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  • Budget deficit widens to 2.5 percent in first half: finance ministry

    Budget deficit widens to 2.5 percent in first half: finance ministry

    ISLAMABAD: The budget deficit has widened to 2.5 percent of the GDP during first half (July – December) of the current fiscal year 2020/2021 as compared with the deficit of 2.3 percent in the corresponding half of the last fiscal year, according to statistics released by the ministry of finance on Wednesday.

    According to the details, the total revenue was at Rs3,351 billion during the first half of the current fiscal year. Meanwhile, total expenditures was at Rs4,489 billion in the same period of the current fiscal year. Therefore, budget deficit stood at Rs1,138 billion or 2.5 percent of the GDP.

    The total tax revenue was recorded at Rs2,456 billion during the first half of the current fiscal year.  Out of which the contribution of the federal government was Rs2,210 billion and the rest Rs246 billion was by the provincial governments.

    The non-tax revenue was recorded at Rs895 billion out of which federal government contributed Rs484 billion and the provincial governments share was at Rs47 billion.

    The current expenditure has increased to Rs4,029 billion out of which the government’s mark up payments against loans were at Rs1,475 billion and defence expenditures were at Rs486 billion.

    The government spent Rs458 billion on development expenditure during the first half of the current fiscal year.

    The total revenue collection to GDP ratio during first half of the current fiscal year was at 7.4 percent. The total expenditure to GDP ratio was at 9.9 percent.

  • ECC approves renewal of gas supply agreement between SSGC, Fauji Fertilizer

    ECC approves renewal of gas supply agreement between SSGC, Fauji Fertilizer

    ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Wednesday approved the renewal agreement of gas supply between Sui Southern Gas Company (SSGC) and Fauji Fertilizer Bin Qasim Limited.

    Federal Minister for Finance and Revenue, Dr. Abdul Hafeez Shaikh, chaired the meeting of the ECC of the Cabinet.

    Federal Minister for Planning, Development and Special Initiatives Asad Umar, Federal Minister for Interior Sheikh Rasheed Ahmad, Minister for Privatization Muhammad Mian Soomro, 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 Federal Minister for Energy Omar Ayub Khan participated in the meeting.

    Petroleum Division placed a summary before ECC regarding renewal of Gas supply Agreement (GAS) between Sui Southern Gas Company Limited and Fauji Fertilizer Bin Qasim Limited.

    After detailed discussion, the ECC approved with a condition that renewal would be allowed on “as and when available basis” for a period of 05 years. SSGCL may restore the gas supplies to M/S Fauji Fertilizer till December, 2021 or until a uniform rate for the whole fertilizer sector is formulated after rationalization of tariffs (whichever is earlier).

    The ECC considered and approved another summary by the Petroleum Division for re-allocation of gas from Saqib-1A Well located in District Ghotki, Sindh Province to M/S Sui Southern Gas Company Limited from its previous allocation to SNGPL (as approved earlier by the ECC dated 06-10-2009). The price of gas will be as per the applicable Petroleum policy.

    Petroleum Division also moved a summary for removal of Dividend Distribution cap on Mari Gas Company Limited (MPCL) under Gas Pricing Agreement as the company is being considered for privatization.

    After due deliberation, the ECC allowed that the dividend distribution cap may be removed to ensure that the divestment transaction generates optimum sale proceeds for the Government.

    The Committee further decided that MPCL would ensure dividend distribution in accordance with the Provisions of Companies Act, 2017 and the Companies (Distribution of Dividends) Regulations, 2017.

    On the recommendation of the Ministry of Housing and Works, the ECC allowed the Ministry to utilize its own funds equal to Rs. 377.21 million for renewal of lease of Garden West (Pakistan Quarters), Karachi.

    The following Technical Supplementary Grants (TSGs) were approved by the ECC:

    a) Rs. 141.308 million to Ministry of Information and Broadcasting for an expenditure incurred on media campaigns to create awareness among public during COVID-19 pandemic.

    b) Rs. 9.025 million to Ministry of Information and Broadcasting for a media campaign on occasion of Kashmir Solidarity Day – 05 Feb. 2021.

    c) Rs. 5 million for purchase of spare parts for helicopter maintenance by HQs Pakistan Rangers (Punjab).

    d) Rs. 25 million for purchase of spare parts for helicopter maintenance by HQs Frontier Corps Balochistan (South).

    e) Rs. 10 million for repair and maintenance of helicopter by HQs Frontier Corps KP (South), D.I.Khan.

