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Prime Minister Imran Khan announced on Tuesday that the government plans to sell state-owned land in major cities to overseas Pakistanis. This move aims to generate essential financial resources for the country.
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In a bid to alleviate the financial burden caused by the coronavirus outbreak, the federal government has introduced a comprehensive support package for small industrial and commercial units.
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KARACHI: The Sindh government has released an amount of over Rs2 billion under coronavirus emergency fund, which included funds for filed isolation center and distribution of ration.
According to details released by Sindh Finance Department regarding expenses issued date April 24, 2020 to dilute the economic impact of coronavirus and fight against the pandemic.
The details showed that an amount of Rs1.08 billion has been spent as special grant for distribution of ration to poor. The provincial government has spent Rs580 million for disbursement to all Deputy Commissioners (DCs) for distribution of ration to daily wagers.
Another amount of Rs500 million has been disbursed to all the DCs for distribution of ration to poor/ daily wages who are economically affected by spread of coronavirus.
The provincial government released an amount of Rs300.79 million to Indus Hospital Karachi. While another amount of Rs100 million has been released to director health services Hyderabad.
The Sindh government released fund of Rs134 million for setting up field isolation centre at Expo Center Karachi.
An amount of Rs30 million has been released for procurement of coronavirus rapid test kits. Further Rs50 million has been released for procurement of 2000 detection Kit CE-IVD marked Cat No. Z-Path. The provincial government also released an amount of Rs32.34 million for procurement of personal protection equipment (PPE).
An amount of Rs50 million has been released to health department secretariat. The provincial government issued funds amounting Rs50 million to DC Malir Karachi, Rs60 to DC Sukkur and Rs5 million to DC Larkana.
ISLAMABAD: The second meeting of think tank on Saturday discussed the viability of reducing General Sales Tax (GST) from existing 17 percent to five percent on consumer goods to kick start consumer spending.
Advisor to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Sheikh chaired the 2nd meeting of the Thinktank, recently constituted under the directions of Prime Minister, to deliberate on the Covid-19 related economic downturn and mitigation of ensuing risks.
The forum discussed the need and scope for bailout package for large businesses and exporters apart from gauging the viability of reduction of GST on consumer goods, from 17 percent to 5 percent, to kick-start consumer spending for next two years.
The constraints of FBR amid high revenue targets in a shrinking economy were highlighted by Finance Secretary. Decision in this regard would be made after detailed consultations.
The forum has been mandated to provide platform for collective thinking on the emerging situation resulting from the Covid-19 related medical crisis and its spillover to economy.
Its other members include Shaukat Tareen, Dr. Ishrat Husain, Dr. Ijaz Nabi, Sultan Ali Allana, Arif Habib, Dr. Waqar Masood. Advisor to PM on Commerce and Finance Secretary are also part of it.
After extensive deliberations on emerging themes, the forum identified key areas for policy interventions, including monetary affairs and banking sector, fiscal matters and public finances, social safety nets, SMEs and large businesses, commodity prices, public health challenges and role of private sector and NGOs.
Advisor to PM on Finance apprised the forum about developments at G-20 forum regarding debt relief package. There is potential for USD 1.8 billion debt deferment for one year under this, whereas proceeds worth USD 1.4 billion under IMF have already been received.
Participants highlighted the need for further downward revision in policy rate coupled with passing on the benefits of slashed oil prices in global market to public. The focus of the deliberations remained on strengthening of aggregate demand and supply of the economy, with emphasis on lower income groups and small firms.
Need for further liquidity for banks was discussed as strong and vibrant banking sector is essential to boost economy under such strong recessionary headwinds. Ways to further encourage remittances, agriculture financing and timely lifting of crops and vegetables from small farmers were analyzed.
The progress of ongoing cash disbursements under Ehsas program were shared. The need for gathering reliable data on recently laid-off works and timely cash transfers to the most vulnerable were emphasized.
Economists within the Think-tank stressed for the need of designing PSDP to facilitate labor intensive projects apart form crafting robust agriculture financing plans. The need for public private partnerships was elaborated to create fiscal space within public sector through these off-balance sheet financing arrangements which encourage private sector participation in public sector initiatives.
Professionals within group stressed for the need of oil price hedging, power sector debt securitization and creation of fiscal space through rescheduling of foreign and domestic debts. The need for designing lending programs for housing sector participants came under consideration including facilitation of end-users. The massive scope for mortgage backed financing in Pakistan was also highlighted.
Advisor to PM on Finance and Revenue took lead in picking most urgent themes for proper policy deliberations and decisions.
He shared that Prime Minster of Pakistan may participate in the next session to give boost to the work of this Forum which has been constituted to provide intellectual and professional insights to the Ministry in designing and implementing incentives for economy in pragmatic fashion.
Advisor decided that interventions with highest, medium and low impacts would be sorted out and aligned on the basis of short, medium and long term time horizons so that most essential tasks are pushed on priority basis, with proper funding and execution arrangements.
