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  • Trade deficit narrows by 8.32 percent in July – August

    Trade deficit narrows by 8.32 percent in July – August

    ISLAMABAD: The trade deficit of the country has narrowed by 8.32 percent in the first two months of the current fiscal year owing to decline in import bill during the period under review.

    According to the data released by Pakistan Bureau of Statistics (PBS) on Friday, the trade deficit narrowed to $3.38 billion during July – August of 2020 as compared with $3.69 billion in the same period of the last year.

    The import bill of the country has declined by 6.28 percent to $6.96 billion during the first two months of the current fiscal year as compared with $7.43 billion in the same months of the last fiscal year.

    However, exports have also declined by 4.27 percent to $3.58 billion during the period under review as compared with $3.74 billion in July – August of 2019.

    The torrential rains and urban flooding during the last few days of August 2020 has adversely affected the supply chain, which affected the exports of the country.

    Due to this reason the exports fell by 21 percent to $1.58 billion in August 2020 when compared with $2 billion in previous month.

    In the month under review the imports have also fell by 11 percent to $3.28 billion as against $3.68 billion in July 2020.

    Meanwhile, the exports fell by 15 percent to $1.58 billion in August 2020 when compared with $1.85 billion in August 2019. On the other hand the imports fell by 12 percent to $3.28 billion as compared with $3.72 billion in August 2019.

  • Exports decline by 19.5 percent as rains, urban flooding disrupt supply chain

    Exports decline by 19.5 percent as rains, urban flooding disrupt supply chain

    ISLAMABAD: The exports have registered 19.5 percent decline in August 2020 owing to torrential rains and significant urban flooding in Karachi.

    The exports for the month of August 2020, have recorded a downfall of 19.5 percent, in dollar value terms, as compared to the same period last year.

    This was discussed in an internal review meeting at Ministry of Commerce on Thursday, chaired by the Advisor to the Prime Minister on Commerce and Investment, Abdul Razak Dawood.

    During the same month, the imports have also dropped by 20 percent, in dollar value terms, as compared to August 2019.

    However, the overall trade balance has improved by 20.6 percent in August 2020, as compared to same month last year.

    Despite the decline in August, some of the products, like tractors, iron and steel, chemicals and cement have posted a growth of 186 percent, 100 percent, 90 percent and 30 percent respectively, in dollar value terms, as compared to August 2019.

    It was told in the meeting that due to heavy rains in the country, there were some delays in obtaining and analyzing the data.

    It was further discussed in the meeting that the rains and consequential urban flooding, particularly in Karachi, caused significant problems in the existing infrastructure, disrupting the supply chains and affecting the exports for the month of August.

    Power outages, slowdown in business activities, delays in transportation and hampering of port operations are some of the issues faced by the exporters due to unprecedented monsoon rains in the country.

    Talking in the meeting, the Advisor hoped that the exports would begin to recover in September as normalcy should return to Karachi.

    The advisor noted that although exports have temporarily fallen, the trade balance continues to improve.

    “Exporters are encouraged that despite the calamity of rain and flooding, we must pursue ‘Make in Pakistan’ and export led growth,” the advisor said.

    “I have every confidence in our exporters that they will make up for the loss in the subsequent months”, he added.

    Dawood directed that the Ministry of Commerce must resolve the issues of the exporters on war-footings in these unprecedented times.

  • Foreign exchange reserves increase to $19.84 billion

    Foreign exchange reserves increase to $19.84 billion

    KARACHI: The liquid foreign exchange of the country has increased by $121 million to $19.843 billion by week ended August 28, 2020, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves were at $19.722 billion by week ended August 21.2020.

    The official foreign exchange reserves of the SBP increased by $72 million to $12.713 billion by week ended August 28, 2020 as compared with $12.641 billion a week ago.

    Similarly, the foreign exchange reserves held by commercial banks also increased by $49 million to $7.13 billion by week ended August 28, 2020 as compared with $7.081 billion a week ago.

  • Headline inflation increases by 8.2pc in August

    Headline inflation increases by 8.2pc in August

    ISLAMABAD: The headline inflation based on Consumer Price Index (CPI) increased by 8.2 percent on Year on Year (YoY) basis in August 2020 as compared to an increase in 9.3 percent in the previous month, Pakistan Bureau of Statistics (PBS) said on Tuesday.

    The inflation was also lower than 10.5 percent recorded in August 2019.

