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KARACHI – The State Bank of Pakistan (SBP) has reported a positive development in the country’s economic indicators as the liquid foreign exchange reserves increased by $91 million to reach $20.133 billion by the week ending February 26, 2021.
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ISLAMABAD: Pakistan’s trade deficit widened by 9 percent or $17.3 billion during first eight months (July – February) 2020/2021 of the current fiscal due to surge in import bill for the period, according to provisional data released by the ministry of commerce.
The trade deficit widened to 17.3 billion during first eight months of the current fiscal year as compared with $15.87 billion in the same months of the last fiscal year.
Import bill increased to $33.6 billion during the period under review as compared with $31.5 billion in the corresponding period of the last fiscal year, showing an increase of 6.6 percent.
On the other hand, exports posted a growth of 4.2 percent to $16.3 billion during July – February 2020/2021 as compared with $15.64 billion in the same period of the last fiscal year.
Abdul Razak Dawood, Adviser to Prime Minister of Pakistan for Commerce and Investment, in a tweet message commented that most of this growth came from increase in import of raw material and intermediate goods, which increased by 7.8 percent.
The import of capital goods declined by 0.2 percent, while that of consumer goods decreased by 7.3 percent, he added.
“This shows that the Make-in-Pakistan Policy of MOC is delivering dividends and industrial activity in the country is increasing. The import bill this year also increased because we had to import Wheat and Sugar to stabilize the market prices,” he said.
Cotton was also imported to to help the Export-oriented industry so that the exports are not hampered.
During Jul-Feb 2021, the import of Wheat amounted to USD 909 million, Sugar USD 126 million and Cotton USD 913 million (total of USD 1,948 million).
ISLAMABAD: Razak Dawood, Adviser to Prime Minister of Pakistan for Commerce and Investment, on Tuesday said that after a span of nine years the Istanbul-Tehran-Islamabad (ITI) Freight Train will resume operations from March 4, 2021.
In a tweet message, the adviser said that Istanbul-Tehran-Islamabad (ITI) Freight Train will resume operations from March 04, 2021 after nine years.
“It will complete the one-side trip in 12-days, with capacity to move 750 MT of goods.”
This is a testament of friendship between the three countries and will go a long way in facilitating movement of goods between Pakistan, Iran & Turkey.
“I congratulate Senator Azam Swati for making this possible,” he said.
I call on our exporters to take benefit of this alternative route and mode of transport and contact the ministry of commerce for any facilitation.
ISLAMABAD: The finance ministry is hopeful of achieving annual fiscal targets as half year (July – December) 2020/2021 fiscal position indicates that it will remain on track in the remaining half.
The ministry of finance on Monday issued Mid-year Budget Review Report for Fiscal Year 2020/2021. The finance division said that the fiscal consolidation measures taken by the government had resulted in financial discipline, higher revenues and controlled expenditures.
“The same strategy will be followed during the remaining period of the current fiscal year to achieve the fiscal sustainability,” it added.
The continuity in fiscal consolidation, stable exchange rate, improved current account and better financial management, present a promising economic outlook, the finance division said.
It said that the borrowing operations remained quite successful and in-line with the Medium-Term Debt Management Strategy (MTDS FY20 — FY23) of the Government. Government is following the policy of zero borrowing from SBP since July 2019 and is maintaining a cash buffer with SBP for meeting the contingencies/ obligations.
Following are the key highlights:
Similar to last year, domestic borrowing was made entirely from the financial markets during first half of current fiscal year. No borrowing was made from SBP. In fact, an amount of Rs. 285 billion was repaid to SBP during first half of ongoing fiscal year.
All borrowings needed to finance the fiscal deficit were made through longer-term debt while Government retired a portion of short-term debt (T-Bills) by around Rs. 579 billion during this period.
The government introduced various new instruments during first half of the current fiscal year to further develop the government securities market, attract more diversified investor base and to provide more flexibility and options to the investors as well as to the government.
— 3, 5 and 10-year floating rate PIBs with quarterly coupon payment frequency are being issued since October 2020.
— the government has started issuance of 5-year Sukuk with fixed rate rental payments since July 2020.
— The government also introduced 2-year floating rate PIBs in November 2020 with quarterly coupon payment frequency and fortnightly interest rate resetting. Existing Floating Rate PIBs carry interest rate reset of 6-month while interest rate reset in this instrument in only two weeks.
Similar to conventional bond, the government introduced re-opening mechanism in Sukuk auctions in July 2020 to increase liquidity of the Sukuk issue and lower costs for the government.
Considering the encouraging participation and demand from the market in the recent auctions of 15 and 20-year PIBs, the government has decided to issue 30-year PIBs with effect from January 2021.
