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  • Workers’ remittances increase by 26.5pc in July – October

    Workers’ remittances increase by 26.5pc in July – October

    KARACHI: The inflow of workers’ remittances has sharply increased by 26.5 percent to $9.43 billion during first four months (July – October) of current fiscal year 2020/2021, State Bank of Pakistan (SBP) said on Thursday.

    The central bank received $7.45 billion in the same months of the last fiscal year.

    The SBP said that remittances remained above $2 billion for the fifth consecutive month in October 2020.

    Workers’ remittances amounted to $ 2.3 billion during October 2020, increasing by 14.1 percent compared to October 2019.

    A large part of y/y increase in October 2020 was sourced from Saudi Arabia (30 percent), United States (16 percent) and United Kingdom (14.6 percent).

    Improvements in Pakistan’s FX market structure and its dynamics, efforts under the Pakistan Remittances Initiative (PRI) to formalize the flows contributed to the growth in remittances and limited cross-border travelling, the SBP said.

  • PSMA, 84 sugar mills served show cause notices for cartelization

    PSMA, 84 sugar mills served show cause notices for cartelization

    ISLAMABAD: The Competition Commission of Pakistan (CCP) on Tuesday said it issued show cause notices to 84 sugar mills and their association for cartelization.

    The CCP said that it had issued show cause notices to Pakistan Sugar Mills Association (PSMA) and its 84 member mills on multiple instances of prima facie cartelization in violation of Section 4 of the Competition Act, 2010.

    The show cause notices have been issued after the CCP decided to initiate proceedings under Section 30 of the Act on the recommendations of an enquiry into the anti-competitive activities in the sugar sector.

    The CCP’s enquiry has found multiple instances where the Pakistan Sugar Mills Association (PSMA) is acting as a front-runner for cartelization in the sugar industry.

    “Evidence gathered during search and inspections conducted on the premises of PSMA and JDW Sugar Mills seems to suggest these anti-competitive activities have continued since 2010.”

    The impounded data included exchange of emails between a senior official of one of the Sugar Mill (Member of PSMA) and PSMA Punjab zone office bearers regarding sensitive commercial information such as mill-wise, district-wise sugar stock position, and even the quantity of cane crushed, sugar produced, recovery percentage, carry forward old/raw sugar, total sugar, quantity sold, balance and sold percentage.

    “Moreover, an analysis of the WhatsApp messages exchanged in a group of PSMA officials, the same senior official of that Sugar Mill was found to be in constant communication with regard to price and stock related data of sugar mills.

    “The impounded data indicated the senior official’s continued involvement in sharing/receiving sensitive information regarding sugar industry since 2012 when he was nominated as the focal person for coordinating the sugar stock position by PSMA,” the CCP said.

    Furthermore, the PSMA’s platform was also being used by member sugar mills to collectively make commercially sensitive decisions such as reduction in domestic stocks/supplies of sugar, which led to an increase in or maintenance of desired price levels in the relevant market.

    PSMA and its members have been provided an opportunity of hearing to plead their case with reference to the prima facie specific violations indicated therein.

    PSMA and all 84 sugar mills prima facie violated the Act by collectively deciding to export sugar and thereby fixing the quantities of sugar to be supplied in Pakistan.

    Similarly, they also violated the Act by reducing stocks of sugar through exports; hence collectively raised and maintained prices of sugar in Pakistan.

    Moreover, in the crushing season 2019-20, 15 sugar mills in Punjab under the auspices of PSMA, collectively decided to delay crushing of sugarcane leading to reduction in quantity supplied in the market.

    In Punjab, 45 sugar mills used PSMA’s platform to share business sensitive information with each other.

    Lastly, PSMA and sugar mills divided quantities of sugar in tenders issued by USC on various occasions.

    “The CCP found 19 mills in Punjab to have violated the Act with reference to a tender dated 2019 whereas, 30 mills from all over Pakistan have been issued show cause for an earlier tender.”

    The findings of CCP’s previous sugar enquiry report in 2009 had found that PSMA and its members had engaged in fixing of prices and collusion in the purchase of sugarcane, production of sugar, and sale or trade of sugar.

    In the instant matter it appears that PSMA and its member mills sought to keep prices stable, inter alia, by controlling supply of sugar available in the domestic market.

  • Country’s forex reserves increase to $19.353 billion

    Country’s forex reserves increase to $19.353 billion

    KARACHI: The liquid foreign exchange reserves of the country increased by $57 million to $19.353 billion by week ended October 29, 2020, State Bank of Pakistan (SBP) said on Thursday.

    The foreign exchange reserves were at $19.296 billion by week ended October 23, 2020.

    The official foreign exchange reserves of the SBP increased by $61 million to $12.182 billion by week ended October 29, 2020 as compared with $12.121 billion.

    The foreign exchange reserves held by commercial banks eases to $7.171 billion by week ended October 29, 2020 as compared with $7.175 billion a week ago.

