Pkrevenue.com

Author: Mrs. Anjum Shahnawaz

  • FBR seeks power companies help for mandatory registration of businesses

    FBR seeks power companies help for mandatory registration of businesses

    ISLAMABAD: Federal Board of Revenue (FBR) has sought help of ministry of power for invoking Section 181AA of Income Tax Ordinance, 2001 whereby it is mandatory for a businessman to get registered and file income tax return while requesting industrial or commercial connection.

    Chairman Federal Board of Revenue Syed Muhammad Shabbar Zaidi in his letter to Ministry of Power has sought its help for the implementation of Section 181AA of Income Tax Ordinance, 2001 which specifically stipulates that any application for commercial or industrial connection of electricity or gas shall not be processed and such connection shall not be provided unless the person applying for electricity or gas connection is registered under the said Section which pertains to filing of income tax returns.

    Chairman FBR has further added that FBR has extended the date of filing the return of income for the year 2018 to August 2, 2019 to facilitate filing of return by all persons who were required to file the return of income but have not filed so far. Chairman FBR has requested Ministry of Power to issue instructions to Power Distribution Companies to apprise them that it is mandatory to be on ‘Active Taxpayers List (ATL)’ for every commercial and industrial electricity or gas consumer.

    Chairman FBR appreciated the cooperation of Ministry of Power for providing the data of industrial and commercial users of electricity and hoped that Ministry of Power would also help in the implementation of Section 181AA of Income Tax Ordinance through the involvement of respective ‘Distribution Companies’.

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    FBR grants general relaxation to file tax year 2018 income returns up to August 02

  • FBR notifies transfers of BS-17 to BS-20 IRS officers

    FBR notifies transfers of BS-17 to BS-20 IRS officers

    ISLAMABAD: Federal Board of Revenue (FBR) on Monday notified transfers and postings of BS-17 to BS-20 officers of Inland Revenue Service (IRS) with immediate effect and until further orders.

    The FBR notified transfers and postings of following officers:

    01. Abid Mehmood (Inland Revenue Service/BS-20) has been transferred and posted as Director, Directorate of Intelligence & Investigation (Inland Revenue), Peshawar from the post of Commissioner, (Peshawar Zone) Regional Tax Office, Peshawar, according to notification received to Pakistan Revenue.

    02. Muhammad Tariq Arbab (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Peshawar Zone) Regional Tax Office, Peshawar from the post of Director, Directorate of Intelligence & Investigation (Inland Revenue), Peshawar.

    03. Asem Iftikhar (Inland Revenue Service/BS-20) has been transferred and posted as Director, Directorate of Intelligence & Investigation (Inland Revenue), Karachi from the post of Chief, Federal Board of Revenue (Hq), Islamabad.

    04. Abdul Rehman Bullo (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Zone-II) Large Taxpayers Unit-II, Karachi from the post of Director, Directorate of Intelligence & Investigation (Inland Revenue), Karachi.

    05. Ahmad Kamal (Inland Revenue Service/BS-20) has been transferred and posted as Director, Directorate of Intelligence & Investigation (Inland Revenue), Lahore from the post of Commissioner, Inland Revenue (Appeals-III), Lahore.

    06. Muhammad Naveed Akhtar (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue Inland Revenue (Appeals-III), Lahore from the post of Director, Directorate of Intelligence & Investigation (Inland Revenue), Lahore.

    07. Pir Khalid Ahmed Qureshi (Inland Revenue Service/BS-20) has been transferred and posted as Director, Directorate of Intelligence & Investigation (Inland Revenue), Hyderabad from the post of Additional Commissioner, Regional Tax Office, Hyderabad.

    08. Pervez Ahmad Shar (Inland Revenue Service/BS-19) has been transferred and posted as Additional Commissioner Inland Revenue Regional Tax Office, Hyderabad from the post of Additional Director, Directorate of Intelligence & Investigation (Inland Revenue), Hyderabad.

    09. Ms. Fakhryia Anjum (Inland Revenue Service/BS-19) has been transferred and posted as Additional Commissioner Inland Revenue Regional Tax Office, Peshawar from the post of Additional Director, Directorate of Intelligence & Investigation (Inland Revenue), Peshawar.

