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KARACHI: February 28, 2020 – Pakistan’s total liquid foreign exchange reserves posted a notable increase of $126 million during the week ended February 28, 2020, according to data released by the State Bank of Pakistan (SBP) on Thursday.
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ISLAMABAD: The trade deficit has narrowed by 26.52 percent in first eight months (July – February) 2019/2020 owing to fall in import bill.
The trade deficit reduced to $15.773 billion during first eight months of current fiscal year as compared with the deficit of $21.467 billion in the corresponding months of the last fiscal year, according to data released by Pakistan Bureau of Statistics (PBS) on Wednesday.
The import bill significantly reduced by 14.06 percent during the period. The import bill of the country was at $31.42 billion during July – February 2019/2020 as compared with $36.563 billion in the corresponding period of the last fiscal year.
The exports of the country also increased by 3.65 percent during the period under review. The exports grew to $15.648 billion during first eight months of current fiscal year as compared with $15.097 billion in the same period of the last fiscal year.
The exports however increased by 13.82 percent to $2.14 billion in February 2020 as compared with $1.88 billion in the same month of the last year.
The imports in February 2020 fell by 1.71 percent to $4.073 billion as compared with $4.144 billion in the same month of the last year.
The trade deficit for the month of February 2020 was at reduced by 14.61 percent to $1.93 billion as compared with the deficit of $2.263 billion in the same month of the last year.
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved exemption from withholding tax on transfer of remittances into bank accounts.
The ECC approved at the meeting on Wednesday chaired by Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh.
The ECC approved that the amount of the remittances transferred into bank accounts will be exempted from withholding tax with effect from July 1, 2020.
The ECC approved a host of measures to encourage and facilitate the overseas Pakistanis to send their remittances through official banking channels.
Under the decision, following measures for the enhancement of home remittances through banking channels were approved:
i. The rebate of reimbursement of T.T. Charges transactions between USD 100 and USD 200 will be increased from SAR- 10/- to SAR-20/-.
ii. Continuation of the New Scheme of incentives launched in 2018-19 for banks and exchange companies during the current calendar year from January 2020. As per Scheme financial institutions would be incentivized Rs. 0.50 per 1 USD on 5 percent growth, Rs. 0.75 per 1USD on 10 percent growth and Rs. 1/- per 1USD on 15 percent growth.
iii. The amount of the remittances transferred into bank accounts will be exempted from withholding tax with effect from July 1, 2020.
iv. A “National Remittance Loyalty Program” will be launched from September 1, 2020 with collaboration of major commercial banks and government agencies through which various incentives will be given to remitters through mobile apps and cards.
ECC approved a technical supplementary grant of Rs.9.6 billion during the current financial year to finance the above mentioned initiatives.
Taking up other agenda items, the ECC approved a proposal by the Ministry of Federal Education & Professional Training for a technical supplementary grant of Rs 5 billion in favour of the Higher Education Commission (HEC) for the current Financial Year 2019-20 with instruction for a judicious and need-based distribution of funds among the universities.
The ECC also approved a proposal by the National Security Division for a technical supplementary grant amounting to Rs 15 million for the Strategic Policy Planning Cell (SPPC) created in the National Security Division with the approval of the Prime Minister to act as an intellectual hub for evidence-based policy input on key national security issues.
On a proposal by the Ministry of Defence, the ECC okayed a proposal for a technical supplementary grant amounting to Rs 34.528 million for Internal Security Duty Allowance to the Pakistan Air Force.
On a proposal by the Petroleum Division, the ECC approved allocation of gas to SSGC and Provisional Tight Gas Incentive for Rehman-4 Well in Kirthar Block subject to the finalization and approval of requisite third-party certifications for Tight Gas for the same well.
The ECC also discussed a proposal regarding quarterly adjustments of the K-Eectric Limited for the period from July 2016 to March 2019 and in the light of input and discussion by the members, set up a committee including Minister for Power Omar Ayub Khan, Minister for Economic Affairs Muhammad Hammad Azhar, Deputy Chairman Planning Commission, Secretary Finance and a representative from the K-Electric to examine the issue in detail and recommend to ECC within a week a solution and roadmap for resolving the issue.
The ECC also deliberated upon a proposal by the Ministry of Energy to further extend till June 2020 the grant of subsidy to agricultural tubewell consumers in Balochistan.
Earlier, the ECC was briefed that nearly 30,000 agri consumers in Balochistan had been given subsidy since 01.01.2015 with 40 percent of the burden of subsidy born by the Government of Pakistan and the remaining 60% picked up the Balochistan government.
However, the recovery of dues from the farmers for the electricity consumed over and above the limit of subsidy had been negligible and attempts to recover these dues from defaulters in the past had not been successful.
The ECC discussed the issue in detail and set up a Committee, including the Minister for Power, to discuss the issue with the Government of Balochistan to ensure a credible solution to the problems impeding a judicious execution of the scheme for which the federal government alone was contributing Rs 9 billion annually, and also allowed the extension of subsidy until a solution to the issue was found by the Committee and put in place.
