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  • 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.

  • Pakistan’s foreign exchange reserves up by $651 million

    Pakistan’s foreign exchange reserves up by $651 million

    KARACHI: The liquid foreign exchange reserves of the country increased by $651 million by week ended July 30, 2020 owing to foreign inflows, State Bank of Pakistan (SBP) said on Thursday.

    The total foreign exchange reserves of the country increased by $651 million to $19.563 billion by week ended July 30, 2020 as compared with $18.912 billion a week ago.

    The official foreign exchange reserves of the SBP increased by $566 million to $12.542 billion by week ended July 20, 2020 as compared with $11.976 billion a week ago.

    The SBP attributed the increase to the inflows from multilateral and bilateral agencies including US$ 505.5 million received from World Bank.

    The foreign exchange reserves held by commercial banks registered $85 million increase to $7.021 billion by week ended July 30, 2020 as compared with $6.936 billion a week ago.

  • Exports surge by 25 percent: PBS

    Exports surge by 25 percent: PBS

    ISLAMABAD: The exports of the country increased by 25 percent in July 2020 as compared with the previous month owing to enhance in economic activities after ease in lockdown, according to data released by Pakistan Bureau of Statistics (PBS) on Wednesday.

    The country’s exports were at $2 billion in July 2020 as compared with $1.59 billion in June 2020.

    The rise in exports may be attributed to ease in lockdown and resumption of economic activities during July 2020. The lockdown was imposed since March 2020 to prevent the spread of coronavirus.

    The import bill during July 2020 fell by 2 percent to $3.64 billion as compared with $3.72 billion in June 2020.

    The trade deficit shrank by 22.64 percent to $1.64 billion in July 2020 as compared with deficit of $2.12 billion in June 2020.

    The exports in July 2020 registered an increase of 6.04 percent when compared with $1.88 billion in July 2019.

    The import bill in July 2020 fell by 2 percent when compared with $3.7 billion in July 2019.

    The trade deficit reduced by 10.24 percent in July 2020 when compared with deficit of $1.82 billion in July 2019.

  • Exports exhibit growth in July after four months decline

    Exports exhibit growth in July after four months decline

    ISLAMABAD: The exports of the country registered growth of 5.8 percent in July 2020, in dollar value terms, as compared to July 2019.

    This growth was recorded after a decline in exports for the last four months, since March 2020, when there was a drop of 8 percent compared to same period last year.

    This declined widened in April 2020, with a drop of 54 percent in exports, which improved but remained at 35 percent in May 2020, improving further to only 6 percent fall in exports in June 2020, as compared to same period last year.

    This was revealed at a meeting chaired by Advisor to the Prime Minister on Commerce and Investment, Abdul Razak Dawood, at Ministry of Commerce on Tuesday, to review the recent trade statistics and devise plans for improving the exports.

    The meeting was attended by senior officers of the Ministry.

    The latest statistics of exports and imports of Pakistan were reviewed in the meeting.

    The strategies for product and geographical diversification were also reviewed in the meeting, in context of the recent trade statistics.

    One of the major sectors which showed good progress is Food Processing sector where a growth of over 300 percent was observed in July 2020.

    Similar growth was witnessed in Made-Upsand Clothing Accessories sectors.

    In addition, Fish and Fish Products sector recorded a healthy growth of 50 percent, while Home Textiles sector, which was declining in the previous months, is now back up with 24 percent growth.

    In terms of exports, a major decline is witnessed in rice and cement, which fell down to 24 percent and 12 percent respectively in July 2020, as compared to same period last year.

    There is also a decline in the export of raw leather and cotton yarn, which is a clear indication that the Government’s policy to pursue value-added exports is showing results.

    On the import side, a decline of 4.2 percent, in dollar value terms, was recorded in July 2020, as compared to July 2019.

    Due to this increase in exports and decline in imports, a 14.7 percent improvement in trade balance is witnessed in July 2020 as compared to July 2019.

    On the geographical diversification, not much progress has been shown in July 2020 as the exports still seem to be heavily dependent on traditional export markets.

    Talking in the meeting, Abdul Razak Dawood appreciated the exporters as well as the government departments for coordinating their efforts in the testing times during the ongoing pandemic.

