, the finance ministry announced last week that the cabinet committee on SOEs sanctioned the Power Division’s proposal to appoint independent directors for specific electricity distribution companies, pending submission to the cabinet.

Sources told The Express Tribune that immediately after the decision was made public, the backers and the members of these boards started pressurising the government.

They also threatened to take the government to court on the grounds that the boards had been constituted for a period of three years and their tenures had statutory protection.

The government, while succumbing to the pressure, did not take the cabinet committee on SOEs recommendation to the federal cabinet last week for the final endorsement before issuing their termination notices, the sources said.

When contacted, Power Minister Sardar Awais Leghari said that the Power Division had withdrawn the summary from the cabinet committee on the SOEs and that a fresh summary would be resubmitted for approval.

Leghari said that there was a complete resolve to reconstitute these boards in a way that the mafias’ back is broken.

However, if the government does not take the matter to the finishing line, it will be a major setback for Prime Minister Shehbaz Sharif who had vowed to break the forces of the status quo.

Finance Minister Muhammad Aurangzeb has already informed the International Monetary Fund (IMF) that the government was in the process of replacing the boards of the power distribution companies.“We are 100% committed to (the reconstitution of the boards) and it will be done,” Attaullah Tarar, the federal minister for information and broadcasting, said while talking to The Express Tribune. Tarar said that there was no turning back on the issue.

The sources said that due to the threat of legal challenges, the government has now started making individual calls to the members of these boards to resign from their positions. They added only a few of them gave the affirmative reply while the overwhelming majority of them refused to resign.

There is a pause but the process has not been reversed and Prime Minister Shehbaz Sharif remains committed to it, according to a senior government official.

PM Shehbaz Sharif during his last tenure had formed these boards between July 2022 and November 2022, primarily based on coalition partner recommendations, resulting in appointments of politicians and their relatives.

The Power Division had informed the cabinet committee on SOEs that due to the dismal state of affairs, all ten government-owned power distribution companies would incur Rs589 billion in losses in this fiscal year.

The government blamed these boards accountable for “poor governance, performance, and service delivery”. The government said that it gave repeated reminders to these boards to improve their performance in which the “alarming indicators of bad governance, poor performance and non-satisfactory service delivery were constantly highlighted”.The government had decided to remove the independent directors of eight power distribution companies, including Faisalabad, Gujranwala, Lahore, Islamabad, Multan, Quetta, Peshawar, and Tribal Areas. It had also approved the new names, based on the board nomination committee headed by Power Minister Awais Leghari.

However, the board of Directors of IESCO reacted to the government’s decision to remove them.

The board members stated that the NEPRA Performance Evaluation Report for the fiscal year 2022-23 highlighted that IESCO consistently met its targets and often exceeded the performance indicators set by the regulator. They further claimed that the IESCO achieved a remarkable recovery rate of 106.32%, surpassing the 100% target, positively impacting fiscal health and distinguishing us from other DISCOs.

The members added that the IESCO had met the mandated 95% threshold for new connections within the specified time frames, showcasing our efficiency in service provision.

However, the power planning and monitoring company –the government entity monitoring boards’ performance – informed the IESCO chief executive that there were excessive transmission and distribution losses and a reduction in computed recovery and mobile meter reading was accurate by 99%, 1% less than the target.

Additionally, the government reported that approximately 4,191 electricity connections remain pending.

The sources said that there is now a possibility that the government will retain some of the existing IESCO board members, including Adnan Baig, due to their better performance compared to others, and may fill the already vacant positions.The government had accused the QESCO’s board for incurring the highest annual losses of Rs138 billion this fiscal year. The decision to replace PESCO’s board was taken due to Rs137 billion losses. TESCO caused Rs51 billion losses –the fifth highest losses of all. FESCO’s board was originally ousted over Rs17 billion in losses.

The decision to sack the GEPCO’s board was taken on the allegation of causing Rs12 billion in losses. MEPCO’s board has decided to be dismissed for Rs 38 billion in losses. LESCO’s board was removed for Rs43 billion in losses.

IESCO’s board was replaced due to Rs41 billion losses.

Load shedding

Meanwhile Prime Minister Shehbaz Sharif on Tuesday directed the authorities to minimise the ongoing load-shedding in different areas through better load management, according to a press statement issued by the PM’s Office.

The premier asked the provincial governments, law enforcement agencies and other departments to extend their support in the anti-power theft drive in the national interest and for the country’s progress, it added.

Power Minister Sardar Awais Leghari said that around 16 hours a day load shedding was going on in the areas where the feeder losses were 90% or more. He said that it was an “economic load shedding” and it would continue until there was an improvement in the recovery of the bills.

Due to high losses, there is also load shedding of over 18 hours a day in Fort Munro – a part of the minister’s constituency that he had won with a majority of 8,000 votes in the February 8 elections.

EXPRESS TRIBUNE
 
Inflation is expected to hover between 13.5 to 14.5 per cent in May and to ease further to 12.5 to 13.5pc by June, according to a monthly economic update from the finance ministry on Wednesday

The country has been beset by inflation above 20pc since May 2022, registering a high of 38pc in May 2023, as it navigated reforms as part of an International Monetary Fund’s bailout programme.

However, inflation has slowed over the past few months. The consumer price index for April slowed to 17.3pc from a year earlier, the lowest reading in nearly two years and below the finance ministry’s projections for the month.

“The inflation outlook for May 2024 continues on a downward trajectory, attributed to elevated inflation levels previous year and improvements in domestic supply chain of perishable items, staple food like wheat and reduction in transportation costs,” the report said.

It added that going forward, the economy will gain momentum owing to favourable external and domestic economic conditions.

Source: Dawn News
 
Govt to present budget 2024-25 on June 10: sources

The budget was originally due to be presented on June 7 but was delayed because of Prime Minister Shehbaz Sharif’s visit to Beijing from June 4 to June 8, said sources.

Prime Minister Shehbaz Sharif will visit China from June 4 to 8 at the invitation of President Xi Jinping, Ministry of Foreign Affairs (MoFA) said on Friday.

During the three-segment trip, the prime minister will visit the cities of Xi’an and Shenzhen, besides Beijing, the Foreign Office spokesperson Mumtaz Zahra Baloch announced at her weekly press briefing.

She said that Shehbaz Sharif would meet President Xi Jinping and hold delegation-level talks with Premier Li Qiang in Beijing.

He will also hold meetings with Chairman of Standing Committee of the National People’s Congress Zhao Leji and heads of key government departments.

Moreover, inflation is likely to increase in the 2024-25 federal budget as the International Monetary Fund (IMF) has ‘asked’ Pakistan to reduce sales exemptions further.

As per details, the prices of milk, tea, sugar, rice, flour, and packed milk are likely to increase in the budget 2024-25 as the international lender has asked Islamabad further to reduce the sales tax exemptions for fresh loan.

The IMF has demanded imposing a 5-10% sales tax on the zero-rated sales tax sector, the sources said and added that pressure is being asserted to end tax exemptions in FATA and PATA by June 30.

According to budget proposals for the FY2024-25, Pakistan is likely to end exemption on sales and income tax, phase-wise.

 

Rs1.221tr development budget proposed​


ISLAMABAD: Conceding severe financial constraints and cutting down on the development funding under the IMF programme, the Annual Plan Coordination Committee (APCC) has recommended Rs1,221 billion for development programme at the federal level for the financial year 2024-25.

The government has abolished discretionary funding for parliamentarians under Sustainable Development Goals (SDGs) and did not allocate any amount in the next budget. The government stopped funding for Earthquake Reconstruction & Rehabilitation Authority (ERRA) for the next budget.

