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  • Trade deficit widens by 24pc in February

    Trade deficit widens by 24pc in February

    ISLAMABAD: The trade deficit has been widened by 24 percent Year on Year (YoY) in February 2021 owing to increase in imports and decline in exports, according to data released by Pakistan Bureau of Statistics (PBS) on Friday.

    The import bill for the month of February 2021 increased to $4.56 billion as compared with $4.16 billion in the corresponding month of the last year, showing an increase of 9.55 percent.

    However, the exports fell by 4.12 percent to $2.05 billion in February 2021 when compared with $2.13 billion in the same month of the last year.

    The trade deficit widened by 10.64 percent to $17.536 billion in first eight months (July – February) 2020/2021 when compared with the deficit of $15.85 billion in the corresponding months of the last fiscal year.

    The imports posted 7.49 percent growth to $33.84 billion during first eight months of the current fiscal year as compared with $31.48 billion in the corresponding months of the last fiscal year.

    The exports registered an increase of 4.29 percent to $16.3 billion during July – February 2020/2021 as compared with $15.63 billion in the corresponding period of the last fiscal year.

  • Foreign exchange reserves increase to $20.133 billion

    Foreign exchange reserves increase to $20.133 billion

    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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  • Trade deficit widens to $17.3bn in July – February

    Trade deficit widens to $17.3bn in July – February

    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).

  • Istanbul-Tehran-Islamabad freight train resumes operation on March 04: Razak

    Istanbul-Tehran-Islamabad freight train resumes operation on March 04: Razak

    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.

  • Finance ministry hopes achieving annual fiscal targets

    Finance ministry hopes achieving annual fiscal targets

    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).

  • Headline inflation increases by 8.7pc in February

    Headline inflation increases by 8.7pc in February

    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.

  • FATF keeps ‘grey’ status for Pakistan despite significant progress

    FATF keeps ‘grey’ status for Pakistan despite significant progress

    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.

  • Weekly foreign exchange reserves ease to $20.042 billion

    Weekly foreign exchange reserves ease to $20.042 billion

    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.

  • Foreign direct investment plunges by 27 percent in seven months

    Foreign direct investment plunges by 27 percent in seven months

    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.