In order to enhance participation and competition in primary and secondary markets for government debt, the government banned all institutional investors in National Savings Schemes from July 2020; and
Most of the external debt was raised from multilateral and bilateral sources on concessional terms (low cost and longer tenor).
ISLAMABAD: The headline inflation i.e. Consumer Price Index (CPI) increased by 8.7 percent in February 2021 on year on year basis, Pakistan Bureau of Statistics (PBS) said on Monday.
CPI inflation General, increased by 8.7 percent on year-on-year basis in February 2021 as compared to an increase of 5.7 percent in the previous month and 12.4 percent in February 2020.
On month-on-month basis, it increased by 1.8 percent in February 2021 as compared to a decrease of 0.2 percent in the previous month and a decrease of 1.0 percent in February 2020.
CPI inflation Urban, increased by 8.6 percent on year-on-year basis in February 2021 as compared to an increase of 5.0 percent in the previous month and 11.2 percent in February 2020.
On month-on-month basis, it decreased by 2.3 percent in February 2021 as compared to a decrease of 0.2 percent in the previous month and a decrease of 1.1 percent in February 2020.
CPI inflation Rural, increased by 8.8 percent on year-on-year basis in February 2021 as compared to an increase of 6.6 percent in the previous month and 14.2 percent in February 2020. On month-on-month basis, it increased by 1.1 percent in February 2021 as compared to a decrease of 0.3 percent in the previous month and a decrease of 1.0 percent in February 2020.
The Sensitive Price Indicatory (SPI) inflation on YoY increased by 11.9 percent in February 2021 as compared to an increase of 7.7 percent a month earlier and an increase of 14.5 percent in February 2020. On MoM basis, it increased by 3.1 percent in February 2021 as compared to a decrease of 0.8 percent a month earlier and a decrease of 0.8 percent in February 2020.
Wholesale Price Index (WPI) inflation on YoY basis increased by 9.5 percent in February 2021 as compared to an increase of 6.4 percent a month earlier and an increase of 12.7 percent in February 2020. WPI inflation on MoM basis increased by 2.2 percent in February 2021 as compared to an increase of 2.5 percent a month earlier and a decrease of 0.7 percent in corresponding month i.e. February 2020.
ISLAMABAD: Financial Action Task Force (FATF) on Thursday kept Pakistan in its grey list despite acknowledging significant progress made by the country.
“As all action plan deadlines have expired, the FATF strongly urges Pakistan to swiftly complete its full action plan before June 2021,” a statement of the FATF said.
The FATF takes note of the significant progress made on the entire action plan. “To date, Pakistan has made progress across all action plan items and has now largely addressed 24 of the 27 action items,” according to the note.
Since June 2018, when Pakistan made a high-level political commitment to work with the FATF and APG to strengthen its AML/CFT regime and to address its strategic counter-terrorist financing-related deficiencies, Pakistan’s continued political commitment has led to significant progress across a comprehensive CFT action plan, including by: demonstrating that law enforcement agencies are identifying and investigating the widest range of TF activity, demonstrating enforcement against TFS violations, and working to prevent the raising and moving of funds including by controlling facilities and services owned or controlled by designated persons and entities.
Pakistan should continue to work on implementing the three remaining items in its action plan to address its strategically important deficiencies, namely by:
(1) demonstrating that TF investigations and prosecutions target persons and entities acting on behalf or at the direction of the designated persons or entities;
(2) demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions; and
(3) demonstrating effective implementation of targeted financial sanctions against all 1267 and 1373 designated terrorists, specifically those acting for or on their behalf.
KARACHI: The weekly position of foreign exchange reserves of the country eased to $20.042 billion by week ended February 19, 2021, the State Bank of Pakistan (SBP) said on Thursday.
The foreign exchange reserves of the country were at $20.059 billion by week ended February 12, 2021.
The official foreign exchange reserves held by the central bank slightly increased to $12.909 billion by week ended February 19, 2021 as compared with $12.890 billion a week ago.
Similarly, the foreign exchange reserves held by the commercial banks fell to $7.133 billion by week ended February 19, 2021 as compared with $7.169 billion a week ago.
KARACHI: The current account recorded a surplus of $912 million during first seven months of the current fiscal year as compared with a deficit of $2.54 billion in the corresponding months of the last fiscal year, according to balance of payment (BOP) data released by the State Bank of Pakistan (SBP) on Monday.
The balance of trade in goods posted a deficit of $13.74 billion during the first seven months of the current fiscal year as compared with the deficit of $11.598 billion in the corresponding months of the last fiscal year.
The balance of trade in services posted a deficit of $1.115 billion during July – January of the current fiscal year as compared with the deficit of $1.89 billion in the same period of the last fiscal year.
The balance of primary income posted a deficit of $3.06 billion during the first seven months under review as compared with the deficit of $3.612 billion in the same months of the last fiscal year.
