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KARACHI: The current account deficit of the country has widened to $5.08 billion during July – October of fiscal year 2021/2022.
According to the balance of payment released by the State Bank of Pakistan (SBP) on Friday the current account deficit during first four months of the current fiscal year widened to $5.08 billion as compared with a surplus of $1.31 billion in the same months of the last year.
During the first four months of the current fiscal year the import bill surged by 64 per cent to $25.1 billion as compared with $15.17 billion in the same months of the last fiscal year.
The exports of the country registered an increase of 25 per cent to $9.46 billion during first four months of the current fiscal year as compared with $7.57 billion in the corresponding months of the last fiscal year.
However, trade deficit widened by 106 per cent to $15.64 billion during first four months of the current fiscal year as compared with the deficit of $7.6 billion in the corresponding months of the last year.
Meanwhile, the inflows of remittances grew by 12 per cent during the first four months of the current fiscal year over the same period last year.
Workers’ remittances increased to $10.55 billion during July – October of the current fiscal year as compared with $9.23 billion in the same period of the last year.
The current account deficit in October 2021 has been recorded at $1.66 billion as compared with the deficit of $1.13 billion in September 2021.
KARACHI: The inflation based on Sensitive Price Indicator (SPI) has increased by 18.34 per cent for the week ended November 18, 2021 over the same week a year ago, according to data issued by the Pakistan Bureau of Statistics (PBS) issued on Friday.
The year on year trend depicts increase of 18.34 per cent, LPG (76.12 per cent), Electricity for Q1 (75.32 per cent), Vegetable Ghee 1 Kg (56.94 per cent), Cooking Oil 5 litre (56.28), Mustard Oil (55.42 per cent), Vegetable Ghee 2.5 Kg (52.94 per cent), Petrol (44.35 per cent), Diesel (40.21 per cent), Washing Soap (37.70 per cent) and Chilies Powdered (34.18 per cent).
Major decrease in prices observed in Onions (38.61 per cent), Pulse Moong (28.80 per cent), Potatoes (26.55 per cent), Tomatoes (6.34 per cent) and Sugar (3.51 per cent).
The SPI for the current week ended on November 18, 2021 recorded an increase of 1.07 per cent. Increase in the prices of Chicken (8.26 per cent), Cooking Oil 5 litre (4.72 per cent), Bananas (4.18 per cent), Washing Soap (3.94 per cent), Vegetable Ghee 2.5 kg (3.15 per cent), Vegetable Ghee 1 kg (2.38 per cent), Rice Irri (1.76 per cent), Pulse Moong (1.62 per cent), Eggs (1.52 per cent), Fire Wood (1.24 per cent) and Tea Prepared (1.21 per cent), was observed with joint impact of (0.78 per cent) into the overall SPI for combined group of (1.07 per cent).
On the other hand, decrease observed in the prices of Tomatoes (5.77 per cent), Sugar (4.25 per cent), Onions (2.14 per cent), Gur (1.48 per cent), Potatoes (1.36 per cent), Pulse Masoor (0.43 per cent), Garlic (0.13 per cent), Wheat Flour & LPG (0.08 per cent) each and Pulse Gram (0.02 per cent).
During the week, out of 51 items, prices of 27 (52.94 per cent) items increased 10 (19.61 per cent) items decreased and 14 (27.45 per cent) items remained stable.
ISLAMABAD: Pakistan and Iran have reached an agreement and barter trade between the two countries will start in a month, a top official said on Thursday.
This was stated by the Commerce Secretary before the Standing Committee on Commerce of the Senate.
To the question of Senator Fida Mohammad, the Commerce Secretary apprised the Standing Committee on Commerce, which met here at Parliament House on Thursday under the Chairmanship of Senator Zeeshan Khanzada, that being on the grey list had not any negative concussion on Pakistan’s exports.
Due to the lack of banking channels with Iran, there exist some issues in trading with Tehran. The barter trade issue with Iran has been resolved, he informed.
An agreement has been reached with Iran regarding barter trade, he added further. He said that barter trade with Iran would start in a month.
Commerce Adviser, Razzaq Dawood briefed the Committee on GSP Plus status( Generalised Scheme of Preferences). He noted that Pakistan’s exports to Europe have reached 9 billion dollars.