    He added that this achievement is particularly noteworthy because of the fact that a decline was being observed until the last month and a turnaround of around 12 percentage points has been achieved in just one month.

    Dawood underlined that the Ministry of Commerce will be evaluating its geographical diversification in order to re-align the focus towards new opportunities.

    He also advised the Ministry officers to extend all kind of necessary support to the exporters in order to achieve the targets, not only in terms of numbers but also with regards to intended policy outcomes.

  • World Bank appoints Najy Benhassine as country director for Pakistan

    World Bank appoints Najy Benhassine as country director for Pakistan

    ISLAMABAD: World Bank has appointed Najy Benhassine as new Country Director for Pakistan effective August 1. He succeeds Illango Patchamuthu, who completed his term on July 31, a statement said on Monday.

    Benhassine most recently served as Regional Director for Equitable Growth, Finance and Institutions in the Middle East and North Africa. Prior to this, he was Director for the Finance, Competitiveness & Innovation Global Practice.

    Since joining the World Bank in 2001, he has worked extensively on economic development, finance, private sector development and impact evaluations.

    Benhassine’s appointment comes at a time when the government of Pakistan is confronting both the immediate and longer-term health and economic impacts of the COVID-19 crisis.

    “It is critical that we help protect the lives and livelihoods of the people of Pakistan and support economic recovery in the wake of the COVID-19 pandemic,” said Benhassine.

    “My first priority is to ensure that World Bank support helps to not only alleviate the immediate health and economic impacts of the crisis but at the same time support the Government’s ambitious social and economic reform program to promote a more resilient and inclusive economy so that Pakistan can build back better.”

    The World Bank portfolio in Pakistan includes 56 active projects amounting to approximately $11 billion.

    The portfolio supports reforms and investments to strengthen institutions, particularly in fiscal management and human development; multi-sectoral initiatives in children’s nutrition, education and skills, irrigated agriculture, tourism, disaster risk management, and urban development; and clean energy, and social and financial inclusion.

    The World Bank is supporting the government of Pakistan through COVID-19 emergency response projects totaling almost half a billion to help the country prevent, detect and respond to the pandemic and strengthen public health preparedness.

  • Headline inflation grows by 9.3pc in July

    Headline inflation grows by 9.3pc in July

    ISLAMABAD: The headline inflation based on Consumer Price Index (CPI) has increased by 9.3 percent on Year-on-Year (YoY) basis in July 2020, according to data released by Pakistan Bureau of Statistics (PBS) on Monday.

    The latest increase was compared to an increase of 8.6 percent in the previous month and 8.4 percent in July 2019.

    On month-on-month (MoM) basis, it increased by 2.5 percent in July 2020 as compared to an increase of 0.8 percent in the previous month and an increase of 1.8 percent in July 2019.

    CPI inflation Urban, increased by 7.8 percent on year-on-year basis in July 2020 as compared to an increase of 7.6 percent in the previous month and 8.7 percent in July 2019.

    On month-on-month basis, it increased by 2.2 percent in July 2020 as compared to an increase of 0.7 percent in the previous month and an increase of 2.0 percent in July 2019.

    CPI inflation Rural, increased by 11.5 percent on year-on-year basis in July 2020 as compared to an increase of 10.0 percent in the previous month and 7.9 percent in July 2019.

    On month-on-month basis, it increased by 2.9 percent in July 2020 as compared to an increase of 1.0 percent in the previous month and an increase of 1.6 percent in July 2019.

    Sensitive Price Indicator (SPI) inflation on YoY increased by 13.5 percent in July 2020 as compared to an increase of 11.5 percent a month earlier and an increase of 8.9 percent in July 2019.

    On MoM basis, it increased by 2.8 percent in July 2020 as compared to an increase of 1.4 percent a month earlier and an increase of 1.0 percent in July 2019.

    Wholesale Price Indicator (WPI) inflation on YoY basis increased by 3.2 percent in July 2020 as compared to an increase of 0.9 percent a month earlier and an increase of 13.3 percent in July 2019.

    WPI inflation on MoM basis increased by 5.4 percent in July 2020 as compared to a decrease of 0.3 percent a month earlier and an increase of 3.1 percent in corresponding month of last year i.e. July 2019.