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  • PIA restructuring plan to be presented before federal cabinet after tax liability reconciliation

    PIA restructuring plan to be presented before federal cabinet after tax liability reconciliation

    ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Wednesday recommended to present restructuring plan of Pakistan International Airlines Corporation Limited (PIACL) before the federal cabinet after reconciliation of tax liabilities.

    Sources in Large Taxpayers Office (LTO) Karachi said that billions of rupee as tax liability was pending against the PIACL.

    Federal Minister for Finance, Revenue, Industries and Production, Muhammad Hammad Azhar, chaired the meeting of the ECC.

    After detailed consultation, the ECC recommended the restructuring plan of PIACL for onward submission before the Cabinet, after reconciliation of tax liability figures, with a direction to place a cap on future debt which PIACL could take against its improved balance sheet, once restructuring plan is implemented.

    Earlier, the Aviation Division submitted a summary before the ECC regarding restructuring plan of the Pakistan International Airlines Corporation Ltd (PIACL).

    The Adviser to the Prime Minister for Institutional Reforms and Austerity made a detailed presentation on human resource and operational restructuring of the PIACL.

    He drew attention to the various options for restructuring and outlined measures to minimize losses and transform PIACL into a financially viable entity.

    It included human resource restructuring through Voluntary Separation Scheme (VSS), hiring Aviation experts, fleet modernization, routes rationalization, product development and revenue enhancement measures.

    Power Division presented a summary for a one-time grant to GENCOs for onward payment to DISCOs regarding the actuarial value of pension and pensionary benefits of surplus employees and also taking over the liability for payment of pension to existing pensioners of power plants which are decided to be closed immediately by the Cabinet Committee on Energy (CCOE).

    After seeking detailed input from relevant stakeholders, the Committee directed the Power Division to deliberate further and present options for cost optimization regarding pension liabilities.

    The Following Technical Supplementary Grants were approved by the ECC: –

    • Rs.330 million for the Ministry of Defence for the maintenance of aircrafts.

    • Rs.2382 million for the Ministry of Federal Education and Professional Training for the Prime Minister’s Special Package to implement “Skill for All” strategy for TVET sector.

    • Rs.1 billion for the Finance Division to refund the balance amount of funds of Insaf Imdad Ehsas Program.

    • Rs.382.280 million for the Ministry of Energy for completion of development schemes of Sindh and Balochistan provinces under PSDP.

    • Rs.150 million for the Ministry of Housing and Works for funding civil works on different schemes in Balochistan, under PSDP.

    • Rs.30 million for the Board of Investment for different operational expenses.

    • Rs.280 million for the Ministry of Information Technology and Telecommunications for consultancy and implementation of Internet voting (I-voting).

    Federal Minister for Planning, Development and Special Initiatives Asad Umar, Federal Minister for Energy Omar Ayub Khan, Federal Minister for Privatization Muhammad Mian Soomro, Minister for National Food Security and Research Syed Fakhar Imam, Advisor to the Prime Minister for Institutional Reforms and Austerity Dr. Ishrat Hussain, Advisor to the Prime Minister for Commerce Abdul Razzak Dawood, SAPM on Power Tabish Gauhar, SAPM on Revenue Dr. Waqar Masood, Federal Secretaries, Governor State Bank of Pakistan Reza Baqir, Chairman BOI and other senior officials participated in the meeting.

  • Import bill sharply grows by 70pc in March

    Import bill sharply grows by 70pc in March

    ISLAMABAD: The import bill has recorded an unprecedented growth of 70 percent in March 2021 as compared with the same month of the last year, according to data released by Pakistan Bureau of Statistics (PBS).

    The country spent $5.63 billion on the imports during March 2021 as compared with $3.31 billion in the same month of the last year.

    Experts attributed the phenomenal rise in import bill during March 2021 due to significant decline in foreign trade in the same month of the last year because of restrictions imposed after coronavirus spread.

    In March 2020 the government put a complete lockdown throughout the country in order to prevent spread of COVID-19.

    Similarly in the month of March 2021, the exports recorded a sharp increase of 30.44 percent to $2.36 billion as compared with $1.81 billion in the same month of the last year.

    Pakistan’s trade deficit has widened by 20 percent in first nine months (July – March) 2020/2021 owing to surge in import bill after ease in coronavirus related restrictions.

    The trade deficit ballooned to $20.83 billion during first nine months of the current fiscal year as compared with $17.35 billion in the corresponding period of the last fiscal year.