Utilisation of the Public Sector Development Programme (PSDP) faced major cut as utilisation of development funds stood at just Rs379 billion against allocation of Rs950 billion for the current fiscal year 2023-24.

The APCC met Deputy Chairman Planning Commission Dr Mohammad Jehanzeb Khan in the chair on Friday in order to approve PSDP at Rs1221 billion. The APCC envisaged GDP growth rate of 3.6 per cent and inflation at 12 per cent.

The provincial annual development plans of Punjab and Sindh were proposed at Rs700 billion and Rs763.7 billion, respectively. There is no indication of ADPs for KP, Balochistan, GB and AJK for the next budget.

Out of proposed allocation of Rs1221 billion PSDP, the government allocated Rs877 billion for infrastructure for the next budget against allocated amount of Rs553 billion in the last budget 2023-24; social sector budget was reduced to Rs83 billion in the coming budget against allocated funds of Rs203 billion in the outgoing fiscal year, and funding for special areas such as AJK and GB were allocated at Rs51 billion. The allocation for merged districts was kept at Rs57 billion. The allocation for Science & Information Technology was jacked up to Rs102 billion for coming budget against allocation of Rs42 billion. The allocation for governance, production sectors, food and agriculture and industries were increased.

The APCC was told that Pakistan’s economy has been facing multiple challenges including severe fiscal indiscipline and deficits in the past few years. Owing to increased development needs of the country, PSDP’s throw-forward has increased from Rs3 trillion in 2013-14 to around Rs9.8 trillion, whereas the size of PSDP allocation and expenditure remained stagnant at an average of Rs630 billion during the same period.

The size of PSDP in term of per cent of GDP shrunk over time and reduced from 1.7pc of GDP in 2013 to 0.9pc of GDP in 2023-24. The size of PSDP is also decreasing in real term due to inflation and depreciation of Pak Rupee. “Moreover, due to IMF programme, primary deficit has been managed with cut on PSDP which has worsen the development investment in the country,” the working paper of the APCC stated.

In order to achieve primary surplus under the IMF programme, the APCC was informed that the Finance Division issued a back loaded release strategy at the rate of 15pc, 20pc, 25pc and 40pc contrary to NEC approved release strategy for quarters Q1, Q2, Q3 and Q4, respectively.

As per release strategy, out of total releases of Rs131 billion in first quarter of FY2023-24, Rs61.26 billion (46.7pc of first quarter releases) were earmarked to SDGs schemes, leaving behind only Rs69.74 billion (53.2pc of the first quarter releases) for allocation to all remaining PSDP projects. Further, Rs20 billion diverted to non-development side during the year and 20pc (Rs184 billion) cut was made in releases of 4th quarter to maintain the primary budget balance, thereby compressing the size of PSDP 2023-24 to Rs746 billion. Further, Rs29 billion were deducted at source by the Finance Division on account of CDL recovery. Thus, the actual/effective size of PSDP was reduced to Rs717 billion.

There are severe challenges faced for formulation of Ministry/Division wise Indicative Budget Ceilings (IBCs) for PSDP 2024-25 including Rs186 billion liability rollover from 2023-24 due to 20pc cut in size of PSDP 2023-24; Thin spreading of PSDP allocation and Rising throw-forward; Additional demands of important projects over and above IBCs; Huge demand for rupee cover against FEC/FA component; Increasing number of new schemes particularly of DDWP level; Needs of post-flood 2022 Rehabilitation (4RF) and 5Es initiatives.

A number of federally funded projects under the sponsorship of Finance Division are being executed by the provinces. Funds to such schemes are generally released to Provincial Account No. 1. This results into delay in transferring the released funds to project authorities and reporting of financial progress about a specific project. During the PSDP reviews, it has been observed that funds are not timely released by provincial Finance Departments to project authorities. In this regard, the Finance Division/CGA on recommendations of Planning Commission devised the procedure of Asaan Assignment Account 2020 which inter-alia, stipulates release of funds to federally funded projects being executed by provinces may be made through Assignment Account to ensure uninterrupted flow of funds to project authorities. The procedure should be fully complied with for all the provincially executed projects under the Finance Division.

 

Pakistan, China sign agreements to facilitate industrial cooperation​


Pakistan’s state-owned bank and the China-Pakistan International Silk Road Industry Investment Management Company Limited this week signed an agreement to facilitate investment in key projects to promote industrial cooperation and establish special economic zones, state-run media reported on Sunday.

Islamabad views Beijing as one of its most reliable foreign partners in recent years, which has invested over $65 billion in energy and infrastructure projects in Pakistan as part of the China-Pakistan Economic Corridor (CPEC).

The development takes place as Pakistan eyes foreign investment in key economic sectors whilst it grapples with a macroeconomic crisis. Prime Minister Shehbaz Sharif has repeatedly said his government wants to break the “begging bowl” and is targeting mutually beneficial economic partnerships with allies.

The agreement between the National Bank of Pakistan (NBP) and China-Pakistan International Silk Road Industry Investment Management Company Limited was signed on Saturday at the Pakistan embassy in Beijing in the presence of Aslam Chaudhry, Pakistan’s minister of economic affairs.

“He [Chaudhry] informed that special economic zones are being established across Pakistan where the Chinese enterprises could relocate their industry and export products to different countries taking advantage of preferential agreements signed by Pakistan with various countries,” state broadcaster Radio Pakistan reported.

The minister said Pakistan, with a population of over 225 million people, is itself a “big market” and that Chinese companies could benefit from it.

Chaudhry urged Pakistan urged Chinese entrepreneurs to set up their industrial units in Pakistan.

“He opined that the MoU would help the Chinese companies for investment in different projects and promote industrial cooperation between the two countries,” Radio Pakistan said.

Pakistan has been making efforts to attract foreign investment since last year when it set up the Special Investment Facilitation Center (SIFC). The hybrid civil and government body was formed last year to attract investment in key economic sectors including tourism, agriculture, minerals and others.

 

Inflation slows to 11.8pc in May, lowest in 30 months​

Pakistan’s consumer price index (CPI) in May rose 11.8pc from a year earlier, data from the Pakistan Bureau of Statistics (PBS) showed on Monday, the lowest reading in 30 months and below the finance ministry’s projections.

The lowest reading comes a week before the central bank meets to review the key rate which has remained at a historic high of 22pc for seven straight policy meetings.

Pakistan has been beset by inflation above 20pc since May 2022. Last year in May, inflation jumped as high as 38pc as the country navigated reforms as part of an International Monetary Fund (IMF) bailout programme. However, inflation has since slowed down.

Month-on-month consumer prices fell 3.2pc, the biggest such drop in more than two years.

In its monthly economic report released last week, Pakistan’s finance ministry said it expected inflation to hover between 13.5pc and 14.5pc in May and ease to 12.5pc to 13.5pc by June 2024.

“The inflation outlook for May 2024 continues on a downward trajectory, attributed to elevated inflation levels (in the) previous year and improvements in (the) domestic supply chain of perishable items, staple food like wheat and (a) reduction in transportation costs,” the report said.

The actual readings have come in even lower due to a sharper dip in food prices, said Amreen Soorani, head of research at JS Global Capital.

 
PM Shehbaz Sharif departs for China on five-day visit to strengthen bilateral ties

Prime Minister Shehbaz Sharif set off on Tuesday for a five-day official visit to Beijing China, starting from June 4 to June 8.

The premier was invited by China's Prime Minister Li Qiang, marking his first visit since assuming office this year.