The Commerce Adviser informed the committee that the European Union (EU) was assuaged with Pakistan’s implementation of the GSP Plus terms.
Pakistan had kowtowed with most of the 27 conventions. He underlined that Pakistan had already addressed issues like eradication of Child Labour, Freedom of Speech, Rights of journalists, Rights of Women, and others as per assigned indicators.
He asserted that the EU asked for expanding the range of exports to European markets but exports to the EU have not inflated as they should have because of weaknesses of our exporters.
While responding to a question asked by the Chairman Committee, Abdul Razzaq Dawood remarked that under GSP Plus, 66 per cent of Pakistan’s tariff lines were on zero duties. EU exports increased by 47 per cent, he said, adding that trade with the EU is in Pakistan’s interest.
For maximum participation of all members and inclusive discussion, the detailed deliberation on GSP plus status and briefing by the Pakistan Cotton Standards Institute (PCSI) were recessed for the next meeting.
The Commerce Adviser also lauded the role of the Senate Standing Committee on Commerce in passing the (Geographical Indications) GI Act.
Apart from Senator Fida Mohammad, Senator Saleem Mandviwala, the commerce Adviser Abdul Razzaq Dawood, Secretary Commerce, Additional Secretary Commerce, and officials from Pakistan Cotton Standards Institute attended the meeting.
KARACHI: The liquid foreign exchange reserves of the country slipped by $476 million to $23.55 billion by the week ended November 12, 2021, the State Bank of Pakistan (SBP) said on Thursday.
The foreign exchange reserves of the country were at $24.026 billion by the week ended November 05, 2021.
The official reserves of the SBP also fell by $381 million to $16.945 billion by the week ended November 12, 2021, as compared with $17.326 billion a week ago.
The foreign exchange reserves maintained by commercial banks also declined by $95 million to $6.605 billion by the week ended November 12, 2021, as compared with $6.7 billion a week ago.
Miftah Ismail, Former Federal Minister for Finance, has pointed out key reasons behind the massive depreciation in Pak Rupee (PKR) against the dollar.
Ismail, who is also General Secretary of PML-N Sindh, in his Tweet on Sundh pointed out a thread on the four main reasons for the recent precipitous decline in the value of the rupee.
A: Uncertainty about the renewal of the IMF program
B: Largest trade deficit and fastest-growing imports in history
C: Fourth highest inflation rates among major countries.
D: Rapid increase in the money supply.
Ismail explained that uncertainty about the renewal of the IMF program behind the rupee weakness.
The former finance minister said: “Our program was ‘revived’ earlier this year and we were supposed to get a $1 billion tranche in July 2021. We are now in November and still, there isn’t an agreement. This is giving markets jitters.”
In his opinion largest trade deficit and fastest-growing imports are the second major reason for the rupee fall.
“We are on track for imports of $75 billion or over 24 per cent of the GDP. Both these are the highest in history. This year exports will cover only 37 per cent of imports, down from 44 per cent in 2018. We are moving in the wrong direction.”
Our trade deficit in on track to be $47 billion or 15 per cent of the GDP. Again both numbers are highest in the history. Current account deficit will be around 5 per cent of the GDP. But for the healthy remittances due to decreased travel etc. we would have recorded the second-highest current account deficit
The former finance minister said that in our history, after the one of 8.1 per cent in 2007/2008, the last year of Gen. Musharraf. The increased net demand of dollars from foreign trade is thus putting pressure on the Pak rupee. “Until we slow down imports or increase exports, the rupee will continue to be under pressure.”
Another reason highlighted by the former finance minister is the highest inflation rates among major countries.
A recent issue of The Economist showed that Pak has the fourth-highest inflation among major counties, two of whom we don’t even have much trade with. “We also have the highest inflation in South Asia.”
Given that our inflation is more than our trading partners, our exports goods become more expensive and import goods become cheaper. This increases our real effective exchange rate and puts pressure on the rupee.
Miftah Ismail continued that our money supply has grown from Rs 4.7 trillion to Rs 7 trillion, an increase of 49 per cent.