    10. Abdul Rehman Khilji (Inland Revenue Service/BS-19) has been transferred and posted as Additional Commissioner Inland Revenue Regional Tax Office II, Karachi from the post of Additional Director, Directorate of Intelligence & Investigation (Inland Revenue), Karachi.

    11. Hameed-ur-Rehman (Inland Revenue Service/BS-19) has been transferred and posted as Additional Director, Directorate of Intelligence & Investigation (Inland Revenue), Peshawar from the post of Additional Commissioner, Regional Tax Office, Peshawar.

    12. Muhammad Amin Qureshi (Inland Revenue Service/BS-19) has been transferred and posted as Additional Director, Directorate of Intelligence & Investigation (Inland Revenue), Karachi from the post of Additional Commissioner, Corporate Regional Tax Office, Karachi.

    13. Ajmal Khan (Inland Revenue Service/BS-19) has been transferred and posted as Additional Commissioner Inland Revenue Regional Tax Office, Peshawar from the post of Additional Director, Directorate of Intelligence & Investigation (Inland Revenue), Peshawar.

    14. Saad Waqas (Inland Revenue Service/BS-19) has been transferred and posted as Additional Director, Directorate General of Training & Research (Inland Revenue), Lahore from the post of Additional Director, (IR) Directorate of Intelligence & Investigation (Inland Revenue), Lahore.

    15. Qaiser Naeem (AOST/BS-18) has been transferred and posted as Assistant Director (Audit), Regional Tax Office, Faisalabad from the post of Assistant Director (Audit), Directorate of Intelligence & Investigation (Inland Revenue), Faisalabad.

    16. Sami Ullah Khan (Inland Revenue Service/BS-18) has been transferred and posted as Deputy Commissioner Inland Revenue Regional Tax Office, Peshawar from the post of Deputy Director, (IR) Directorate of Intelligence & Investigation (Inland Revenue), Peshawar.

    17. Imran Zafar (Inland Revenue Service/BS-18) has been transferred and posted as Deputy Director, Directorate of Intelligence & Investigation (Inland Revenue), Faisalabad from the post of Deputy Commissioner, Regional Tax Office, Faisalabad.

    18. Arshad Ahmed Khan (SAST/BS-18) has been transferred and posted as Assistant Director (Audit), Regional Tax Office II, Karachi from the post of Assistant Director (Audit), Directorate of Intelligence & Investigation (Inland Revenue), Karachi.

    19. Ms. Sarwat Malik Habib (Inland Revenue Service/BS-18) has been transferred and posted as Deputy Commissioner Inland Revenue Regional Tax Office, Islamabad from the post of Deputy Director, Directorate General of Intelligence & Investigation (Inland Revenue), Islamabad.

    20. Muhammad Tariq Aziz (Inland Revenue Service/BS-18) has been transferred and posted as Deputy Commissioner Inland Revenue Regional Tax Office, Islamabad from the post of Deputy Director, (IR) Directorate General of Intelligence & Investigation (Inland Revenue), Islamabad.

    21. Masood Alam (SAST/BS-18) has been transferred and posted as Assistant Director (Audit), Regional Tax Office II, Karachi from the post of Assistant Director (Audit), Directorate of Intelligence & Investigation (Inland Revenue), Karachi.

    22. Nadeem Ashraf Baig (SAST/BS-18) has been transferred and posted as Assistant Director (Audit), Regional Tax Office III, Karachi from the post of Assistant Director (Audit), Directorate of Intelligence & Investigation (Inland Revenue), Karachi.

    23. Hafiz Muhammad Azam Nafis (SAST/BS-18) has been transferred and posted as Assistant Director (Audit), Regional Tax Office III, Karachi from the post of Assistant Director (Audit), Directorate of Intelligence & Investigation (Inland Revenue), Karachi.

    24. Muhammad Rashid Chundrigar (SAST/BS-18) has been transferred and posted as Assistant Director (Audit), Regional Tax Office III, Karachi from the post of Assistant Director (Audit), Directorate of Intelligence & Investigation (Inland Revenue), Karachi.

    25. Zahoor Ahmad (Inland Revenue Service/BS-17) has been transferred and posted as Deputy Director, Directorate of Intelligence & Investigation (Inland Revenue), Lahore from the post of Deputy Commissioner, Regional Tax Office II, Lahore.