On a proposal by the Ministry of Industries and Production for revival of M/s Tuwairqi Steel Mills Limited (TSML) – A Direct Reduced Iron (DRI) Unit, the ECC discussed the issue and asked the Ministry of Industries and Production to resubmit the proposal in the light of recent and ongoing development on different issues among stakeholders on the proposal.
WASHINGTON: The World Bank has approved $300 million to support human capital and livelihoods in Pakistan, said a statement on Wednesday.
Pakistan is accelerating investments in health care and education to prepare children to reach their productive potential and generate wealth. Today the World Bank committed $200 million for the Punjab Human Capital Investment Project that will strengthen health services and social protection for poor and vulnerable households in select districts in Punjab.
“Pakistan’s strongest asset is its people. Investing at the start of life, especially for girls and women, is essential to empower citizens to thrive,” said Illango Patchamuthu, World Bank Country Director for Pakistan. “This project will help the Punjab province to invest in early years now to create a productive workforce for the future.”
The project will increase the quality and uptake of health services, including maternal care, immunizations, and childbirths attended by qualified professionals, reaching up to 18 million people. It will provide early childhood education and skills training for young parents and will improve systems to more efficiently manage economic and social inclusion programs.
“There are substantial financial and non-financial barriers to access quality health services, such as expenses to visit health facilities and the burden of household chores and childcare, especially among women in poor households,” said Yoonyoung Cho, Task Team Leader for the project.
“The first 1,000 days are the most critical time in a child’s development, thus prioritizing maternal and natal care is integral to their productive capacity and strengthening human capital accumulation in Pakistan.”
The World Bank also approved $85 million in grants and credits from IDA18 Regional Sub-Window for Refugees and Host Communities and $15 million from the Multi-Donor Trust Fund to the Federal Government and the Government of Balochistan to support the strengthening of institutions, delivery of services, and support for livelihoods and enterprise development.
ISLAMABAD: Prime Minister Imran Khan on Tuesday welcomed proposals of banks for revival of sick industrial units.
A delegation of prominent bankers of the country called on Prime Minister Imran Khan in Islamabad.
Prime Minister Imran Khan welcomed the proposals of the banking community particularly those related to the revival of the sick industrial units.
Adviser to PM on Finance Dr. Abdul Hafeez Shaikh, Adviser to PM on Institutional Reforms Dr. Ishrat Hussain, Governor State Bank of Pakistan Syed Reza Baqir and senior officials of the Government were present during the meeting.
The bankers apprised the Prime Minister about the issues concerning banking sector in terms of financing for accelerating the economic activities aimed at wealth creation and presented various suggestions to overcome issues being encountered.
The Prime Minister stated that the Government is working relentlessly for economic growth and sustained positive sentiments, domestically as well as externally.
The Prime Minister highlighted human resource potential of the country with enterprising youth in majority; we need to channelize their energies through skill development thereby enabling them to contribute towards economic development.
The Prime Minister said that the present Government is focused on reviving sick industrial units and promoting the SMEs, as they are essential for wealth creation and generation of employment opportunities.
The Prime Minister appreciated the proposals of the delegation and assured maximum facilitation.
The meeting was informed that Corporate Restructuring Company has been established to take over sick industrial units for the purpose of reviving the commercially or financially distressed companies thereby making them profitable with consultation of all the stakeholders.
ISLAMABAD: The headline inflation based on Consumer Price Index (CPI) has contracted at 12.4 percent in February 2020 as compared with 14.6 percent in January 2020.
According Pakistan Bureau of Statistics (PBS), the headline inflation base-year 2015-16 increased by 12.4 percent on year-on-year basis in February2020 as compared to an increase of14.6 percent in the previous month and 6.8 percent in February2019.
On month-on-month basis, it decreased by 1.0 percent in February 2020 as compared to an increase of 2.0 percent in the previous month and an increase of 0.9 percent in February2019.2.
The CPI inflation Urban increased by 11.2 percent on year-on-year basis in February2020 as compared to an increase of 13.4 percent in the previous month and 7.2 percent in February 2019.
On month-on-month basis, it decreased by 1.1 percent in February 2020 as compared to an increase of 1.7 percent in the previous month and an increase of 0.9 percent in February2019.
CPI inflation Rural increased by 14.2 percent on year-on-year basis in February 2020 as compared to an increase of 16.3 percent in the previous month and 6.0 percent in February 2019.
On month-on-month basis, it decreased by 1.0 percent in February 2020 as compared to an increase of 2.4 percent in the previous month and an increase of 0.9 percent in February2019.
SPI inflation on YoY increased by14.5 percent in February2020 as compared to an increase of 18.3 percent a month earlier and an increase of 7.2 percent in February2019.
On MoM basis, it decreased by 0.8 percent in February2020 as compared to an increase of 0.5 percent a month earlier and an increase of 2.4 percent in February2019.
WPI inflation on YoY basis increased by 12.6 percent in February2020as compared to an increase of 15.4 percent a month earlier and an increase of 13.9 percent in February2019.