  • Headline inflation grows by 5.7 percent in January

    Headline inflation grows by 5.7 percent in January

    ISLAMBAD: The headline inflation based on Consumer Price Index (CPI) has increased by 5.7 percent in the month of January 2021, according to data released by Pakistan Bureau of Statistics (PBS).

    The headline inflation in January 2021 was increased when compared to an increase of 8.0 percent in the previous month and 14.6 percent in January 2020.

    On month-on-month basis, it decreased by 0.2 percent in January 2021 as compared to a decrease of 0.7 percent in the previous month and an increase of 2.0 percent in January 2020.

    CPI inflation Urban, increased by 5.0 percent on year-on-year basis in January 2021 as compared to an increase of 7.0 percent in the previous month and 13.4 percent in January 2020. On month-on-month basis, it decreased by 0.2 percent in January 2021 as compared to a decrease of 0.3 percent in the previous month and an increase of 1.7 percent in January 2020.

    CPI inflation Rural, increased by 6.6 percent on year-on-year basis in January 2021 as compared to an increase of 9.5 percent in the previous month and 16.3 percent in January 2020. On month-on-month basis, it decreased by 0.3 percent in January 2021 as compared to a decrease of 1.2 percent in the previous month and an increase of 2.4 percent in January 2020.

    Sensitive Price Indicator (SPI) inflation on YoY increased by 7.7 percent in January 2021 as compared to an increase of 9.1 percent a month earlier and an increase of 18.3 percent in January 2020. On MoM basis, it decreased by 0.8 percent in January 2021 as compared to a decrease of 2.7 percent a month earlier and an increase of 0.5 percent in January 2020.

    Wholesale Price Index (WPI) inflation on YoY basis increased by 6.4 percent in January 2021 as compared to an increase of 5.7 percent a month earlier and an increase of 15.4 percent in January 2020. WPI inflation on MoM basis increased by 2.5 percent in January 2021 as compared to an increase of 0.3 percent a month earlier and an increase of 1.8 percent in corresponding month i.e. January 2020.

  • Pensioners to undergo biometric verification twice a year; rules amended

    Pensioners to undergo biometric verification twice a year; rules amended

    ISLAMABAD: Pensioners are required to undergo biometric verification twice in a year in order to continue withdrawal of pension amount.

    The Finance Division on Friday issued SRO dated January 28, 2021 to notify amendments in the Federal Treasury Rules.

    As per the amendments, a pensioner drawing pension shall be bound to undergo biometric verification on National Database and Registration Authority (NADRA) system from any branch of a bank maintaining his pension account, every year in the months of March and October or provide a life certificate signed by a person authorized, if he is unable to undergo biometric verification due to incapacitation by bodily illness, infirmity or if his fingerprints do not exist due to old age or a genetic condition.

    Authorities shall obtain declaration yearly from pensioners whose pension is terminable by their marriage or re-marriage and shall be attached to the bills for pension paid for September, however, this requirement shall be dispensed with after attaining by the pensioner the age of sixty years.

    The disbursing officer must take special precautions to prevent imposition and must, at least once a year, receive proof of life or proof of continued existence of the pensioner, through NADRA’s biometric verification at any branch of a bank maintaining his pension account, which shall be conclusive proof of the continued existence of the pensioner.

    “Any pensioner who is incapacitated by bodily illness or infirmity from so going to any branch of a bank for biometric verification or whose finger prints no longer exist due to old age or infirmity or a genetic condition, that pensioner shall give written request for exemption and for that pensioner, the disbursing officer shall allow proof of life through life certificate as conclusive proof of his continued existence.”

    The disbursing officer shall be responsible for any payment wrongly made and in all cases of doubt, he must consult the Accountant General.

    “If a pensioner drawing pension fails to submit a life certificate or fails to undergo NADRA’s biometric verification during the months of March and October or he does not draw his pension for consecutive six months, his account shall become dormant.”