The inflow of workers’ remittances grew to $16.477 billion during July – January 2020/2021 as compared with $13.278 billion in the same period of the last fiscal year.
KARACHI: The foreign direct investment FDI) has declined by $432 million or 27 percent during first seven months of the current fiscal year as compared with same months of the last fiscal year, State Bank of Pakistan (SBP) said on Monday.
The net inflows of FDI fell to $1.145 billion during July – January 2020/2021 as compared with $1.577 billion in the corresponding months of the last fiscal year.
The inflows of FDI were at $1.792 billion during the period under review as compared with $2.04 billion in the corresponding period of the last fiscal year. Similarly, the outflows increased by 39.5 percent to $647 million during July – January 2020/2021 as compared with $464 million in the same period of the last fiscal year.
The portfolio investment in the capital market witnessed massive outflow during the period under review. The outflows from the capital market recorded $237 million during first seven months of the current fiscal year as compared with inflow of $21.5 million in the corresponding months of the last fiscal year.
The overall investment, including foreign public investment, fell by 78 percent to $755 million during first seven months of the current fiscal year as compared with $3.438 billion in the corresponding period of the last fiscal year.
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Friday approved tax recommendations for telecom sector, which were already endorsed by the Federal Board of Revenue (FBR).
Secretary, Ministry of Information Technology and Telecommunication presented a summary regarding taxation issues of the Telecom Sector.
The ECC had earlier constituted a sub-committee dated October 20, 2020, under the Chairmanship of the Adviser to the PM Dr. Ishrat Hussain, for due deliberation.
The sub-committee presented its recommendations before ECC. The Committee approved these recommendations as endorsed by FBR.
Federal Minister for Finance and Revenue, Dr. Abdul Hafeez Shaikh, chaired the meeting of the Economic Coordination Committee (ECC) of the Cabinet on Friday.
Federal Minister for National Food Security and Research Syed Fakhar Imam, Federal Minister for Industries and Production Hammad Azhar, Adviser to the PM on Institutional Reforms and Austerity Dr. Ishrat Hussain, SAPM on Revenue Dr. Waqar Masood, SAPM on Power Tabish Gauhar, SAPM on Petroleum Nadeem Babar and Chairman Board of Investment (BOI) Atif Bokhari participated in the meeting.
Ministry of Industries and Production presented a summary before ECC regarding revision of subsidized prices of essential commodities by the Utility Stores Corporation of Pakistan, in accordance with the earlier directive of ECC dated 28 January, 2021.
Secretary, M/o Industries and Production presented various proposals to rationalize prices of wheat flour, sugar and ghee in view of continuous fluctuations in international commodity prices.
After detailed discussion, the ECC approved only partial rationalisation and directed to provide maximum relief to the consumers despite significant price differential between subsidized price offered by the USCs and the prevailing prices in the domestic markets.
This is in compliance with the Prime Minister’s Relief Package-2020 to provide basic commodities at affordable rates through a network of Utility Stores across Pakistan.
ECC also approved another summary by the Ministry of Industries and Production for outstanding payment to M/s Ocean Wide Shipping Services, amounting to USD 0.58 million from Pakistan Steel Mills to fulfill a contractual obligation for transportation of coal during the year 2010.
The ECC considered a summary by the Ministry of Energy (Petroleum Division) regarding tax on payments to the offshore supply contractor to meet the contractual obligation. The ECC established a sub-committee comprising SAPM on Petroleum, Secretary Law Division, Secretary Power Division and FBR with a direction to evaluate the proposal and present workable recommendations before the forum for consideration.
Ministry of Energy presented another summary about revocation of Neelum Jhelum (NJ) surcharge @ Rs.0.10 per KWH electricity consumers. The ECC considered and approved the revocation of Neelum Jhelum surcharge (with immediate effect).
Secretary, Ministry of National Food Security and Research placed a summary before ECC regarding a mechanism for disbursement of subsidies in line with the Prime Minister’s Fiscal Package for Agriculture in the backdrop of COVID-19 pandemic. The summary was approved by the ECC for timely disbursements of subsidies to the Provinces by the M/o NFS&R subject to clearance by the Finance Division.
The ECC also considered and approved a summary regarding Government’s sovereign guarantee for a PSDP project titled National Electronics Complex of Pakistan (NECOP, executed by National Engineering and Scientific Commission.
Following Technical Supplementary Grants were also approved:
• Rs. 550 million for Special Communications Organization (SCO) from Ministry of Information and Technology during the FY 2020-21.
• Rs. 200 million were approved (out of total allocation of RS. 362.239 million) to Special Technology Zones (STZA) during the current financial year.
• Rs. 109 million to Ministry of Information and Broadcasting (MOIB) to clear outstanding Bills related to media campaigns on behalf of Ehsaas Program during FY 2019-20.