It was also decided that international think-tanks will be engaged for cross-leaning for select policy making players in Pakistan so that robust interventions are designed to bring relief to economy and most deserving segments of public.
ISLAMABAD: The government on Friday reduced profit rate up to 300 basis points on saving schemes following major cut in policy rate by State Bank of Pakistan (SBP).
The revised rate of profit on various saving scheme will be applicable on April 24, 2020.
The SBP has reduced the policy rate to 9 percent after revising downward the rate by 4.25 in three announcements in one month period.
Profit rate on Defence Certificate cut by 1.86 percent to 8.54 percent.
Profit rates on Behbood and Pension certificates cut by 1.92 percent to 10.32 percent.
Profit rate on Savings account cut by 1.60 percent to 7 percent.
Profit rate on Special Savings cut by 3 percent to 8 percent.
And, profit rate on Regular Income certificate cut by 2.28 percent to 8.28 percent.
KARACHI: The official reserves of State Bank of Pakistan (SBP) have reduced by $85 million to $10.889 billion by week ended April 17, 2020, the central bank said on Thursday.
The SBP attributed this decline to government external debt payments of $145 million.
The SBP said that on April 20, 2020, it received $1.39 billion from International Monetary Fund (IMF) under the Rapid Financing Instrument (RFI) to address the economic impact of the Covid-19 shock.
These funds will be part of SBP weekly reserves data as of 24-April-2020, to be released on 30-April-2020.
The total liquid foreign reserves held by the country stood at $17.300 million on April 17, 2020. The reserves held by commercial banks were at Rs6.41 billion.
KARACHI: Current account deficit (CAD) has contracted by 73 percent during first nine months (July – March) 2019/2020 due to significant decline in import bill.
The current account deficit fell to $2.77 billion during first nine months of current fiscal year as compared with $10.28 billion in the corresponding period of the last fiscal year, according to balance of payment (BOP) details issued by State Bank of Pakistan (SBP) on Thursday.
Country’s trade deficit shrank by 26.44 percent to $17.36 billion during July – March 2019/2020 as compared with the deficit of $23.61 billion in the corresponding period of the last fiscal year.
The import bill of the country fell by 14 percent to $34.81 billion during first nine months of current fiscal year as compared with $40.68 billion in the corresponding period of the last fiscal year.
The exports also increased by 2.23 percent to $17.45 billion during the period under review as compared with $17.07 billion in the same period of the last fiscal year.
On the other hand workers’ remittances received during July – March 2019/2020 amounted to $16.99 billion recording an increase $960.7 million or 6 percent over remittances $16.03 billion received during July – March 2018/2019.
ISLAMABAD: South Africa has arrested a ship of Pakistan National Shipping Company (PNSC) for alleged payment default by Pakistan Steel Mills.
The issue was discussed at the Economic Coordination Committee (ECC) of the Cabinet on Wednesday which was chaired by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh.
A statement said that the ECC considered a proposal by the Ministry of Maritime Affairs regarding arrest of PNSC ships in South Africa on account of alleged claims of M/s Coniston against Pakistan Steel Mills Ltd and asked the Finance Secretary to engage with the PNSC and PSM and seek opinion of the Law Division, if necessary, to resolve the issue having ended up in litigation.
The ECC approved release of Rs 75 billion from PM’s Relief Package of Rs 200 billion for targeted payments to the low-income groups, especially labourers and daily wagers most severely affected by the lockdown situation in the country.
Under the decision, disbursement of Rs 12,000/- per selected person would be made using the Ehsaas disbursement mechanisms under a programme called “Mazdoor Ka Ehsaas Programme”.
For this purpose, a fourth category in addition to already existing three categories in “Ehsaas Kifalat”, would be created and standard filters/checks of Ehsaas Program would be applied for identification of the beneficiaries.
Earlier, the ECC was told that after the usual filters and checks, up to 6 million low-income people were expected to benefit under the planned 4th category in addition to the 12 million labour population already targeted through category 1-3 of Kifalat.
“Mazdoor Ka Ehsaas Programme” was aimed at extending much-needed support in the current situation to the low-income labour/daily wagers mostly involved in activities such as loaders, cleaning staff, contract employees, piece rate workers, self-employed street vendors, construction workers, painters, welders, mechanics, carpenters, domestic help, drivers, etc.
The ECC also asked the Ministry of Industries and Production and the Poverty Alleviation and Social Sector Development Division (PASSD) to jointly work out comprehensive mechanism and modalities to ensure a transparent and efficient disbursement of the support to the deserving people.
During the meeting, the ECC on two separate proposals approved a technical supplementary grant of Rs 606 million for 19 projects to be implemented by the Government of Balochistan for FY 2019-20 and another technical supplementary grant amounting to Rs 7 million for purchase of spare parts for helicopter maintenance by Frontier Corps Balochistan (North).
The ECC also approved release as government loan of Rs 1.30 billion in the current financial year and Rs 3.85 billion per annum during the next three years for settlement of the outstanding liabilities of litigants in the case involving Pakistan Steel Mills (PSM).