Discussions with Chinese leaders are expected during the meeting, including President Xi Jinping, Prime Minister Li Qiang, and Chairman of the Standing Committee of the National People's Congress Zhao Leji to jointly outline a framework for enhancing bilateral ties.

The premier is also scheduled to speak at the Business-to-Business Forum, where representatives from 79 Pakistani companies will meet with Chinese counterparts. The visit aims to advance the evergreen strategic cooperative partnership between the two nations and to take new steps in a shared future.

In all those years, both countries have engaged in high-level exchanges, productive cooperation on the China-Pakistan Economic Corridor (CPEC), and maintained strong coordination on international and regional matters.

Under the second phase of CPEC, Pakistan and China will implement the key consensus reached by their leaders, which includes strengthening development strategies and policy coordination. They will also accelerate progress on mega projects such as the "ML-1" upgrade, Gwadar Port, and the Karakoram Highway Phase II renovation.

The BRI project has brought a total of $25.4 billion in direct investment, 236,000 jobs, 510 kilometers of highways, over 8,000 megawatts of electricity, and an 886-kilometer core transmission network, that has strengthened Pakistan's economic and social development.

Earlier, the Chinese envoy highlighted that as a landmark project of the Belt and Road international cooperation, batch after batch of schemes had been launched, completed as well, and put into operation under the framework of CPEC.

He continued that these schemes had resulted in $25.4 billion in direct investment, 236,000 jobs, 510 kilometers of highway, more than 8,000 MW of electricity, and 886 kilometers of core power transmission network.

The visit seeks to bolster collaboration in industry, agriculture, mining, energy, and IT while promoting trade liberalization.

Shehbaz Sharif to hold B2B meetings in China

Last week, the PM presided over a meeting to discuss the development of thorough plans to conduct productive business-to-business meetings between the two countries.

He directed the relevant authorities to create strategies aimed at attracting Chinese industries to establish their operations in Pakistan, assuring them of the government's complete support and facilitation.

The PM urged Pakistan’s ambassador to China to provide comprehensive assistance to the Pakistani business delegation during their visit.

DAWN
 
PM Shehbaz lauds 'impressive economic growth' of China's Guangdong

Prime Minister Shehbaz Sharif on Tuesday noted that the deep-rooted ties between Pakistan and China were characterised by frequent engagement and dialogue at the leadership level, people-to-people contacts, cultural and educational exchanges.

Earlier today, PM Shehbaz landed in China’s Shenzhen on the first leg of his official visit to the country with an aim to advance bilateral trade and economic ties with Beijing and attract Chinese investors via business-to-business (B2B) projects.

The prime minister met Shenzhen Municipal Committee Party Secretary and Deputy Party Secretary of Guangdong Provincial Committee in Shenzhen Meng Fanli, the PM Office said in a statement.

The prime minister lauded the impressive economic growth and exemplary innovative spirit of Guangdong province and also termed Shenzhen a trade gateway for China’s business linkages with Pakistan.

Reaffirming 'the time-honoured All-Weather Strategic Cooperative Partnership between Pakistan and China,' the two sides agreed on the need to explore opportunities for increased cooperation between Pakistan and the Guangdong province particularly under China-Pakistan Economic Corridor (CPEC).

PM Shehbaz and party secretary Meng underlined the importance of robust linkages and exchanges between scientists, innovators and businessmen to harness the true potential for enhanced partnership in science and technology, innovation and trade and economic cooperation.

They also agreed that Pakistan-China Business Conference being held on Wednesday (June 5) could make an important contribution in that regard.

The prime minister also attended a banquet hosted by Meng Fanli.


Geo TV
 

PM assures resource availability, support for foreign investors​


Prime Minister Shehbaz Sharif assuring resource availability pledged to provide steadfast support for foreign investors.

The premier attended the Pakistan China Business Forum in Shenzhen on Wednesday and lauded China's developmental achievements as exemplary during his visit to the brotherly country.

Speaking at the forum, PM Shehbaz stressed the importance of bolstering the relationship between the two nations and fostering increased investment.

He mentioned the establishment of a business council to facilitate investments in Pakistan and reiterated the government's commitment to providing necessary facilities to foreign investors and businessmen.

Highlighting Pakistan's abundant resources, the PM underscored the potential for economic growth.

Regarding security concerns, Sharif expressed condolences over the tragic incident where five Chinese citizens lost their lives to terrorism in Besham.

He affirmed China's status as a steadfast friend and partner to Pakistan, offering support in times of need, be it during conflicts, natural disasters, or on global platforms.

The PM assured heightened security measures for Chinese citizens working in Pakistan, promising to prioritize their safety.

During a meeting with Zhu Zhaojiang, founder and chairman of Transsion Holdings, the premier welcomed the company's interest in expanding investments in Pakistan's mobile manufacturing sector and exploring opportunities in electric bikes, modern agriculture, and fintech.

Shehbaz Sharif directed relevant authorities to collaborate with Transsion Holdings to devise an action plan.

Finance Minister Muhammad Aurangzeb addressed the issue of inflation, stating that government measures have led to positive economic indicators, including a reduction in the current account deficit.

Foreign Minister and Deputy Prime Minister Ishaq Dar emphasized Pakistan's investment potential, particularly in IT and mineral resources, while Pakistani Ambassador to China Khalil Hashmi highlighted Shenzhen's progress as a model for cooperation between the two nations.

 
Greeted by a deputy mayor and this guy, Sharif, was gripping his arm as if meeting his rock star.

Incompetent buffoon who can't string together 5 sentences in Urdu properly
 
This guy is worse than a Department Store Floor supervisor, he has no plan no agenda no authority and no moral value
 
Prime Minister’s Visit to China -Opening New Business Horizons for Pakistani Businesses

Prime Minister Muhmmad Shahbaz Sharif met with Mr. Zhu Zhaojiang, founder and chairman of the Chinese company Transsion Holdings, in Shenzhen.

During the meeting, interest was expressed in investment opportunities in Transsion Holdings’ mobile manufacturing unit in Pakistan and investment in four sectors in Pakistan: mobile phone production, electric bikes, modern agriculture, and fintech.

On the occasion, Prime Minister said that the government of Pakistan continues to ensure facilities for foreign investors and business personalities. He invited Transsion Holdings to produce goods locally in Pakistan and export them abroad.

During the meeting, the Chairman of Transsion Holdings briefed the Prime Minister on the company’s current operations in Pakistan, its global exports, and further investment projects in Pakistan.

He informed the Prime Minister that the company already has a unit established in Pakistan for the production of mobile phones, providing employment to over 5,000 Pakistanis daily.

The company is keen on expanding its investment in mobile phone production in Pakistan, which will increase their exports from Pakistan after mobile phone production.

Federal ministers Ishaq Dar, Khawaja Muhammad Asif, Ahsan Iqbal, Muhammad Orangzeb, Abdul Aleem Khan, Jam Kamal, Attaullah Tarar, and Minister of State for Information Technology and Telecommunication Shazia Fatima Khawaja also participated in the meeting.

Renowned business figures from the Pakistan Mobile Phone industry & Transsion Holding partners in Pakistan Amir Allawala, CEO of Tecno Transsion Electronics Mr. Muzzafar Paracha, CEO of Airlink Communicationsand Mr. Zeeshan Mianoor, CEO of Inovi Telecom were also present in the meeting.

The presence of Pakistani mobile phone industry icons in the meeting underscores the momentum towards fostering the growth of Pakistan’s emerging mobile phone industry. It’s anticipated that significant initiatives will be discussed to boost local manufacturing and export within the sector with the guardianship of China.