Dr Hafeez Pasha estimates that a 1 per cent increase in money forces a 0.6 per cent rise in inflation. The primary cause of money supply increase is record-high government budget deficits.
“There are other reasons for the continuous devaluation, political uncertainty for one, but these four —-interlinked as they are— I think are the major reasons.”
Federal Minister for Energy Hammad Azhar in his tweet replied to Miftah Ismail saying: “I thought Miftah sahib was reminiscing about PML-N’s economy. Back then they managed to create such conditions without Covid shocks. The truth is that trade deficit now has risen due to price effect (same goods but more $ outflow due to high prices) rather than volume effect.”
KARACHI: Pakistani workers living abroad have sent $2.52 billion as remittances to their homeland in the month of October 2021, State Bank of Pakistan (SBP) said on Sunday.
The SBP said that the workers’ remittances continued their strong streak as inflows recorded $2.5 billion in October 2021, up 10.2 percent (y/y) and only marginally lower compared to last month (5.7 percent).
In addition to remaining above $2 billion since June 2020, this is the eighth consecutive month when remittances have been close to or above $2.5 billion.
On a cumulative basis, remittances have risen to $10.6 billion during the first four months of FY22 (July-October 2021), which is 11.9% higher than the same period last year.
Remittance inflows during the first four months of FY22 have mainly been sourced from Saudi Arabia ($ 2.7 billion), UAE ($ 2.0 billion), UK ($ 1.5 billion) and USA ($ 1.1 billion).
Proactive policy measures by the Government and SBP to incentivize the use of formal channels and altruistic transfers to Pakistan amid the pandemic have positively contributed towards the sustained improvement in remittance inflows since last year.
ISLAMABAD: The inflation based on Sensitive Price Indicator (SPI) has recorded 17.37 per cent increase Year on Year (YoY) by week ended November 11, 2021, said Pakistan Bureau of Statistics (PBS) on Friday.
The SPI is computed on weekly basis to assess the price movements of essential commodities at shorter interval of time so as to review the price situation in the country.
SPI comprises of 51 essential items collected from 50 markets in 17 cities of the country.
Analysts said that the SPI inflation is 37-week high level.
The year on year trend depicts increase of 17.37 per cent, LPG (74.70 per cent), Electricity for Q1 (75.32 per cent), LPG (74.82 per cent), Mustard Oil (54.71 per cent), Vegetable Ghee 1 Kg (53.29 per cent), Cooking Oil 5 litre (49.24 per cent), Vegetable Ghee 2.5 Kg (48.27 per cent), Petrol (41.94 per cent) and Diesel (37.78 per cent)
The major item that witnessed decrease in prices YoY basis are included: decrease observed in the prices of Onions (40.40 per cent), Pulse Moong (30.50 per cent), Potatoes (19.64 per cent), Sugar (2.22 per cent) and Pulse Mash (1.50 per cent).
The SPI for the current week ended on November 11, 2021 recorded an increase of 1.81 per cent over the previous week. Increase in the prices of Tomatoes (18.70 per cent), Diesel (6.04 per cent), Petrol (5.78 per cent), Cooking Oil 5 litre (4.27 per cent), Vegetable Ghee 2.5 kg (3.37 per cent), Vegetable Ghee 1kg (3.28 per cent), Banana (3.04 per cent), Bread (2.84 per cent), Electricity for Q1 (2.74 per cent), Eggs (1.82 per cent), Potatoes (1.77 per cent), Washing Soap (1.58 per cent), Onions (1.51 per cent), Energy Saver (1.30 per cent) and Mustard Oil (1.21 per cent) was observed with joint impact of (1.61 per cent) into the overall SPI for combined group of (1.81 per cent).
On the other hand, decrease observed in the prices of Sugar (9.35 per cent), Pulse Mash (0.45 per cent), Pulse Moong (0.42 per cent), Pulse Gram (0.29 per cent), Wheat Flour Bag (0.26 per cent) and Garlic (0.04 per cent).
During the week, out of 51 items, prices of 30 (58.82 per cent) items increased 06 (11.76 per cent) items decreased and 15 (29.42 per cent) items remained stable.