WPI inflation on MoM basis it decreased by 0.8 percent in February 2020 as compared to an increase of 1.8 percent a month earlier and an increase of 1.6 percent in corresponding month of last year i.e. February 2019.
KARACHI: The Executive Board of the International Monetary Fund (IMF) will decide disbursement of $450 million in early April 2020, a statement said on Thursday.
The IMF issued the press release stating:
“Following discussions between International Monetary Fund (IMF) staff and the Pakistani authorities in Islamabad from February 3-13, which continued from the IMF headquarters in recent days, IMF staff and the Pakistani authorities have reached a staff-level agreement on policies and reforms needed to complete the second review of the authorities reform program supported under the EFF.
“The agreement is subject to approval by the IMF management and consideration by the Executive Board, which is expected in early April. Completion of the review will enable disbursement of SDR 328 million (around US$450 million).”
Earlier on February 14, 2020, the IMF issued the following press release:
“An International Monetary Fund (IMF) mission, led by Ernesto Ramirez Rigo, visited Islamabad during February 3-13, to initiate discussions on the second review of the authorities’ economic reform program supported under the Extended Fund Facility (EFF) arrangement.
“At the conclusion of the visit, Mr. Ramirez Rigo made the following statement:
“The IMF staff team had constructive and productive discussions with the Pakistani authorities and commended them on the considerable progress made during the last few months in advancing reforms and continuing with sound economic policies. The mission and the authorities made significant progress in the discussions on policies and reforms. In the coming days progress will continue to pave the way for the IMF Executive Board’s consideration of the review.
“The macroeconomic outlook remains broadly as expected at the time of the first review. Economic activity has stabilized and remains on the path of gradual recovery. The current account deficit has declined, helped by the real exchange rate that is now broadly in line with fundamentals, while international reserves continue to rebuild at a pace considerably faster than anticipated. Inflation should start to see a declining trend as the pass-through of exchange rate depreciation has been absorbed and supply-side constraints appear to be temporary. Fiscal performance in the first half of the fiscal year remained strong, with the general government registering a primary surplus of 0.7 percent of GDP on the back of strong domestic tax revenue growth. Development and social spending have been accelerated.”
KARACHI: Pakistan’s liquid foreign exchange reserves were flat at $18.743 billion by week ended February 21, 2020, State Bank of Pakistan (SBP) said on Thursday.
The foreign exchange reserves of the country were at $18.747 billion by week ended on February 14, 2020.
The official reserves of the central bank increased by $87 million to $12.592 billion by week ended February 21, 2020 as compared with $12.505 billion a week ago.
However, reserves held by commercial banks fell by $91 million to $6.151 billion by week ended February 21, 2020 as compared with $6.242 billion a week ago.
ISLAMABAD: The ministry of finance has advised Federal Board of Revenue (FBR) to enhance monitoring and enforcement in order to achieve annual targets.
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KARACHI: Financial Action Task Force (FATF) on Friday maintained Pakistan’s status of grey list till June 2020 and asked the country to complete its full action plan.
“To date, Pakistan has largely addressed 14 of 27 action items, with varying levels of progress made on the rest of the action plan. The FATF strongly urges Pakistan to swiftly complete its full action plan by June 2020,” a statement received from Paris, France after conclusion of FATF plenary meeting (February 19-21, 2020).
The statement said:
“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 political commitment has led to progress in a number of areas in its action plan, including risk-based supervision and pursuing domestic and international cooperation to identify cash couriers. Pakistan should continue to work on implementing its action plan to address its strategic deficiencies, including by:
(1) demonstrating that remedial actions and sanctions are applied in cases of AML/CFT violations, relating to TF risk management and TFS obligations;
(2) demonstrating that competent authorities are cooperating and taking action to identify and take enforcement action against illegal money or value transfer services (MVTS);
(3) demonstrating the implementation of cross-border currency and BNI controls at all ports of entry, including applying effective, proportionate and dissuasive sanctions;
(4) demonstrating that law enforcement agencies (LEAs) are identifying and investigating the widest range of TF activity and that TF investigations and prosecutions target designated persons and entities, and those acting on behalf or at the direction of the designated persons or entities;
(5) demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions
(6) demonstrating effective implementation of targeted financial sanctions (supported by a comprehensive legal obligation) against all 1267 and 1373 designated terrorists and those acting for or on their behalf, including preventing the raising and moving of funds, identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services;
(7) demonstrating enforcement against TFS violations including administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases;
(8) demonstrating that facilities and services owned or controlled by designated person are deprived of their resources and the usage of the resources.
“All deadlines in the action plan have expired. While noting recent and notable improvements, the FATF again expresses concerns given Pakistan’s failure to complete its action plan in line with the agreed timelines and in light of the TF risks emanating from the jurisdiction.
The statement said that in case the country failed to comply the FATF will take action, which could include the FATF calling on its members and urging all jurisdiction to advise their FIs to give special attention to business relations and transactions with Pakistan.