 
PM Shehbaz to ‘engage’ with Chinese banks for $600m loan

According to sources, the prime minister will engage in talks with Commercial Bank of China and Industrial and Commercial Bank of China, to secure a $600 million loan.

Sources said that previous negotiations with the banks had failed due to stringent conditions set by the Chinese banks.

Pakistan is seeking to relax the tough conditions set by the Chinese banks, including the payment schedule for Chinese IPPs and an interest rate of up to 8%, sources added.

The government has been in talks with the Chinese banks since July 2023 to secure the loan. The loan is now being sought for the next fiscal year, and the negotiations aim to finalize the $600 million loan agreement with favorable terms for Pakistan.

It is pertinent to mention here that Prime Minister Shehbaz Sharif is in China and will spend a busy day in Beijing today.

The Prime Minister will address Pakistan-China Friendship and Business Reception. The Prime Minister will meet the heads of China International Development Agency, China Exim Bank, China Power, China Energy, China Road and Bridge Corporation, China Construction and Communication Corporation.

 
Pakistan, China sign 23 MoUs for cooperation in industry, energy, other sectors
Pakistan and China on Friday signed 23 Memorandums of Understanding (MoUs) and agreements to deepen bilateral cooperation in multiple areas including transport infrastructure, industry, energy, agriculture, media, health, water, socioeconomic development, and other areas of mutual interest.

The documents were signed after Prime Minister Shehbaz Sharif and his Chinese counterpart Li Qiang held delegation-level talks wherein they reaffirmed that the Pakistan-China Strategic Cooperative Partnership was characterized by mutual trust, shared principles, and strategic governance.

Prime Minister Shehbaz Sharif and Chinese Premier Li Qiang witnessed the ceremony as representatives from both sides signed the documents.

Pakistan and China signed agreements for the co-production of films, and news exchange and cooperation.

The MoUs were signed between Pakistan Television Corporation and China Media Group; on the feasibility studies of DI Khan-Zhob National Highway 50, Muzaffarabad-Mirpur-Mangla Expressway and Karachi-Hyderabad Motorway 9; and construction of a tunnel at Babusar on Mansehra-Chilas National Highway.

Both sides signed a document on modalities for third party participation in China-Pakistan Economic Corridor; MoUs on re-alignment of KKH, agricultural cooperation, and anti-monopoly cooperation; an action plan on implementation of 2022 Industrial Cooperation Framework; a protocol on surveying, mapping and geo-information in scientific and technical fields; and a study on the establishment of an effective energy management system.

Two countries signed Letters of Intent for workshops on capacity building on governance, and industrial park development; and
handing over certificate for Pak-China Friendship Hospital in Gwadar and Desalination Plant in Gwadar.

Both sides also signed Letters of Exchange for the reconstruction of primary schools in Sindh; the Lady Health Workers Workstations project; and Junaco Cultivation Demonstration and Projection project; besides an endorsement of the agreement reached in the 7th Joint Working Group to enhance cooperation under CPEC.

Since his arrival in China on a five-day visit, the prime minister has met with Chinese investors and businesspersons to explore investment opportunities in Pakistan.”

In the meeting and events including a Business Forum in Shenzhen, he encouraged the Chinese companies to invest and develop joint ventures.

Several MoUs have also been signed with Chinese companies in economy, green energy, textiles, and manufacturing.

Before he departed for a five-day visit to China, the prime minister had told the Chinese media in an interview that he would engage with Chinese business leaders to secure investments and yield dividends mutually beneficial for companies on both sides.

“We are coming with serious plans. We will engage with you and return to Pakistan with great dividends that will benefit Chinese and Pakistani companies and the two countries will have their relations strengthened and become much higher than the Himalayas or any other highest peaks and deeper than the deepest oceans,” he remarked.

 

Largest revenue target set in FY 2024-25 budget with extra tax measures​


Pakistan’s budget history’s largest revenue target has been fixed for tax collection in Fiscal Year 2024-25 budget.

The revenue collection target for the year has been fixed at 12,900 billion rupees with an increase of 3,440 billion in the upcoming budget.

Imposition of new taxes has been proposed in the budget for FY 2024-25 to generate 2,000 billion rupees additional revenues.

Initially six percent sales tax being proposed on petroleum products. Moreover, a budget proposal has been under the hammer to abolish all sales tax exemptions. An additional 550 billion rupees revenues are expected with the withdrawal of sales tax exemptions.

Moreover, to achieve the target of tax revenues, one percent hike in the sales tax rate is expected to generate around additional 100 billion rupees revenues. This one percent hike can be slapped over around 7,000 items, sources said.

Sales tax also likely to be imposed over the packed milk.

It is apprehended that these budgetary measures could unleash hike in inflation in the country.

 
The State Bank of Pakistan (SBP) announced on Monday that it had decided to cut the interest rate by 150 basis points (bps) to 20.5 per cent

The decision to cut the key rate to 20.5pc comes ahead of the annual budget and a week after data showed inflation slowed to a 30-month low of 11.8pc in May.

In a statement, the SBP said the central bank’s Monetary Policy Committee (MPC) had met earlier today and reviewed the current economic developments, highlighting “better than anticipated” decline in inflation for May.

Regarding the decision, the committee noted that “underlying inflationary pressures are also subsiding amidst tight monetary policy stance, supported by fiscal consolidation”.

At the same time, the MPC highlighted “some upside risks to the near-term inflation outlook associated with the upcoming budgetary measures and uncertainty regarding future energy price adjustments”.

Regarding the key developments, the committee said that real GDP growth remained moderate at 2.4pc “with subdued recovery in industry and services partially offsetting the strong growth in agriculture”.

“Second, reduction in the current account deficit has helped improve the foreign exchange (FX) reserves to around $9 billion despite large debt repayments and weak official inflows,” it added.

The SBP noted that “the real interest rate still remains significantly positive, which is important to continue guiding inflation to the medium-term target of 5–7pc”.

“The government has also approached the IMF for an Extended Fund Facility programme, which is likely to unlock financial inflows that will help in further build-up of FX buffers,” it said.

The decision for a rate cut comes in defying expectations. In a Topline Security survey, 43pc of participants expected the policy rate to decline by 100bps. While in a Bloomberg survey, 63pc of the participants expected a 100bps decline in key rate.

Source: Dawn News
 
Pakistan to present Rs18 trillion budget on Wednesday

The Pakistan Muslim League-Nawaz (PML-N) led federal government will present its first growth-oriented budget for the fiscal year 2024-25, with an estimated outlay of over Rs18 trillion, on June 12 (Wednesday).

Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb will present the budget on the National Assembly floor.


 
Rs18 trillion federal budget today

Finance Minister Muhammad Aurangzeb is set to unveil Rs18 trillion federal budget for the fiscal year 2024-25 in the National Assembly on Wednesday (today), which would focus on fiscal consolidation to contain budget deficit, official sources said on Tuesday.

According to sources, the main targets of the budget would be mitigating people’s problems, transforming agriculture sector, promoting information technology (IT), boosting exports, promoting industrial growth and bolstering businesses.

The budget was formulated while considering the existing challenges facing the economy on domestic and international fronts, the sources said, adding that the government was firmly committed to presenting a pro-people, business-friendly and progressive federal budget.

On the revenue side, according to the sources, the government was likely to set the revenue collection target at over Rs12 trillion for the fiscal year 2024-25, given a robust revenues growth during the outgoing fiscal year, 2023-24.