The analysts said that looking at the trend of SPI inflation, the headline inflation based on Consumer Price Index (CPI) likely to enter double digit in November 2021. The average inflation for the current fiscal year could be in double digit as well, they added.
ISLAMABAD: Saudi Arabia will disburse cash deposits to Pakistan under assistance package pledged on October 26, 2021, Saudi diplomat said on Thursday.
While talking to the Pakistan’s state media Saudi Ambassador Nawaf Bin Said Al-Malki said Saudi Arabia will disburse cash deposits under the pledged financial assistance after approval of the Royal Court and signing of a Memorandum of Understanding (MoU) in a few days.
“This will be soon InshaAllah. There will be the agreement from the Royal Court and the MoU will be signed in a few days for the payment, and also for the deferred oil payment [facility],” the Saudi envoy said in an exclusive interview with APP, during his visit to the headquarters.
Saudi Arabia had recently announced to provide Pakistan $3 billion as a cash deposit with the State Bank to address its balance-of-payments crisis. Also, the Kingdom had pledged a one-year deferred payment facility for the import of oil, worth up to another $1.2 billion.
Ambassador Al-Malki said the government of Saudi Arabia considered Pakistan as “a dear country” with a very deep and strong relationship.
He said Saudia Arabia always stood with Pakistan and extended support to it on multiple occasions, adding that the relationship with Pakistan was regardless of any government in power.
“Our connection is with the Pakistani flag and we consider it our brotherly country,” he said, adding that he saw a “very bright future of Pakistan”.
The Saudi ambassador mentioned the camaraderie between the Saudi Crown Prince Mohammed Bin Salman and Prime Minister Imran Khan and expressed confidence that the relationship would strengthen in the future.
In three years, the six visits of PM Imran Khan to the Kingdom reflect the level of relationship, he added.
The Saudi envoy said Pakistani people loved the Kingdom of Saudi Arabia from the core of their hearts and held in high esteem the Custodian of the holy mosques.
KARACHI: Pakistan’s foreign exchange reserves have increased by $100 million to $24.026 billion by the week ended November 05, 2021, as compared with $23.926 billion a week ago, State Bank of Pakistan (SBP) said on Thursday.
The official foreign exchange reserves of the central bank increased by $126 million to $17.326 billion by the week ended November 05, 2021when compared with $17.2 billion a week ago.
Meanwhile, the foreign exchange reserves held by the commercial banks fell by $26 million to $6.7 billion by week ended November 05, 2021 as compared with $6.726 billion a week ago
In this regard a financing agreement amounting to $761.5 million has been signed between the Ministry of Economic Affairs, Government of Pakistan and International Islamic Trade Finance Corporation (ITFC) for import of crude oil, refined petroleum products and LNG etc.
The financing agreement was signed by Mian Asad Hayaud Din, Secretary, EAD and Eng. Hani Salem Sonbol, CEO, ITFC. The facility has been made effective immediately and ready for utilization by Pakistan State Oil Company Ltd (PSO), Pak Arab Refinery Ltd (PARCO) and Pakistan LNG Ltd (PLL) for import of oil and gas.
This Syndicated Murabaha Financing facility of $ 761.5 million is for a period of one year and is a part of umbrella Framework Agreement signed with ITFC in June 2021 for total envelop of $ 4.5 billion ($ 1.5 million annually) for a period of three-years.
Originally, ITFC had agreed to provide the financing of US$ 300 million. However, due to growing energy needs of the country and enhanced confidence level of international financial institutions on economic reforms and recovery amid COVID-19 pandemic, the financing was over-subscribed by 2.5 times i.e. from $ 300 million to from $ 761.5 million.
The financing facility will also be helpful in financing oil and gas import bill of the country and easing of pressure on foreign exchange reserves of the country.
Mian Asad Hayaud Din, Secretary, EAD appreciated the support for ITFc for arranging US$ 761.5 million for trade financing. He lauded the efforts of Eng. Hani Salem Sonbol, CEO, ITFC and his team for making this transaction successful.
The ITFC and GOP have also agreed to continue their cooperation in future to mobilize financial resources to support Pakistan in its endeavours to achieve its economic growth targets through ITFC financing facility.