  • Foreign exchange reserves ease to $20.106 billion

    Foreign exchange reserves ease to $20.106 billion

    KARACHI: The liquid foreign exchange reserves of the country fell slightly by $14 million to $20.106 billion by week ended January 22, 2021, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $20.12 billion by week ended January 15, 2021.

    The official reserves of the central bank witnessed a decline of $16 million to $12.998 billion from $13.014 billion a week ago.

    The foreign exchange reserves held by commercial banks increased to $7.108 billion by week ended January 22, 2021 as against $7.106 billion a week ago.

  • Remittances to remain strong for financing trade deficit: finance ministry

    Remittances to remain strong for financing trade deficit: finance ministry

    ISLAMABAD: The ministry of finance on Monday hoped the inflows of remittances to remain strong enough to support the financing of the trade deficit in coming months.

    In its monthly economic update and outlook – January 2021, the ministry said that the sudden surge in imports due to the increase in international oil prices and import of additional food products enhanced imports by $ 1.2 billion alone in December 2020 ($ 5.0 billion) compared to December 2019 ($ 3.8 billion).

    “However, there was no pressure on foreign reserves as Current Account remained in surplus for H1 FY 2021. Looking forward, depending on these explanatory factors, imports may remain $ 4.5 – $ 5.0 billion in next month,” the ministry said.

    Exports are expected to stabilize around current levels, it added.

    “But in the baseline scenario, the trade balance is not expected to further deteriorate. Remittance inflows remain strong and continue to provide strong support to the financing of the trade deficit,” the ministry said.

    The finance ministry said that Pakistan’s economy consecutively suffered from Balance of Payment (BOP) crisis and COVID-19 pandemic kept economy below its potential level.

    Since the start of current fiscal year, economy has started recovering. The government is committed to monitor external balance and its financing closely.

    Furthermore, the government has also taken policy and administrative measures to monitor the supply and market functioning wherever necessary to mitigate inflationary pressure.

    The restoration and acceleration of Pakistan’s productive capacity is a necessity to ensure a high and sustainable growth in the near and longer term. In the near future, the economic recovery is expected to translate into more productive investment expenditures.

    The government is committed to motivate investments in crucial sectors of the economy to enhance productive capacities and to stimulate economic growth.

    Fiscal performance remained satisfactory. Currently, the fiscal policy actions are primarily concentrated on relief measures to support businesses stay afloat and to protect vulnerable segments of society.

    At the same time, the government is focused on containing the fiscal deficit at a manageable level and keeping the primary balance at a sustainable level.

    According to latest fiscal numbers, healthy growth in non-tax revenues, satisfactory performance of FBR tax collection despite issuance of higher number of refunds and controlling of expenditures other than mark-up payments and COVID related would pave the way to maintain the fiscal deficit within the reasonable limits in coming months, the ministry said.

    The finance ministry said that the current outlook ensures economic revival on the basis of continued recovery seen in recent months but there is possibility of slower economic activities especially in services sector depending on the intensity and duration of pandemic.

  • Foreign investors repatriate $892 million during 1HFY21

    Foreign investors repatriate $892 million during 1HFY21

    KARACHI: The foreign companies operating in Pakistan have repatriated around $892 million as profit and dividend during first half (July – December) of fiscal year 2020/2021 (1HFY21), according to data released by State Bank of Pakistan (SBP) on Tuesday.

    The repatriation of profit and dividend was 6.7 percent higher when compared with $836 million in the same half of the last fiscal year.

    An amount of $840 million was repatriated during the first half of the current fiscal year against foreign direct investment (FDI) as compared with $743 million in the same half of the last fiscal year, showing an increase of 13 percent.

    The repatriation of funds against portfolio investment, however, fell to $52.2 million as during the half under review as compared with $93 million in the same half of the lat fiscal year.

    Major repatriation was witnessed in food sector which recorded $172.9 million against the total foreign investment during July – December 2020/2021 as compared with $54.6 million in the same period of the last fiscal year.

    The foreign companies engaged in telecommunications repatriated around $105 million during the first half of the current fiscal year as against $26 million in the same half of the last fiscal year.

    The repatriation of profit and dividend by companies in financial businesses reduced to $133.5 million during the half under review as compared with $155.6 million in the same half of the last fiscal year.