“The budget is being prepared in close coordination among all departments and ministries, involved in budget-related events, including the presentation of the budget in the parliament a day after launching the Economic Survey,” a source said.

“It will pursue policies aimed at fiscal consolidation to contain budget deficit. In addition revenue mobilisation, economic stabilisation, reduction in non-development expenditures, job creation would be the main features of the budget,” the source added.

EXPRESS TRIBUNE
 
Is Pakistan’s crisis-ridden economy finally recovering?

The Pakistani government will present its annual budget on Wednesday, seeking to balance domestic commitments to the country’s 240 million people and demands of fiscal prudence from the International Monetary Fund (IMF) – a key source of loans.

Aiming to increase its gross domestic product (GDP) growth rate to more than 3.5 percent from 2.38 percent in the outgoing fiscal year, the country is looking to revive its economy, which has faced a nearly two-year slump following political volatility.

Pakistani authorities have held multiple meetings with the IMF recently. Prime Minister Shehbaz Sharif, who came to power as the head of a patchwork coalition after the February elections, has been at the forefront of these efforts.

Sharif recently travelled to Saudi Arabia, the United Arab Emirates, and China – countries considered Pakistan’s closest allies and key to supporting its economy – to discuss opportunities for driving foreign direct investment in Pakistan.

But is Pakistan’s economy showing signs of revival? Are the government’s measures helping everyday people? And what do analysts think the next budget should prioritise?

Is Pakistan’s economy truly showing signs of revival?

Latest figures from the country’s central bank and international bodies like the IMF paint a cautiously optimistic economic forecast.

Pakistan’s inflation, which had skyrocketed to 38 percent a year ago in May 2023, has slowed down to 11.8 percent over the past 12 months, as reported by Pakistan’s Bureau of Statistics. A kilogram (2.2 pounds) of wheat, which would cost more than 130 rupees ($0.47) last year in May, is down to 102 rupees ($0.37) this year.

Fuel prices have also shown a declining trend, down from 288 rupees ($1.03) per litre (0.26 gallons) in May 2023, to 268 rupees ($0.96) per litre at present.

The country’s foreign exchange reserves with the central bank, which had dipped as low as $2.9bn in February 2023 – enough to cover just three weeks of imports – have now improved to more than $9bn, roughly the average amount over the last six years.

Similarly, the Pakistani rupee, which had lost more than 60 percent of its value against the United States dollar in the past two years, has now somewhat stabilised at 280 rupees against one dollar.

The stock market has also shown a bullish trend, hitting its highest level of 75,000 points last month before slowing down.

The IMF, which completed a nine-month Stand-By Agreement programme with Pakistan in May worth $3bn, has also acknowledged improvements in the country’s macroeconomic conditions.

“Moderate growth has returned; external pressures have eased; and while still elevated, inflation has begun to decline,” the global lender said last month.

While economists agree that there are signs of stability, they also urge caution, noting that the improvement is due to restrictive policy decisions – including limits on imports. And electricity prices remain high.

“There is stabilisation but no substantial growth, which is likely to manifest in slow growth as industry is so dependent on imports,” Safiya Aftab, an Islamabad-based economist, told Al Jazeera. “Employment is not increasing, and bills are becoming unaffordable.”

Ammar Habib Khan, a Karachi-based economist, is more optimistic about the possibility of an economic revival.

“The economy is in an adjustment process. As this continues, and as reforms progress, the trickle-down effect will start. If this continues, inflation will taper off, and businesses will start reinvesting to create more jobs,” he told Al Jazeera.

Do improved economic indicators reflect gains for the public?

Sajid Amin Javed, a senior economist with the Sustainable Development Policy Institute in Islamabad (SDPI), says that this “ad-hoc stabilisation” has been achieved in the past but was never maintained. “It dissipates as soon as the economy moves toward higher growth,” Javed told Al Jazeera.

IMF-led stabilisation in Pakistan has always come at a cost to the people, he said. Javed said stabilisation efforts including limits on imports and increased energy prices to meet revenue targets have slowed economic activity.

Reports ahead of the budget suggest that the government may increase taxes and remove some subsidies – such as on fertilisers – which could raise prices.

“People continue to suffer from higher energy inflation, housing rents and higher prices of goods. The upcoming budget may bring another wave of inflation, making life even more difficult for the common man,” Javed warned.

Hina Shaikh, an economist with the United Kingdom-based International Growth Centre, is also sceptical about the continuation of this stabilisation, which she said was susceptible to global oil price volatility.

“The exchange rate also remains very sensitive to inflation,” the Lahore-based economist said. And a depreciating currency could make it costlier for Pakistan to pay back its debts.

Pakistan’s public debt remains a significant burden on the country’s treasury, with external debt and liabilities exceeding $130bn this year, an increase of 27 percent from last year.

Data from the State Bank of Pakistan earlier this year shows Pakistan needs to pay back almost $29bn in external debt over the next 12 months.

What should Pakistan do?

Experts emphasise the importance of expanding the tax net rather than merely imposing additional taxes on those already in it, such as the salaried class.

Pakistan’s tax-to-GDP ratio currently hovers around 10 percent, among the lowest in the world, exacerbated by the under-taxation of various sectors like agriculture, retail and real estate.

For instance, agriculture, which contributes nearly one-fifth of Pakistan’s GDP, accounts for less than 1 percent of national tax revenue. It is a pattern repeated in real estate, too.

A report by the International Growth Centre, a global research body, last year highlighted that despite a population of more than 100 million, Pakistan’s most prosperous province of Punjab collects less urban property tax than the city of Chennai in India, which has a population of about 10 million.

“The tax net needs to be expanded, and those in the formal sector need relief so they can reinvest in the economy,” said Khan. “Deepening the tax net will not be helpful, as the formal sector is already overtaxed and lacks incentives to reinvest in the economy.”

Javed of SDPI suggests that the government should present a budget that supports economic activity rather than focusing narrowly on meeting revenue targets by taxing those already in the tax net. Some reports in recent days have suggested that solar panels and other clean energy infrastructure could face taxation, though the government has denied that it has any such plans.

“Taxes on solar panels and other green energy solutions to meet revenue targets will hurt the economy in the medium to long term,” he said.

ALJAZEERA
 
Finance Minister Muhammad Aurangzeb presented his first federal budget in the National Assembly on Wednesday with a total outlay of Rs18.9 trillion

Opposition lawmakers, who were absent in the previous few budgets, shouted slogans of “go, Nawaz, go”, even as a seemingly unfazed Aurangzeb powered through the speech.

Pakistan’s budget for the upcoming year aims for a modest 3.6 per cent GDP growth.


Main objectives of FY 2024-25 budget:

Ensuring stability and growth through fiscal consolidation and efficient use of public money

Bringing about reforms to ensure a sustainable external sector by reducing the current account deficit

Strengthening the policy framework for mobilising the private sector, fostering entrepreneurship, encouraging investment, and promoting innovation to stimulate economic growth

Supporting vulnerable sections of society through pro-poor initiatives

Improving the efficiency and productivity of public sector enterprises by allocating more funds for PSDP

Introducing targeted reforms for energy and agricultural sectors

Education and skill development of youth

Integrating green and gender-responsive budgeting into public finance management

This year’s budget, like last year’s, is widely considered to be crafted to align with the International Monetary Fund’s (IMF) requirements to secure another bailout, this time “larger and longer”

The finance minister thanked Prime Minister Shehbaz Sharif, PML-N chief Nawaz Sharif as well as various other leaders of the coalition government for their guidance in preparing the budget

“Dear speaker, I think that despite political and economic challenges, our progress on the economic front in the past one year has been impressive,” Aurangzeb said.