On a proposal by the Ministry of Commerce, the ECC approved notification of the Export Policy Order, 2020 and Import Policy Order, 2020 in consolidated form as per the Law Division’s recommendations for the convenience of the business community.
The ECC also approved a proposal by the Ministry of Overseas Pakistanis and HRD for approval of the budget proposal for the year 2019-20 & revised budget estimate for 2018-19 of EOBI.
The ECC, on a proposal by the Ministry of Climate Change, approved exemption from the Re-lending Policy of the Government in respect of a USD 188 million World Bank IDA for the Pakistan Hydromet and Ecosystem Restoration Services Project.
The ECC also accorded principled approval to a proposal by the Ministry of National Health Services for provision of Rs 150 million funds as grant in aid/seed money for Islamabad Healthcare Regulatory Authority, the ECC asked the Secretary Finance and Secretary Health to jointly to work out modalities for the arrangement of funds.
On a proposal by the Ministry of Industries and Production seeking a supplementary grant of Rs 288 million for payment of salaries to the employees of Pakistan Machine Tool Factory, the ECC asked the Finance Division and the Industries and Production Division to sit together and resolve the issue.
KARACHI: State Bank of Pakistan (SBP) on Wednesday said that it has received $1.39 billion from International Monetary Fund (IMF) under Rapid Financing Instrument program to fight against COVID-19.
The Executive Board of the IMF last week approved the disbursement of $1.386 billion under the Rapid Financing Instrument to address the economic impact of the Covid-19 shock.
With the near-term outlook deteriorating sharply, the authorities have swiftly put in place measures to contain the impact of the shock and support economic activity. Crucially, health spending has been increased and social support strengthened, it added.
As the impact of the COVID-19 shock subsides, the authorities’ renewed commitment to implement the policies in the existing EFF will help support the recovery and strengthen resilience.
The Executive Board of the International Monetary Fund (IMF) approved a purchase of Pakistan under the Rapid Financing Instrument (RFI) equivalent to SDR 1,015.5 million (US$ 1.386 billion, 50 percent of quota) to meet the urgent balance of payment needs stemming from the outbreak of the COVID-19 pandemic.
While uncertainty remains high, the near-term economic impact of COVID-19 is expected to be significant, giving rise to large fiscal and external financing needs. The IMF support will help to provide a backstop against the decline in international reserves and provide financing to the budget for targeted and temporary spending increases aimed at containing the pandemic and mitigating its economic impact.
The IMF remains closely engaged with the Pakistani authorities and as the impact of the COVID-19 shock subsides will resume discussions as part of the current EFF.
Following the Executive Board discussion, Geoffrey Okamoto, First Deputy Managing Director and Acting Chair, made the following statement:
“The outbreak of Covid-19 is having a significant impact on the Pakistani economy. The domestic containment measures, coupled with the global downturn, are severely affecting growth and straining external financing. This has created an urgent balance of payments need.
“In this context of heightened uncertainty, IMF emergency financing under the Rapid Financing Instrument provides strong support to the authorities’ emergency policy response, preserving fiscal space for essential health spending, shoring up confidence, and catalyzing additional donor support.
“In response to the crisis, the government of Pakistan has taken swift action to halt the community spread of the virus and introduced an economic stimulus package aimed at accommodating the spending needed to tackle the health emergency and supporting economic activity. Crucially, the authorities are increasing public health spending and strengthening social safety net programs to provide immediate relief to the most vulnerable. Similarly, the State Bank of Pakistan has adopted a timely set of measures, including a lowering of the policy rate and new refinancing facilities, to support liquidity and credit conditions and safeguard financial stability. In this context, the authorities’ policies should be targeted and temporary.
“As the crisis abates, the authorities’ renewed commitment to the reforms in the existing Extended Fund Facility—in particular those related to fiscal consolidation strategy, energy sector, governance, and remaining AML/CFT deficiencies—will be crucial to entrench resilience, boost Pakistan’s growth potential, and deliver broad based benefits for all Pakistanis.
“Expeditious donor support is needed to close the remaining balance of payments gap and ease the adjustment burden.”
KARACHI: The inflow of Foreign Direct Investment (FDI) into Pakistan has witnessed sharp growth of 137 percent during first nine months (July – March) 2019-2020, State Bank of Pakistan (SBP) said on Tuesday.
The FDI increased to $2.15 billion during first nine months of current fiscal year as compared with $905 million in the corresponding period of the last fiscal year.
The inflows under this head increased to $2.69 billion during the period under review as compared with $2.14 billion in the corresponding period of the last fiscal year, showing 25.6 percent growth. The outflows, however, fell by 56 percent to $548 million during first nine months of current fiscal year as compared with $1.24 billion in the same period of the last fiscal year.
Portfolio investment in equity market increased by 75 percent as outflow reduced to $103.6 million during July –March 2019/2020 as compared with outflow of $409 million in the corresponding period of the last fiscal year.
Therefore, the foreign private investment increased by 312 percent to $2.044 billion in first nine months of current fiscal year as compared with $495.6 million in the same period of the last fiscal year.