    Through another notification the following IR officers have been transferred and posted:

    01. Munir Sadiq (Inland Revenue Service/BS-20) has been transferred and posted as Chief, (Inland Revenue Policy Wing) Federal Board of Revenue (Hq), Islamabad from the post of Commissioner-IR, (Zone-I) Large Taxpayers Unit, Islamabad.

    02. Ms. Reema Masud (Inland Revenue Service/BS-20) has been transferred and posted as Chief, (Inland Revenue Policy Wing) Federal Board of Revenue (Hq), Islamabad from the post of Commissioner-IR, (Corporate Zone) Regional Tax Office, Islamabad.

    03. Said Iqbal (Inland Revenue Service/BS-19) has been transferred and posted as Secretary, (Inland Revenue Policy Wing) Federal Board of Revenue (Hq), Islamabad from the post of Additional Commissioner-IR, Regional Tax Office II, Karachi.

    04. Ajaz Hussain (Inland Revenue Service/BS-19) has been transferred and posted as Additional Commissioner Inland Revenue Corporate Regional Tax Office, Karachi from the post of Secretary, (Income Tax Budget) Federal Board of Revenue (Hq), Islamabad.

    05. Abdul Wahid Shar (Inland Revenue Service/BS-19) has been transferred and posted as Secretary, (Inland Revenue Policy Wing) Federal Board of Revenue (Hq), Islamabad from the post of Additional Commissioner-IR, Large Taxpayers Unit-II, Karachi.

    06. Usman Ahmed Khan (Inland Revenue Service/BS-19) has been transferred and posted as Additional Director, Directorate General of Training & Research (Inland Revenue), Lahore from the post of Secretary, (Income Tax Clarification) Federal Board of Revenue (Hq), Islamabad.

    07. Maheen Hassan (Inland Revenue Service/BS-18) has been transferred and posted as Second Secretary, (Inland Revenue Policy Wing) Federal Board of Revenue (Hq), Islamabad from the post of Deputy Commissioner-IR, Regional Tax Office, Quetta.

    08. Muhammad Adil Khan (Inland Revenue Service/BS-18) has been transferred and posted as Second Secretary, (Inland Revenue Policy Wing) Federal Board of Revenue (Hq), Islamabad from the post of Second Secretary, (Lit-HC) Federal Board of Revenue (Hq), Islamabad.

    09. Muhammad Nauman Anees (Inland Revenue Service/BS-17) has been transferred and posted as Second Secretary, (Inland Revenue Policy Wing) Federal Board of Revenue (Hq), Islamabad from the post of Deputy Commissioner-IR, Large Taxpayers Unit, Lahore.

    The FBR said that the officers who are drawing performance allowance prior to issuance of this notification shall continue to draw this allowance on the new place of posting.

  • FBR allows goods clearance without retail price print till July 31

    FBR allows goods clearance without retail price print till July 31

    ISLAMABAD: Federal Board of Revenue (FBR) on Monday allowed to clear consignments of consumer items without printing of retail prices till July 31, 2019 in order to facilitate clearance of stuck up containers.

    The Board’s vide letter No. 1/2-STB/2019/87779-R, dated 4.7.2019, had directed that imported Third Schedule items be allowed clearance after affixation of stickers printed with retail price till 31st July, 2019.

    The Board has received several representations that the requirement of printing retail price on imported Third Schedule items has been introduced through the Finance Act, 2019 and the importers did not have sufficient notice of the change, therefore, a large number of consignments of such items are arriving without printed retail price, and that that de-stuffing of containers to affix stickers in the aforesaid manner is not practical and the same would cause blockage of imports and congestion at the ports.

    Accordingly, in order to resolve the issue, the Board is pleased to allow clearance of imported Third Schedule items without printing of retail price or affixing stickers for which goods declaration are filed by July 31, 2019 subject to the condition that the importer declares retail price for each of the imported items in terms of section 2(27) of the Sales Tax Act, 1990, and that the goods are assessed for sales tax on such declared retail price.

  • Fiscal deficit deteriorates on slowdown in tax collection: SBP

    Fiscal deficit deteriorates on slowdown in tax collection: SBP

    KARACHI: State Bank of Pakistan (SBP) on Monday said that the fiscal deficit was ballooned owing to slowdown in tax revenue collection and fall in non-tax revenue.