He urged Pakistan to capitalise on a fresh opportunity to revitalise its economy.

“Pakistan has another opportunity to improve itself and embark on the path of economic development. I request everyone not to waste this chance,” Aurangzeb said.

The finance minister hailed the government’s efforts to address economic challenges and pledged to accelerate development under the leadership of PM Shehbaz.

“Before presenting the budget, I want to highlight our journey thus far,” the minister said. “Under Prime Minister Shehbaz Sharif’s leadership, we have pursued a homegrown agenda that has enabled us to overcome current economic challenges and boost the pace of development.”

Aurangzeb acknowledged the challenges faced by Pakistan’s economy, which had been struggling with depleted foreign reserves, a 40 per cent depreciation of the rupee, stagnant economic growth, and soaring inflation that pushed citizens below the poverty line.

He commended the government for securing a crucial nine-month IMF programme in June 2023, which helped Pakistan avoid economic collapse.

“The previous IMF programme was ending, and a new deal was essential to prevent a default. I commend Shehbaz Sharif’s government for their efforts in securing the programme,” he said.

Aurangzeb highlighted the significant improvement in economic indicators, crediting the PM and his team for their efforts. “Inflation stood at 11.8pc in May, a notable achievement considering the challenges. We’re on the right track, and inflation is likely to decrease further in the coming days,” he said.

The minister spoke of a significant turnaround in Pakistan’s economy, with foreign exchange reserves bolstered and international investors showing keen interest in investing in the country.

Key points from tax policy

Expand the tax base to enhance the tax-to-GDP ratio
Documentation of the economy through digitization
Progressive taxation regime to increase burden on high earners
Increase in transaction taxes for non filers

Source: Dawn News
 

Budget 2024-25 unveiled amid NA uproar​


Key points announced in Budget 2024-25:

  • Capital gains tax (CGT) on non-filers to increase to 45%, while for filers of income tax returns, it remains at 15%.
  • The minimum wage is fixed at Rs36,000, up from Rs32,000.
  • Slabs for salaried group to undergo changes.
  • Allocation of Rs4 billion for 'e-bikes' and Rs2 billion for energy-saving fans.
  • Rs86.9 billion allocated to promote remittances in Pakistan.
  • Rs79 billion allocated for the IT sector.
Finance Minister Muhammad Aurangzeb presented budget 2024-25 amid opposition uproar in the National Assembly. The budget focus on fiscal consolidation to contain budget deficit, official sources said on Tuesday.

Kicking off his budget address, Finance Minister Aurangzeb extended his gratitude to Prime Minister Shehbaz Sharif, PML-N leader Nawaz Sharif, and other coalition leaders for their invaluable guidance in preparing the budget.

"Mr Speaker, despite facing political and economic challenges, our progress over the past year has been impressive," Aurangzeb stated, urging the nation to seize the opportunity to revitalise the economy.

Aurangzeb commended the government’s determination in addressing economic challenges and pledged to accelerate development under PM Shehbaz's leadership.

He highlighted the journey so far, emphasising a homegrown agenda that has helped navigate economic difficulties and stimulate development.

He acknowledged the significant hurdles the economy has faced, including depleted foreign reserves, a 40% rupee depreciation, stagnant growth, and soaring inflation pushing citizens below the poverty line.

Aurangzeb praised the previous PDM government, led by Shehbaz Sharif, for securing a crucial nine-month IMF programme in June 2023, which helped avert economic collapse.

"The previous IMF programme was ending, and a new deal was essential to prevent a default. I commend Shehbaz Sharif’s government for their efforts in securing the programme," he said.

The minister pointed to marked improvements in economic indicators, attributing these successes to the efforts of the PM and his team.

"Inflation stood at 11.8% in May, a notable achievement considering the challenges. We’re on the right track, and inflation is likely to decrease further in the coming days," he noted.

Aurangzeb highlighted a significant turnaround, with bolstered foreign exchange reserves and growing international investor interest.

"Pakistan’s foreign exchange reserves have been strengthened, and international investors are now seeking opportunities in our economy," he said.

He also applauded the State Bank's decision to cut interest rates as a significant move to combat inflation, congratulating Shehbaz Sharif and his team for their commendable efforts in turning the economy around.

"These achievements are not ordinary. As a result of these, the country has exited a difficult time," Aurangzeb asserted.

The minister emphasised the need for patience and collective effort to achieve sustainable economic development, cautioning that progress cannot be accelerated overnight.

"There is a need for patience and extreme hard work, combined with homegrown corrective plans. The public must work together with institutions to achieve our economic goals," he concluded, stressing the importance of collaboration and sustained efforts.

Aurangzeb also highlighted several key measures and reforms. The FBR’s tax policies and digitisation efforts have registered 3,400 retailers, with PM Shehbaz Sharif closely monitoring these initiatives.

He pointed out that Pakistan's tax-to-GDP ratio is very low and requires necessary reforms, with the federal government collaborating with provincial governments for economic betterment and fiscal stability.

The government is introducing pension reforms to save Rs45 billion and has approved right-sizing in PWE, which has been closed. A high-level committee will examine the government's structure and provide recommendations in the next two and a half months.

In terms of privatisation, the government is selling state units like PIA and the Roosevelt Hotel to promote the private sector, with Rs622 billion in liabilities transferred from PIA's balance sheet to a holding company set up in March 2024.

Major airports, starting with Islamabad International Airport, will be outsourced by July 2024. The BISP funds will be raised by 27%, with 500,000 new households included in the social spending programme.

Aurangzeb noted that Rs5 billion has been allocated for an agriculture mark-up scheme, with financing available to boost the sector, which constitutes 24% of GDP.

The energy sector will see Rs253 billion allocated, focusing on reducing losses and promoting wind and solar power, with efforts underway to freeze debt from power reforms and involve the private sector.

The IT sector will receive Rs79 billion, with plans for an IT park in Karachi and efforts to increase exports to $3.5 billion this year.

A national digital commission will be introduced to advance digital solutions. The social welfare and education sectors will see Rs206 billion allocated for water resources, Rs8 billion for an IT park in Karachi, and Rs206 billion for drinking water projects.

Smart screens, tablets, blended learning, and e-libraries will be provided in schools, and six-month IT courses will be offered to students.

Overseas Pakistanis will be facilitated in sending remittances, with Rs90 billion allocated for this purpose, recognising their crucial role in the economy.

Aurangzeb presented a positive economic outlook, expecting 3.6% growth in the next fiscal year (2024-25) and keeping inflation around 12%. The budget layout totals Rs18,877 billion, with significant allocations for defence (Rs2,015 billion), pensions (Rs1,014 billion), and subsidies for the power sector (Rs1,363 billion).

Efforts are also being made to attract global climate finance and improve Pakistan's economic growth through a homegrown reform agenda.

The PSDP allocation of Rs1,500 billion, a historical high, will focus on infrastructure, social sector development, and strategic projects aimed at enhancing exports and productivity.

In FY25, a budget allocation of Rs50 billion has been earmarked for the production sector. A comprehensive Karachi package is being introduced, with special projects for Karachi, Hyderabad, Sukkur, and Benazirabad.

The tax-to-GDP ratio will be increased through economic digitisation and a progressive tax system that levies higher taxes on higher income groups.

The undocumented economy will be brought under the tax net through digitisation, with the FBR introducing personal income tax reforms.

Under these reforms, tax exemptions will remain unchanged at an annual income level of Rs600,000 for salaried individuals, promoting equity by ensuring no increase in income tax for the salaried class. The minimum wage is fixed at Rs36,000, up from Rs32,000.