    The profit repatriation by beverage companies also witnessed increase to $39 million during the period under review as compared with $28 million in the corresponding period of the last fiscal year.

  • Housing loan: SBP launches complaint resolution portal

    Housing loan: SBP launches complaint resolution portal

    KARACHI: The State Bank of Pakistan (SBP) has launched a compliant resolution portal in order to resolve complaints of potential customers under Markup Subsidy Scheme for affordable housing initiated by the government.

    Prime Minister Imran Khan chaired a meeting of National Coordination Committee on Housing, Construction and Development (NCCHCD) in Islamabad on Thursday.

    Governor State Bank, Dr. Reza Baqir, presented key features of an online complaint resolution mechanism developed by the SBP to resolve complaints of potential customers under Government’s Markup Subsidy Scheme for affordable housing.

    The prime minister appreciated the development of a user friendly and comprehensive complaint resolution mechanism to assist common persons who would like to borrow under this Scheme.

    The complaint resolution mechanism comprises an IT based portal supported by a comprehensive network of State Bank and commercial bank staff to take care of problems faced by applicants of low cost and affordable housing finance.

    The IT portal has been made live for registration of complaints. This major initiative will help financially excluded low and middle-income segments who often find it difficult to access the formal financial sector, which is a key goal of the SBP.

    The system will help in resolving complaints within a predefined timeline with proper escalation mechanism.

    The potential customers can already access existing systems and procedures of banks for resolution of their complaints. The complaint resolution mechanism developed by State Bank is a move to improve effectiveness and transparency in complaint redressal process.

    In line with Government’s vision of making housing finance affordable, State Bank has, on October 12, 2020, issued Government’s Mark-up Subsidy for Housing Finance to facilitate provision of subsidized finance to low and middle-income individuals.

    The features of Markup Subsidy Facility can be seen at https://www.sbp.org.pk/smefd/circulars/2020/C11.htm.

    The State Bank is making efforts with the support of banking industry to ensure that the benefits of the markup subsidy scheme reaches targeted customers of banks who currently do not own a house.

    On the advice of State Bank of Pakistan, the banks have designated around 50% of their branches for provision of financing under this facility. With this, more than 7,700 branches of banks across the country have been designated to process financing of approaching customers under this scheme, while rest of the branches in the network will act as referral points for the designated branches.

    With the launch of portal, customers can now register their concerns by simply putting minimum details on the online service portal accessible at https://servicedesk.sbp.org.pk/.

    A short video is also available on this portal to explain how complaints may be lodged and followed up. In case applicants face difficulties in using this portal or need further clarification they are welcome to visit the offices of SBP BSC in 15 major cities where special Help Desks are available to guide and assist, list of offices is available at https://www.sbp.org.pk/sbp_bsc/FieldOff.asp.

    In order to facilitate resolution of complaints received under the Markup Subsidy Service Portal, State Bank has created a network of regional focal persons in State Bank BSC regional offices. The banks have also nominated their regional focal persons across the regions in the country where State Bank offices are present.

    To ensure the complaint resolution mechanism resolves issues in a timely manner, it is going to be monitored at the highest level within the State Bank. Low cost housing finance customers are encouraged to record their complaints if they experience any difficulty in their loan application with commercial banks.

  • Foreign exchange reserves fall by $399 million to $20.12 billion

    Foreign exchange reserves fall by $399 million to $20.12 billion

    KARACHI: The liquid foreign exchange reserves of the country fell by $399 million to $20.12 billion by week ended January 15, 2021, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $20.519 billion by week ended January 08, 2021.

    The official reserves of SBP also fell by $386 million to $13.014 billion by week ended January 15, 2021 as compared with $13.4 billion a week ago.

    The central bank attributed the decline in reserves to external debt repayments.

    The reserves held by commercial banks also eased by $13 million to $7.106 billion by week ended January 15, 2021 as compared with $7.119 billion a week ago.

  • ECC abolishes value added sales tax, reduces advance tax to 0.25pc on sugar import

    ECC abolishes value added sales tax, reduces advance tax to 0.25pc on sugar import

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved removal of value added sales tax and reduction of withholding income tax to nominal 0.25 percent on import of white sugar.

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