    In its third quarterly report on Pakistan Economy, the SBP said that the fiscal deficit deteriorated further, as a steep fall in non-tax revenues and a slowdown in tax revenue led the overall revenue collection to stagnate at last year’s level. On the other hand, expenditure increased sharply during July-March FY19, specifically the current expenditure that more than offset the decline in the development expenditure.

    While Pakistan’s economy moved along the stabilization phase led by demand management policies, vulnerabilities in the external and fiscal sectors persisted during Jul-Mar FY19.

    This implies that the current stabilization agenda needs to be reinforced with deep rooted structural reforms.

    The pace of economic growth slowed down considerably during FY19, mainly in response to policy measures taken to curb the twin deficits.

    These measures affected the performance of the industrial sector and dampened manufacturing activities in the country.

    Meanwhile, water- and weather-related concerns, in tandem with the higher cost of major inputs, took a toll on crop production. The weak showing by the commodity-producing sectors also constrained the output of the services sector.

    According to the report, inflation stubbornly kept an upward trajectory. Despite several rounds of policy rate hike since January 2018, the average CPI inflation during Jul-Mar FY19 exceeded the full year target.

    Although demand-pull pressures lessened in intensity towards the end of FY19, the Non-Food Non-Energy component continued to climb due to second round impact of exchange rate deprecation and increase in energy prices.

    On the external front, the current account deficit (CAD) declined on the back of lower import payments for both goods and services, and a decent growth in workers’ remittances.

    However, given the elevated level of CAD and insufficient foreign investments to fill the financing gap, the country had to resort to bilateral and commercial sources for external financing.
    The report features a special section on power tariffs in Pakistan. The analysis explains the process of power tariff determination in the country and assesses why tariffs have not softened despite the decline in fuel cost. It suggests that capacity payments constitute the bulk of power tariffs in Pakistan, and a sharp increase in these payments in recent years has completely offset gains from declining fuel cost.

    The report also contains another special section on the outlook of food security in Pakistan. The analysis emphasizes the related challenges that the country may face going forward, such as a high population growth and unfavorable water and climatic conditions, unless remedial measures are taken urgently.

  • FPCCI urges government to resolve issues of small traders

    FPCCI urges government to resolve issues of small traders

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Monday urged the government resolves problems of small traders in order to keep the economy move forward.

    Engr. Daroo Khan Achackzai, President FPCCI, S.M. Muneer, Iftikhar Ali Malik, Former Presidents, Senior Vice President and Vice Presidents, Mian Zafar of Faisalabad Small Traders Chamber, Dr. Noman Idrees Butt and Business Community of Pakistan strongly support new government initiative to efforts to document the economy and expanding tax net that will definitely boost socio-economic development and economic prosperity of the people of Pakistan.

    The FPCCI always proactively engage with the government to bring foreign exchange through positive image of Pakistan and assures its support to help government on all economic fronts.

    The business community while appreciating the Prime Minister endeavor to re-track economy of the Pakistan has also requested that being the policy of the PM to solve all issues with consultation and concentration by involving real stakeholder to invite businessmen especially small traders who are suffering seriously due to some measures announced in the federal budget.

    Being the national institute of private sector the President FPCCI showed his serious concern on the problems of small traders and requests the prime minister to give us time and appointment to solve the latest burning issues on priority to keep the economy moving forward.

  • KCCI supports government resolve to tax all taxable incomes

    KCCI supports government resolve to tax all taxable incomes

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has supported efforts of the government to bring all taxable income into tax net.

    In a statement issued on Monday President KCCI Junaid Esmail Makda said that Karachi Chamber never supported any strikes and will continue to do so in future as well because strikes were neither in favor of the business community nor in favor of the government therefore, they strongly believe in negotiations which was also suggested by Chairman BMG during the abovementioned meeting with PM Imran Khan.

    He opined that the government has set an ambitious revenue collection target and we hope that the government could come close to achieving it as the country is in dire need of it.

    Junaid Makda stated that the government rightly emphasizes on strictly dealing with tax evaders particularly those who have been living lavish lives, frequently travelling abroad, having huge properties and extravagant vehicles while their kids were also studying in foreign universities but during this course of action no injustice be done to any innocent.