The government is committed to facilitating exporters to promote economic growth, recognising that exports are the backbone of the economy. To encourage tax compliance, different tax slabs have been implemented for filers and non-filers, with a capital gains tax fixed at 15% for filers and up to 45% for non-filers.

Sales tax exemptions on many products will be reduced or eliminated, with the standard 18% sales tax imposed on mobile phones and motor car taxes based on the vehicle price.

BISP beneficiaries will increase to 10 million, with sales tax on textiles and leather raised to 15%.

Efforts to document traders will see an expansion of advance tax scope, while tax on the Pakistan Stock Exchange will be increased from 1% to 2.25%.

Capital gains tax on non-filers to go as high as 45%, while on filers of income tax returns, it will stay at 15%.

The FBR will impose personal income tax on incomes exceeding Rs600,000 per annum, with progressive taxation ensuring higher incomes are taxed more.

The government has allocated Rs4 billion for e-bikes and plans to support exporters through joint ventures, especially with Chinese companies under CPEC phase-II.

The recent visit to China resulted in several MoUs aimed at promoting trade and investment in sectors such as iron and steel, automobiles, and textiles.

The Pakistan Climate Change Authority will be activated to promote solar and wind energy, with Rs206 billion allocated for water projects.

The Finance Minister announced that iron and steel scrap will be exempted from sales tax to eliminate the misuse of fake invoices.

Tax rates for textile and leather manufacturing will be adjusted from 15% to 18%, which will not impact normal people.

The GST on the tier-1 textile retail sector will be enhanced from 15% to 18%. Sales of cigarettes without tax stamps will be penalised, and the Federal Excise Duty (FED) on cement will be increased to Rs3 per kg from Rs2 per kg.

Customs duty exemptions on imports of hybrid cars will be abolished, and duties on steel and paper products will be increased. Incentives will be introduced for the import of plant and machinery, raw materials, and batteries for the solar panel industry.

Salaries of grade 1-16 officers will be increased by 25%, and for grade 17-22 officers, the increase will be 22%. There will be a 15% increase in pensions for retired individuals.

Health insurance will be provided to 5,000 journalists in the first round and extended to 10,000 journalists later. The government proposes Rs79 billion for the IT sector, with incentives for importing plant and machinery for the solar panel industry.

Pakistan Peoples Party Parlimentarians (PPPP) Secretary Information Shazia Marri confirmed to The Express Tribune that the party will not attend the session.

Only three of PPPP lawmakers, Naveed Qamar, Khursheed Shah and Ijaz Jakhrani, are attending the NA budget session.

According to sources, the main targets of the budget would be mitigating people’s problems, transforming agriculture sector, promoting information technology (IT), boosting exports, promoting industrial growth and bolstering businesses.

The budget was formulated while considering the existing challenges facing the economy on domestic and international fronts, the sources said, adding that the government was firmly committed to presenting a pro-people, business-friendly and progressive federal budget.

On the revenue side, according to the sources, the government was likely to set the revenue collection target at over Rs12 trillion for the fiscal year 2024-25, given robust revenues growth during the outgoing fiscal year, 2023-24.

“The budget is being prepared in close coordination among all departments and ministries, involved in budget-related events, including the presentation of the budget in the parliament a day after launching the Economic Survey,” a source said.

“It will pursue policies aimed at fiscal consolidation to contain budget deficit. In addition revenue mobilisation, economic stabilisation, reduction in non-development expenditures, job creation would be the main features of the budget,” the source added.

The budget comes a day after the government said economic growth of 2.4% expected in the current year would miss a target of 3.5%, although revenues were up 30% over last year, and the fiscal and current account deficits were under control.

Pakistan is in talks with the IMF for a loan estimated to range from $6 billion to $8 billion, as it seeks to avert a default for an economy growing at the slowest pace in the region.

But a recent economic uptick, following stabilisation measures and falling inflation, as well as Monday's interest rate cut by the central bank, has made the government optimistic about prospects for growth.

The key policy rate could fall further this year and economic growth would continue to rise, Finance Minister Muhammad Aurangzeb, set to present his first budget, told reporters on Tuesday.

Markets will watch the budget for a target for proceeds from privatisation, as Pakistan looks to make its first major sale in nearly two decades with the disposal of a stake in its national airline, kicking off a series of such moves.

Tapping under-taxed sectors such as agriculture and retail for additional revenues would prompt protests by farmers and small traders, while spending cuts in discretionary funds for MPs have already squeezed alliances and party loyalties.

 
Concessions on import, solar panel making welcomed

Stakeholders involved in renewable energy-related businesses have welcomed concessions announced in the federal budget on the import and local manufacture of solar panels, urging the government to immediately issue details in this regard.

“Perhaps, the government has realised that renewable energy (solar, wind etc) is the only way to save the public from expensive energy sources like thermal and coal.

“It has also realised that since the solar energy industry is booming fast, it cannot stop the public from using this to rid themselves of expensive, traditional sources,” explained Mr Mustafa Amjad, Programme Director of the Renewable First — an energy think tank based in Islamabad.

Talking to Dawn, Mr Amjad praised the government for offering incentives to local manufacturers of solar panels. “Incentivising the manufacture of solar energy equipment by allowing the tax-free import of raw material is a great move. The decision will save foreign exchange and create hundreds of jobs,” he said.

According to him, the “massive tax relief” has not been restricted limited to raw material for solar panels but also for the manufacture of inverters, lithium batteries, solar cells and solar batteries.

Mustafa Amjad said although hydropower is a cheap energy source, it demands huge sums of money and takes 10 to 20 years to complete such projects. “Solar power is cheaper than all other sources of energy.”

He said the prices of batteries would come down soon, making the installation of solar panels affordable for most people. “Chinese companies are trying to make cheap batteries and exporting to Pakistan. In this way the local battery prices will also be reduced considerably,” he added.

Talking to Dawn, Syed Muhammad Talha Akmal, an executive at a Chinese company, said although the government has announced concessions, “we have to wait and see whether the people engaged in the business pass on the benefit to the consumer or not”.

“At present panels being imported from China are much cheaper than the locally manufactured ones. It is necessary to issue SROs that will help us to know the extent of tax concessions given by the government on the import and local manufacture of solar panels,” he explained.

Mr Akmal said the concessions would enable the common man to install off-grid solar power system (excluding batteries for storage) and use cheaper energy. “If an individual installs a fully fledged off-grid system (with batteries), they can completely get rid of expensive power from Discos.”

SOURCE: DAWN
 

PSX hits historic high, closes above 76,000 points for first time​


Pakistan Stock Exchange (PSX) reached an all-time high, closing above the 76,000-point milestone for the first time in intraday trading on Thursday.

The KSE-100 Index saw an increase of 3,410 points, surpassing key thresholds of 73,000, 74,000, 75,000, and 76,000 points.

Mohammed Sohail, CEO of Topline Securities, credited the upward trend to the "absence of tax increase on dividends and capital gains (CGT) for investors in the new budget."

The upturn followed Finance Minister Muhammad Aurangzeb’s assurance to the nation of efforts to stabilise the economy ahead of the federal budget presentation.

Earlier, the trading session began with a spike but soon investors adopted a wait-and-see approach, keeping a close watch on developments surrounding the budget announcement.

Investor sentiment turned positive as the finance minister revealed while unveiling the Economic Survey 2023-24 on Tuesday that there were constructive talks with the IMF for a new loan programme.