    The import bill for the period of July – March 2020/2021 increased to $39.51 billion as compared with $34.79 billion in the corresponding period of the last fiscal year, showing a rise of 13.57 percent.

    On the other hand exports also increased by 7.12 percent to $18.68 billion during the first nine months of the current fiscal year as compared with $17.44 billion in the corresponding period of the last fiscal year.

  • Headline inflation increases by 9.1 percent in March

    Headline inflation increases by 9.1 percent in March

    ISLAMABAD: Headline inflation based on Consumer Price Index (CPI) has increased by 9.1 percent on year on year basis in March 2021 as compared to an increase of 8.7 percent in February 2021 and 10.2 percent in March 2020, Pakistan Bureau of Statistics (PBS) said on Thursday.

    On month-on-month basis, it increased by 0.4 percent in March 2021 as compared to an increase of 1.8 percent in the previous month and an increase of 0.02 percent in March 2020.

    CPI inflation Urban, increased by 8.7 percent on year-on-year basis in March 2021 as compared to an increase of 8.6 percent in the previous month and 9.3 percent in March 2020.

    On month-on-month basis, it increased by 0.3 percent in March 2021 as compared to an increase of 2.3 percent in the previous month and an increase of 0.1 percent in March 2020.

    CPI inflation Rural, increased by 9.5 percent on year-on-year basis in March 2021 as compared to an increase of 8.8 percent in the previous month and 11.7 percent in March 2020.

    On month-on-month basis, it increased by 0.5 percent in March 2021 as compared to an increase of 1.1 percent in the previous month and a decrease of 0.1 percent in March 2020.

    Sensitive Price Indicator (SPI) based inflation on YoY increased by 18.7 percent in March 2021 as compared to an increase of 11.9 percent a month earlier and an increase of 11.8 percent in March 2020.

    On MoM basis, it increased by 5.7 percent in March 2021 as compared to an increase of 3.1 percent a month earlier and a decrease of 0.3 percent in March 2020.

    Wholesale Price Index (WPI) based inflation on YoY basis increased by 14.6 percent in March 2021 as compared to an increase of 9.5 percent a month earlier and an increase of 9.3 percent in March 2020.

    WPI inflation on MoM basis increased by 3.7 percent in March 2021 as compared to an increase of 2.2 percent a month earlier and a decrease of 0.9 percent in corresponding month i.e. March 2020.

  • Pakistan’s foreign exchange reserves increase by $401 million to $20.836 billion

    Pakistan’s foreign exchange reserves increase by $401 million to $20.836 billion

    KARACHI – In a significant development, Pakistan’s liquid foreign exchange reserves witnessed a robust increase of $401 million, reaching $20.836 billion by the week ending March 26, 2021, according to the State Bank of Pakistan (SBP).

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  • Monthly exports in March 2021 highest in decade: Razak Dawood

    Monthly exports in March 2021 highest in decade: Razak Dawood

    In a significant economic development, Pakistan’s exports soared to $2.345 billion in March 2021, marking a remarkable 13.4 percent increase compared to February 2021.

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  • ECC approves cotton, yarn import from India

    ECC approves cotton, yarn import from India

    ISLAMABAD: Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved import of cotton and yarn from India.

    This was disclosed by Abdul Razak Dawood, Adviser to Prime Minister of Pakistan for Commerce and Investment, in a tweet.

    “To keep the momentum of our value-added exports, ECC in its meeting held today approved import of Cotton and Cotton Yarn from India, including land route,” he said, adding that this would now be placed before the Cabinet for approval, after which it will be notified.

    The adviser said that the ECCP also approved the formation of a National Export Development Board (NEDB).

    The board will be chaired by the Prime Minister Imran Khan and will also include ministers, exporters, investors and the business community, the adviser said this on his official twitter account.

    He said the NEDB became the main forum to discuss the strategy, incentives and removal of business hurdles.

  • Pakistan receives $498.7 million IMF tranche

    Pakistan receives $498.7 million IMF tranche

    KARACHI: Pakistan has successfully received a tranche of $498.7 million under the Extended Fund Facility (EFF) from the International Monetary Fund (IMF), as confirmed by the State Bank of Pakistan (SBP) on Tuesday.

