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  • 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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  • Current account posts $662 million deficit in December

    Current account posts $662 million deficit in December

    Pakistan’s balance of payments recorded a current account deficit of $662 million in December 2020, breaking a streak of five consecutive months of surplus, according to data released by the State Bank of Pakistan (SBP) on Wednesday.

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  • Ministry approves DLTL claims worth Rs213 million: Razak Dawood

    Ministry approves DLTL claims worth Rs213 million: Razak Dawood

    ISLAMABAD: The ministry of commerce has approved Rs213 million against claims of drawback of local taxes and levies (DLTL) by non-textile sector, Abdul Razak Dawood, Adviser to Prime Minister for Commerce and Investment.

    “These are now with State Bank of Pakistan (SBP) and will soon be disbursed to the relevant exporters,” the adviser said this on his official twitter account.

    “Our policy is not to put any working capital constraints for our exporters, he said.

    “I hope that this will facilitate them” he added.

  • Foreign investment drops by 72 percent in first half

    Foreign investment drops by 72 percent in first half

    KARACHI: The inflow of foreign investment into Pakistan has dropped by 72 percent during first half (July – December) of fiscal year 2020/2021 due to outflows from debt securities and equity market.

    The total foreign investment fell to $514.5 million during first half of the current fiscal year as compared with $1.83 billion in the corresponding half of the last fiscal year, State Bank of Pakistan (SBP) said on Monday.

    Foreign private investment – the major component of total foreign investment into the country – fell by 48.5 percent during the first half of the current fiscal year. The foreign private investment declined to $708 million during July – December 2020/2021 as compared with $1.37 billion in the corresponding period of the last fiscal year.

    The total foreign direct investment (FDI) fell by 30 percent to $953 million during the half under review as compared with $1.35 billion in the corresponding half of the last fiscal year.

    The investment in capital market witnessed outflow of $244 million during the first half of the current fiscal year as compared with inflow of $18.8 million in the same half of the last fiscal year.

    The investment in debt securities also witnessed outflow of $194 million during July – December 2020/2021 as compared with inflow of $452 million during the same period of the last fiscal year.

  • Finance minister directs monitoring consumer price of sugar

    Finance minister directs monitoring consumer price of sugar

    ISLAMABAD: Dr. Abdul Hafeez Sheikh, Federal Minister for Finance and Revenue, has directed authorities to monitor consumer price of sugar through the country besides focusing on stocks and supply position of the commodity.

    The finance minister chaired the meeting of the National Price Monitoring Committee (NPMC) on Monday.

    The finance minister directed ministry of industries and production to continuously monitor stocks of sugar, its supply position in the market and prices throughout the country for the consumers.

    Minister for National Food Security & Research Syed Fakhar Imam, Federal Minister for Industries and Production Hammad Azhar, Adviser to the PM on Commerce Abdul Razak Dawood, SAPM on Revenue Dr. Waqar Masood, Provincial Chief Secretaries, Secretary M/o Industries and Production, Additional Secretary M/o NFS&R, Additional Secretary Ministry of Planning, Development and Special Initiatives, Chairman FBR, Member CCP, Chairman TCP, MD USC, Member IT/HRM & Member National Accounts from PBS and senior officers of the Finance Division participated in the meeting.

    The National Price Monitoring Committee (NPMC) reviewed the price trend of essential commodities especially wheat, sugar and edible oil during the week.

    Finance Secretary briefed the meeting that weekly SPI registered a decline of 0.22 percent and the main drivers behind decrease in SPI are falling prices of eggs, tomatoes, potatoes, onions and chicken. Prices of 21 basic items remained stable whereas 07 items registered a decline during the week.

    The ministry of National Food Security and Research (NFS&R) apprised NPMC that all stakeholders are on board with reference to existing position of wheat stock in the country.

    The Federal Minister for National Food Security and Research assured all possible measures would be taken to ensure smooth supply of wheat across the country.

    The Finance Minister directed the provincial governments to follow a self-sustaining model and streamline daily release of wheat to ensure steady supply in the provinces as well as districts.

    The Federal Minister for Industries and Production Hammad Azhar updated NPMC about the recent decline in international prices of palm oil which will eventually reduce the upward pressure on the prices of edible oil in the domestic market.

    Member PBS updated NPMC about the benefits of recently developed dashboard of prices of essential items and progress on its implementation in coordination with the provinces.

    The NPMC directed PBS to provide necessary support to the provinces to make the system fully functional for vigilant monitoring of prices of essential commodities and to remove price disparity across the country.

    The Finance Minister directed M/o NFS&R to chalk out a comprehensive strategy to ensure smooth supply of wheat flour at reasonable rates for the general public.

    He also urged the provincial governments to continue taking necessary steps to ensure provision of basic items at affordable prices across the country.

  • Country’s foreign exchange reserves inch up

    Country’s foreign exchange reserves inch up

    KARACHI: The liquid foreign exchange reserves of the country slightly increased by $7 million to $20.519 billion by the week ended January 08, 2021, the State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $20.512 billion by the week ended December 31, 2020.

    The official reserves of the SBP slipped by $12 million to $13.4 billion by the week ended January 08, 2021, as compared with $13.412 billion a week ago.

    The foreign exchange reserves maintained by the commercial banks increased by $19 million to $7.119 billion by the week ended January 08, 2021, as compared with $7.1 billion a week ago.