    “Our Prime Minister, State Minister, PM’s Advisor, Chairman FBR and other lawmakers have been claiming of possessing details of all such tax evaders and assuring to take strict action but I would like to suggest that the names of such elements who are the actual culprits must be publicized in the media. It is genuinely because of such elements that the loyal taxpayers have to bear the burden of exorbitant taxes which is a sheer injustice and needs special attention,” he added.

    While appreciating PM’s remarks pertaining to partnering with the business community in order to resolve issues and ensuring Ease of Doing Business which is the need of the hour, Junaid Makda requested a flexible approach while dealing with loyal taxpayers who hardly receive just 5 percent of facilities as compared to their contribution to the national exchequer.

    He further pointed out that hundreds of imported containers remain stuck up at the port either due to anomalies or any other issues emerging after the amendments. Although the Chairman FBR Shabbar Zaidi has assured to look into this matter but the business community would highly appreciate a more rapid approach with permanent solution to this issue in order to save businessmen from suffering serious losses on account of demurrage and detention charges.

    Chairman Businessmen Group (BMG) & Former President KCCI Siraj Kassam Teli and President Karachi Chamber of Commerce & Industry (KCCI) Junaid Esmail Makda, welcomed the assurance given by Prime Minister Imran Khan during his last meeting with Karachi’s business community, stated that the Karachi Chamber fully supports the government’s resolve to bring everyone into the tax net as higher number of taxpayers would result in dividing the tax burden and ultimately ensure relief to existing taxpayers who are currently overburdened with exorbitant taxes and duties.

    Chairman BMG and President KCCI categorically stated that Karachi Chamber’s membership base comprises of taxpayers only who all have valid NTN numbers. “KCCI firmly believes that everyone should pay taxes and it was a matter of pride for us that we represent a city that contributes a mammoth amount of more than 70 percent revenue to the national exchequer in shape of taxes, duties and other levies”, they said, adding that everyone should be taxed and no tax exemptions should be granted to favorites as it is the prime responsibility of every citizen to contribute towards the progress and prosperity of Pakistan by paying all the applicable taxes.

    The KCCI leadership further urged the FBR to post the city-wise taxation details and relevant statistical data on its website so that actual position could be brought into the limelight and other cities, which were contributing less taxes, must also be taken to task.

    Chairman BMG Siraj Kassam Teli commented that the government has devised numerous laws and amendments with a sincere intent to enhance tax collection but we fear that most of these laws and amendments which have enhanced discretionary powers to FBR officials even at lower level would only be used to harass the taxpayers in order to seek personal benefits and gratifications.

    “The government is serious towards improving the tax collection which we highly appreciate but the recently introduced laws and amendments need some review and scrutiny by independent individuals. These laws should be devised and implemented in such a manner that they don’t pave way for corruption but actually enhance the revenue”, he added.

    He was of the opinion that in order to achieve the desired results in terms of revenue collection, the government has simultaneously opened many fronts which have terribly disturbed the entire business cycle and it was the basic reason behind why they (the government) have been facing agitations and resistance.

    “It is requested to compare all the segments where taxes have been imposed verses the revenue expected and decide whether it is worth to take on that particular segment immediately or leave it for a while. We are not asking to leave anybody out of the net but wherever the implementation is not immediately possible it’s better to give some time and let the country move forward, he added.

  • Foreign direct investment falls by 50 percent in 2018/2019

    Foreign direct investment falls by 50 percent in 2018/2019

    KARACHI: The inflow of foreign direct investment (FDI) to the country has declined by 50 percent to $1.73 billion during fiscal year 2018/2019 as compared with $3.47 billion in the preceding fiscal year, State Bank of Pakistan (SBP) said on Monday.

    The inflows under FDI recorded growth of 24.5 percent to $3.16 billion during last fiscal year as compared with $4.185 billion in the fiscal year 2017/2018. On the other hand the outflows recorded 99 percent increase to $1.422 billion during fiscal year 2018/2019 as compared with $714.2 million in the preceding fiscal year.

    The total foreign private investment into the country fell by 59.10 percent to $1.32 billion in the last fiscal year as compared with $3.23 billion in the preceding fiscal year.

    The inflows of portfolio investment into the capital market were declined by 72.5 percent during the fiscal year under review. The market witnessed outflows of $415.2 million during the last fiscal year as compared with the outflows of $240.7 million in the preceding fiscal year.

    The total foreign investment including foreign public investment fell by 94.2 percent to $330 million in 2018/2019 as compared with $5.68 billion in the preceding fiscal year.