At the end of trading on Wednesday, the benchmark KSE-100 index had recorded an increase of 207.94 points, or 0.29%, and settled at 72,797.43.

 

Journo’s question leaves FM searching for answers​


Journalists staged a protest against the imposition of heavy taxes on salaried employees before Finance Minister Muhammad Aurangzeb's press conference on Thursday.

The finance minister was set to address a post-budget press conference in Islamabad when journalists stood up in protest.

The journalists recorded a token protest just before the start of the press conference. They voiced concerns that while salaries in the private sector are not increasing, hefty taxes have been imposed on private sector employees.

The Express Tribune earlier reported that the federal government increased the tax rate for both salaried and non-salaried taxpayers in the federal budget for the next financial year, placing a cumulative burden of Rs75 billion on the salaried person, Rs150 billion on the non-salaried individuals.

The budget proposed a maximum tax rate of 35% for the salaried persons, and 45% for non-salaried individuals. The minimum threshold of Rs50,000 monthly income had been maintained for both the categories, while the number of tax slabs would also remain at 6.

The salaried people in the first tax slab with the income of up to 600,000 per annum or Rs50,000 per month had been exempted from income tax. In the second tax slab, the income tax for those earning between 600,000 and 1.2 million per annum would be 5%.

This 5% tax, according to the Finance Bill, would be charged on the amount after deducting Rs600,000 from the total annual income. Hence, in this category, the monthly income tax would increase from Rs1,250 per month during the current fiscal year to Rs2,500 per month in the next fiscal year.

Under the third slab, which covered individuals, having the annual income of Rs1.2 million to Rs2.2 million, a fixed tax of Rs30,000 would be levied along with 15% income tax. The tax payment in this category would increase from the current Rs11,667 to Rs15,000 per month.

In the fourth tax slab, which covered individuals having the annual income of Rs2.2 million to Rs3.2 million, the fixed tax would be Rs180,000, besides 25% tax on the remaining amount after deducting Rs2.2 million. Overall, the per-month tax in this slab would increase from Rs28,770 to Rs35,834.

In the fourth tax slab, which covered individuals having the annual income of Rs3.2 million to Rs4.1 million, the fixed tax would be Rs430,000, besides 30% tax on the remaining amount after deducting Rs3.2 million. Overall, the per-month tax in this slab would increase from Rs47,408 to Rs53,333.

While for the sixth tax slab, the top-most category comprising individuals having the annual salary income of more than Rs4.1 million, the fixed tax of Rs700,000 would be levied in addition to 35% income tax on the remaining amount after deducting Rs4.1 million from the total salary.

 

Journo’s question leaves FM searching for answers​


Journalists staged a protest against the imposition of heavy taxes on salaried employees before Finance Minister Muhammad Aurangzeb's press conference on Thursday.

The finance minister was set to address a post-budget press conference in Islamabad when journalists stood up in protest.

The journalists recorded a token protest just before the start of the press conference. They voiced concerns that while salaries in the private sector are not increasing, hefty taxes have been imposed on private sector employees.

The Express Tribune earlier reported that the federal government increased the tax rate for both salaried and non-salaried taxpayers in the federal budget for the next financial year, placing a cumulative burden of Rs75 billion on the salaried person, Rs150 billion on the non-salaried individuals.

The budget proposed a maximum tax rate of 35% for the salaried persons, and 45% for non-salaried individuals. The minimum threshold of Rs50,000 monthly income had been maintained for both the categories, while the number of tax slabs would also remain at 6.

The salaried people in the first tax slab with the income of up to 600,000 per annum or Rs50,000 per month had been exempted from income tax. In the second tax slab, the income tax for those earning between 600,000 and 1.2 million per annum would be 5%.

This 5% tax, according to the Finance Bill, would be charged on the amount after deducting Rs600,000 from the total annual income. Hence, in this category, the monthly income tax would increase from Rs1,250 per month during the current fiscal year to Rs2,500 per month in the next fiscal year.

Under the third slab, which covered individuals, having the annual income of Rs1.2 million to Rs2.2 million, a fixed tax of Rs30,000 would be levied along with 15% income tax. The tax payment in this category would increase from the current Rs11,667 to Rs15,000 per month.

In the fourth tax slab, which covered individuals having the annual income of Rs2.2 million to Rs3.2 million, the fixed tax would be Rs180,000, besides 25% tax on the remaining amount after deducting Rs2.2 million. Overall, the per-month tax in this slab would increase from Rs28,770 to Rs35,834.

In the fourth tax slab, which covered individuals having the annual income of Rs3.2 million to Rs4.1 million, the fixed tax would be Rs430,000, besides 30% tax on the remaining amount after deducting Rs3.2 million. Overall, the per-month tax in this slab would increase from Rs47,408 to Rs53,333.

While for the sixth tax slab, the top-most category comprising individuals having the annual salary income of more than Rs4.1 million, the fixed tax of Rs700,000 would be levied in addition to 35% income tax on the remaining amount after deducting Rs4.1 million from the total salary.

I looked at the tax rates in Pakistan and honestly while tax slabs have to be analysed, the tax rates are not unreasonable compared to India and other developing countries. Seeing the amount of complaints and Op-Eds about overtaxation etc., I think this actually may be a case of the population getting too used to under-taxation. That and Tax evasion are probably the reasons why Pakistan's Tax to GDP ratio is so low.

tax-capacity-chart-1-v3.ashx


As you can see, even among Low-income developing countries, Pakistan's 10% ratio is really poor.
 
Pakistan eyes Panda Bond return

The government would issue Panda bonds worth $300 million in the Chinese market to mark the beginning of Pakistan’s return to the international bond market.

The bonds will be issued after the approval of a new loan programme from the International Monetary Fund (IMF). The government will also approach commercial banks in China and other financial markets.

The sources within the Ministry of Finance said that the federal government is also planning to issue Eurobonds in the next fiscal year (2025-2026).

The issuance of these bonds is aimed at paying off external debts and improving Pakistan’s credit rating.

Earlier in April, Pakistan repaid $1 billion in Eurobonds as a scheduled payment ahead of seeking a long-term bailout from the International Monetary Fund (IMF).

The bond, launched in 2014 and repaid on Friday, was maturing this month.

“The payment was made to the agent bank for onward distribution to the bond holders,” the State Bank of Pakistan said in a statement.

 
Pakistan’s foreign exchange reserves stand at US$14.38bn

Pakistan’s foreign exchange reserves increased by US$168 million in the first week of June, reaching US$14.38 billion, ARY News reported citing the State Bank of Pakistan.

As per a statement issued by the central bank, Pakistan’s reserves held by commercial banks increased by US$174 million to $5.28 billion during the week ended on June 7.

The reserves held by the SBP decreased by US$6.2 million to stand at US$9.10 billion. The central bank did not mention the reasons for the decrease in the reserves held by it.

“During the week ended on 07-June-2024, SBP reserves decreased by US$ 6 million to US$ 9,103.3 million,” the SBP’s statement read.

Earlier on June 6, it was reported that the foreign exchange reserves held by the State Bank of Pakistan (SBP) stood at US$ 9.093 billion after a decrease of US$ 63 million due to external debt repayments.

In a statement, the central bank’s spokesperson said that the country’s total liquid foreign reserves stood at US$ 14.31 billion during the week ended on 31st May.

According to the SBP, out of the total foreign reserves, US$ 5.22 billion is held by commercial banks as net foreign reserves.

“During the week ended on 24-May-2024, SBP reserves decreased by US$ 63 million to US$ 9,093.7 million due to external debt repayments,” the statement read.


ARY News
 
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