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  • Hammaz Azhar given Finance Minister portfolio

    Hammaz Azhar given Finance Minister portfolio

    ISLAMABAD: Hammaz Azhar has been named new Finance Minister of the country. Hammad Azhar, who is presently federal minister for industries and production, has confirmed his new assignment through a tweet on Monday.

    “I am honored to be entrusted with the additional charge of finance by the prime minister,” Hammad Azhar said in the tweet.

    “Pakistan’s economy has made significant gains towards stabilization since 2018. We shall continue to consolidate these gains and strengthen the growth momentum,” he added.

    Earlier, Senator Shibli Faraz confirmed the changes in the finance ministry.  The government decided to remove Dr Abdul Hafeez Shaikh from the post of finance minister and replace him with Minister for Industries and Production Hammad Azhar, Faraz told a private TV channel.

    He said that Prime Minister Imran Khan decided to bring in a new finance team in view of the inflation that had taken place.

    Hammad is the third finance minister of PTI government.

    Prime Minister Imran Khan gave the portfolio of finance to Hammad Azhar who is a young and able minister so that he devises policies according to the ground realities of Pakistan and the poor get relief, according to Faraz.

  • Foreign exchange reserves increase to $20.435 billion

    Foreign exchange reserves increase to $20.435 billion

    The State Bank of Pakistan (SBP) reported a rise in the country’s liquid foreign exchange reserves, which increased by $276 million to reach $20.435 billion by the week ending March 19, 2021.

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  • IMF relaxes requirements on Pakistan’s FY 2016 misreporting

    IMF relaxes requirements on Pakistan’s FY 2016 misreporting

    Washington, DC: International Monetary Fund (IMF) on Wednesday said that the Pakistani authorities have shown strong commitment in providing accurate data in future so the Executive Board of the IMF decided not to require further remedial action in connection with the breach obligations.

    A statement issued by the IMF said that the Executive Board of the International Monetary Fund (IMF) approved a 39-month Extended Arrangement under the Extended Fund Facility (EFF) for Pakistan in the amount of SDR 4,268 billion (about US$6 billion), equivalent to 210 percent of quota, on July 3, 2019.

    The first review under the arrangement was completed by the Executive Board on December 19, 2019, based upon, inter alia, the reported observance of the quantitative performance criteria (PC) at end-September 2019, including the amount of government guarantees. Upon completion of the first review under the EFF, Pakistan made a purchase equivalent to SDR 328 million (about US$452.4 million).

    Subsequently, new information that came to the authorities’ attention, and which was shared with Fund staff, has revealed that the data on government guarantees dating back to FY 2016 was reported inaccurately.

    The revised data indicates a nonobservance of the PC on government guarantees at end-September 2019 by a margin of Rs357 billion (about 0.9 percent of GDP), which resulted in a non-complying purchase and a breach of obligations under Article VIII, Section 5 of the IMF Articles of Agreement.

    The authorities previously reported that the PC had been met with a margin of PRs 55 billion (0.1 percent of GDP) at end-September 2019. The statistical revision only had a small impact on public debt.

    The authorities have taken strong corrective actions to address institutional and technical short-comings that gave rise to the inaccurate information, including:

    (i) creating a working group to reconcile and cross-check guarantees and debt data;

    (ii) announcing additional functions for the Debt Policy Coordination Office (DPCO), including to act as custodian of all guarantees issued by the federal government; and

    (iii) publishing a semi-annual debt bulletin that consolidates key debt statistics. Beyond these actions, the authorities have committed to include a list of all new guarantees expected to be issued in the FY 2022 budget submitted to Parliament.

    At the conclusion of the meeting, Deputy Managing Director Antoinette Sayeh and Acting Chair, stated:

    “The Executive Board of the International Monetary Fund (IMF) reviewed Pakistan’s remedial actions and data revisions linked to a noncomplying purchase under the Extended Arrangement under the Extended Fund Facility as well as a breach of obligations under Article VIII, Section 5. The non-complying purchase arose as a result of a lack of inter-agency coordination in the compilation of government guarantees provided by the federal government to state-owned enterprises that contributed to incorrect estimates of government guarantees starting as far back as FY 2016.

    In view of the strong and proactive commitment by Pakistan to provide timely and accurate data to the IMF in the future, the Executive Board decided not to require further remedial action in connection with the breach of obligations under Article VIII, Section 5.

    As the authorities have taken appropriate corrective measures since the purchase in December 2019, the Executive Board also granted a waiver for the nonobservance of the quantitative performance criterion.”