    On month-on-month (MoM) basis, it increased by 0.6 percent in August 2020 as compared to an increase of 2.5 percent in the previous month and an increase of 1.6 percent in August 2019.

    CPI inflation Urban, increased by 7.1 percent on year-on-year basis in August 2020 as compared to an increase of 7.8 percent in the previous month and 10.6 percent in August 2019.

    On month-on-month basis, it increased by 0.8 percent in August 2020 as compared to an increase of 2.2 percent in the previous month and an increase of 1.5 percent in August 2019.

    CPI inflation Rural, increased by 9.9 percent on year-on-year basis in August 2020 as compared to an increase of 11.6 percent in the previous month and 10.3 percent in August 2019. On month-on-month basis, it increased by 0.4  percent in August 2020 as compared to an increase of 3.0 percent in the previous month and an increase of 1.9 percent in August 2019.

    The inflation based on Sensitive Price Indicator (SPI) on YoY increased by 11.7 percent in August 2020 as compared to an increase of 13.7 percent a month earlier and an increase of 12.1 percent in August 2019. On MoM basis, it increased by 0.9 percent in August 2020 as compared to an increase of 3.0 percent a month earlier and an increase of 2.7 percent in August 2019.

    Wholesale Price Index (WPI) inflation on YoY basis increased by 3.3 percent in August 2020 as compared to an increase of 3.2 percent a month earlier and an increase of 14.1 percent in August 2019.

    WPI inflation on MoM basis increased by 1.3 percent in August 2020 as compared to a decrease of 5.4 percent a month earlier and an increase of 1.2 percent in corresponding month of last year i.e. August 2019.

  • Pakistan records current account surplus of 1.9pc to GDP in July

    Pakistan records current account surplus of 1.9pc to GDP in July

    KARACHI: The balance of payment of the country registered current account surplus i.e. 1.9 percent of the GDP during the first month of the current fiscal year, according to statistics released by State Bank of Pakistan (SBP) on Monday.

    The BOP witnessed a current account deficit of 2.8 percent of the GDP in July 2019.

    The statistics revealed that the current account surplus stood at $424 million in July 2020 as compared with current account deficit of $613 million in the same month of the last year.

    The current account surplus may be attributed to record inflows of workers’ remittances in July 2020. In the month under review the workers’ remittances rose to $2.77 billion. This is the highest ever level of remittances in a single month in Pakistan, according to the SBP.

    The exports also exhibited 6.1 percent growth to $2 billion in July 2020 as compared with $1.88 billion in the same month of the last year. On the other hand the import bill of the country declined by 0.7 percent to $3.68 billion in July 2020 as compared with $3.71 in the same month of the last year.

    The trade deficit narrowed by 7.7 percent to $1.68 billion in July 2020 as compared with the deficit of $1.83 billion in the same month of the last year.

  • Inflation increases more for persons with lower buying power

    Inflation increases more for persons with lower buying power

    ISLAMABAD: Persons with lower buying power have witnessed sharp increase in inflation for week ended August 20, 2020 as compared with the same week a year ago.

    According to data of Sensitive Price Indicator (SPI) issued by Pakistan Bureau of Statistics (PBS), the inflation increased more for persons having less buying powers and the inflation is lower for those persons have sufficient money to buy essential items.

    The PBS categorized five expenditure groups to assess the price movement of essential items on weekly basis.

    The data shows the trend of inflation amongst the expenditure groups as:

    For expenditure group up to Rs17,732: inflation increased by 11.49 percent by the week ended August 20, 2020 when compared with week ended August 22, 2019.

    For expenditure group between Rs17,733 and Rs22,888: inflation increased by 11.22 percent by the week ended August 20, 2020 when compared with week ended August 22, 2019.

    For expenditure group between Rs22,889 and Rs29,517: inflation increased by 10.05 percent by the week ended August 20, 2020 when compared with week ended August 22, 2019.

    For expenditure group between Rs29,518 and Rs44,175: inflation increased by 9.20 percent by the week ended August 20, 2020 when compared with week ended August 22, 2019.

    For expenditure group above Rs44,175: inflation increased by 6.98 percent by the week ended August 20, 2020 when compared with week ended August 22, 2019.

  • Foreign exchange reserves increase to $19.655 billion

    Foreign exchange reserves increase to $19.655 billion

    KARACHI: The liquid foreign exchange reserves of the country increased by $137 million to $19.655 billion by week ended August 13, 2020, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $19.518 billion by week ended August 07, 2020.