  • Stock market plunges on policy rate uncertainty

    Stock market plunges on policy rate uncertainty

    KARACHI: The stock market plunged by 714 points on Monday owing to uncertainty on monetary policy that is scheduled to be announced tomorrow.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 32,958 points as against 33,672 points showing a decline of 714 points.

    Analysts at Arif Habib Limited said that the market witnessed a significant decline of around 750 points during the session that is caused by uncertainty on monetary policy.

    As per revised schedule, SBP is set to announce monetary policy tomorrow, where consensus estimate is for a hike of 100 basis points.

    An interest rate hike in line with expectation will increase the policy rate to 13.25 percent.

    Slowdown in economy amid recent protest of traders has caused negative sentiment amongst investors.

    Major volumes were observed in Cement Sector to the tune of 11.5 million shares, followed by Banks (7.5 million) and Technology (7.2 million) Sectors. MLCF topped the chart with 5.5 million, followed by TRG (5.3 million) and KEL (3.2 million).

    Sectors contributing to the performance include Fertilizer (-135 points), E&P (-115 points), Banks (-83 points), Power (-72 points), O&GMCs (-67 points).

    Volumes increased by from 55.5 million shares to 69 million shares (+24 percent DoD). Average traded value increased by merely 3 percent to reach US$ 14.7 million as against US$ 14.3 million.

    Stocks that contributed significantly to the volumes include MLCF, TRG, KEL, BOP and UNITY, which formed 31 percent of total volumes.

    Stocks that contributed positively include FABL (+5 points), ATLH (+4 points), HBL (+1 points), FHAM (+0 points) and AKBL (+0 points). Stocks that contributed negatively include PPL (-56 points), HUBC (-49 points), ENGRO (-47 points), FFC (-45 points) and OGDC (-30 points).

  • Rupee falls by Rs1.07 via import, corporate payments

    Rupee falls by Rs1.07 via import, corporate payments

    KARACHI: The Pak Rupee weakened by Rs1.07 against dollar on Monday owing to demand for imports and corporate payments.

    The rupee ended Rs159.87 to the dollar as compared with last Friday’s closing of Rs158.80 in interbank foreign exchange market.

    The foreign currency market was initiated in the range of Rs159.00 and Rs159.40 to the dollar. The market recorded day high of Rs159.95 and low of Rs159.40 and closed at Rs159.87.

    Currency analysts said that the payment pressure had further weakened the rupee value.

    The exchange rate in open market also witnessed deterioration in rupee value. The buying and selling of dollar was recorded at Rs159.50/Rs160.50 as compared with previous closing of Rs158.70/Rs159.30 in cash ready market.

  • Analysts forecast 100bps increase in policy rate

    Analysts forecast 100bps increase in policy rate

    KARACHI: The State Bank of Pakistan (SBP) is scheduled to announce its monetary policy on July 16, 2019 (Tuesday) and analysts forecast central bank may increase key policy rate by another 100 basis points.

    Analysts at Arif Habib Limited said that the central bank to increase its policy rate by 100bps to 13.25 percent.

    “Primary reason for this increase in policy rate, in our view, is to keep Real Interest Rates positive in light of rising inflation during 1QFY20 on the back of increase in the prices of administered utilities (electricity and gas).”

    Average inflation for 1QFY20 is expected to settle at 12.11 percent, while a policy rate of 12.25 percent would imply a real interest rate of just 14bps.

    The data for the past 48 months exhibits that average real interest rates have remained approx. 2.3 percent, while under the last IMF program (September 2013 to September 2016) real interest rates hovered at an average of 3.1 percent.

    Therefore, it seems unlikely that the central bank would let the real interest rates go negative or below one percent. The staff report document also states that real interest rates would be kept positive to counter inflation.

    On the external front, persistent Current Account Deficit continues to weigh in on the economy despite a substantial decline in imports.

    For May 2019, CAD has declined by 47 percent YoY to USD1.1 billion. However, in terms of GDP it is still high at 5 percent.

    Therefore, in order to reduce this deficit to a sustainable level, the SBP is expected to increase its policy rate to compress demand further.

    In addition, with the advent of market determined exchange rate, a persistent Current Account Deficit might result in further weakness in exchange rate which might induce further inflation.