    The foreign exchange reserves held by the central bank also increased by $139 million to $12.608 billion by week ended August 13, 2020 as compared with $12.469 billion a week ago.

    The SBP attributed the increase in reserves to proceeds of $249.4 million from Asian Infrastructure Investment Bank (AIIB). Meanwhile, during the week, SBP also made government external debt repayments of $151.0 million.

    The foreign exchange reserves held by commercial banks slightly down by $2 million to $7.047 billion by week ended August 13, 2020 as compared with $7.049 billion a week ago.

  • Mark-up rate for general provident fund announced

    Mark-up rate for general provident fund announced

    ISLAMABAD: The ministry of finance on Tuesday announced 12 percent mark-up rate on State Provident Fund i.e. General Provident Fund (GP Fund) for fiscal year 2019/2020.

    The mark-up rate has been reduced to 12 percent for fiscal year 2019/2020 as against 14.35 percent for the fiscal year 2018/2019.

    The mark-up rate for GP Fund for fiscal year 2017/2018 was 11.70 percent and for fiscal year 2016/2017 the rate was 11.3 percent.

  • Foreign exchange reserves eases to $19.518 billion

    Foreign exchange reserves eases to $19.518 billion

    KARACHI: The liquid foreign exchange reserves of the country have declined by $45 million to $19.518 billion by week ended August 07, 2020, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves of the country were at $19.563 billion by week ended July 30, 2020.

    The official reserves of the SBP slipped by $73 million to $12.469 billion by week ended August 07, 2020 as compared with $12.542 billion a week ago.

    The central bank attributed the decline in foreign exchange reserves to scheduled payment of external debt.

    However, the foreign exchange reserves held by commercial banks increased by $28 million to $7.049 billion by week ended August 07, 2020 as compared with $7.021 billion a week ago.

  • Pakistan’s fiscal deficit narrows to 8.1 percent in FY20

    Pakistan’s fiscal deficit narrows to 8.1 percent in FY20

    KARACHI: Pakistan’s budget deficit narrowed to 8.1 percent in FY20 (2019/2020) as compared with the deficit of 8.9 percent in the preceding fiscal year, according to statistics released by the ministry of finance on Wednesday.

    Analysts Topline Securities said that as the deficit is lower than the 9.1 percent of GDP envisaged by the government owing to lower utilization of the Rs1.24 trillion COVID-19 relief package. Reportedly around Rs480 billion could not be spent during the year.

    The primary deficit for the year clocked in at 1.8 percent of GDP or Rs757 billion (last year was 3.5 percent of GDP or Rs1,354 billion).

    In 4QFY20, the fiscal deficit came in at 4.3 percent of GDP compared to 9MFY20 fiscal deficit of 3.8 percent of GDP due to implications of COVID-19 on both revenues and expenditures.

    Sindh and Baluchistan recorded a budgetary surplus during FY20, with  Punjab and KPK recording budgetary deficits during the period.

    Total Revenues increased by 28 percent YoY in FY20, where the improvement was led by 257 percent YoY higher Non-Tax Revenues which includes Rs936 billion surplus profit from SBP.

    The Tax Revenues increased by only 6 percent YoY during the year, where they declined by 12 percent YoY in 4QFY20 owing to COVID-19 outbreak. The government collected 5 percent YoY higher Direct Taxes, 9 percent YoY higher Sales Tax and 42 percent YoY higher Petroleum Levy during FY20.

    In 4QFY20, as expected due to lockdown Direct Taxes and Sales Tax were down by 16 percent YoY and 15 percent YoY, respectively while Petroleum Levy was up 47 percent YoY.

    On the expenditures front, Total Expenditure increased by 16 percent YoY in FY20. Current Expenditure increased by 20 percent YoY, where Mark-up Payments were up 25 percent YoY and Defense Expenditures were up 6 percent YoY.

    In 4QFY20, Current Expenditure is up by 55 percent QoQ and 27 percent YoY due to COVID-19 related expenses.

    The Development Expenditure remained steady (-1 percent YoY) in FY20, with 4QFY20 expenses rising by 37 percent QoQ but down 21 percent YoY.

    In spite of the decline in interest rates, government interest bill increased by 24 percent QoQ and 17 percent YoY during 4QFY20 owing to greater borrowing at higher rates and interest payment schedule.

    The analysts estimated that Pakistan’s fiscal deficit to clock in at around 8.5 percent of GDP in 2020/2021 due to continuing implications of COVID-19.