  • Budget deficit swells to 1.1 percent in first quarter

    Budget deficit swells to 1.1 percent in first quarter

    ISLAMABAD: The budget deficit has ballooned to 1.1 percent of the GDP for the first quarter (July – September) 2020/2021 as compared with the deficit of 0.7 percent in the corresponding quarter of the last fiscal year, according to fiscal statistics released by the finance ministry on Wednesday.

    The size of GDP has been estimated at Rs45,567 billion by the end of first quarter of the current fiscal year as compared with the size of Rs44,003 billion in the same period of the last fiscal year.

    The ministry said that the total revenue had declined nominally to Rs1478.75 billion during the first quarter of the current fiscal year as compared with Rs1,489 billion in the same quarter of the last fiscal year.

    Tax revenue has also declined to Rs1,122 billion for the quarter under review as compared with Rs1,142 billion in the same quarter of the last fiscal year.

    Out of the total tax revenue for the first quarter of the current fiscal year, the federal government contributed Rs1,011 billion and provincial governments contributed Rs111.76 billion.

    The ministry said that non-tax revenue witnessed an increase to Rs356.35 billion during the first quarter of the current fiscal year as compared with Rs346 billion in the same quarter of the last fiscal year.

    Out of total non-tax revenue, the federal government contribution was Rs336 billion and the share of provincial government was Rs20 billion.

    Total expenditures have registered significantly to Rs1,963 billion during July – September of fiscal year 2020/2021 as compared with Rs1,775 billion in the corresponding quarter of the last fiscal year.

    Current expenditure sharply increased to Rs1,812 billion during first quarter of the current fiscal year as compared with Rs1,582 billion in the same quarter of the last fiscal year.

    Expenditure of mark-up payment increased to Rs742 billion as compared with Rs571 billion.

    However, defence expenditure fell to Rs224 billion during first quarter of the current fiscal year as compared with Rs242 billion in the same quarter of the last fiscal year.

    The government spent Rs215 billion on development projects during the first three months of the current fiscal year as compared with Rs147.17 billion in the corresponding period of the last fiscal year.

    The fiscal deficit for the first quarter of current fiscal year was recorded at Rs484 billion as compared with the deficit of Rs286 billion in the same quarter of the last fiscal year.

  • Pakistan exports goods worth $7.55 billion in four months

    Pakistan exports goods worth $7.55 billion in four months

    ISLAMABAD: Pakistan has exported goods worth $7.55 billion during the first four months (July – October) 2020/2021 as compared with $7.52 billion in the corresponding period of the last fiscal year, showing nominal increase of 0.33 percent, according to data released by Pakistan Bureau of Statistics (PBS) released on Wednesday.

    On the other hand, imports fell by 0.79 percent to $15.13 billion during the first four months of the current fiscal year as compared with $15.25 billion in the corresponding months of the last fiscal year.

    The trade deficit also contracted by 1.88 percent to $7.57 billion during the period under review as compared with the trade deficit of $7.72 billion in the same period of the last year.

    The exports during the month of October 2020 increased by 3.07 percent to $2.08 billion as compared with $2.02 billion in the same month of the last year.

    Imports for the month fell by 5.73 percent to $3.82 billion as compared with $4.05 billion in the same month of the last year.

    The trade deficit reduced by 14.46 percent to $1.74 billion in October 2020 as compared with a trade deficit of $2.03 billion in the same month of the last year.

  • Import bill falls by over 10 percent in October; export witnesses 2.1 percent growth

    Import bill falls by over 10 percent in October; export witnesses 2.1 percent growth

    ISLAMABAD: The country’s import bill has witnessed decline by 10.3 percent to $4.07 billion in October 2020 as compared with $3.65 billion in the same month of the last year.

    Meanwhile, the exports have witnessed an increase of 2.1 percent to $2.06 billion in October 2020 as compared with $2.02 billion in October 2019.

    To review the current export trends, a meeting was held on Tuesday, in the Ministry of Commerce, under the Chairmanship of the Advisor to the Prime Minister on Commerce and Investment, Abdul Razak Dawood.

    The trade deficit shrank by 22.6 percent in October 2020 to $1.587 billion, showing an improvement of $463 million over October 2019.

    The advisor was also briefed that during July-October 2020 the exports decreased only marginally by 0.1 percent. The exports during this period stood at $7.54 billion as compared to $7.547 billion during the same period last year.

    He was informed that, during July-October 2020, the balance of trade has witnessed a decline of 4.5 percent to $7.424 billion as compared to $7.776 billion last year.

    The Advisor expressed his satisfaction at the export trends and praised Pakistan’s exporters who made it possible for bringing the exports to pre-COVID-19 levels despite uncertainty and contraction in Pakistan’s major markets.

    He was also briefed on the major export product trends and was informed that during July-October 2020, the export increases were mostly in the value added sectors.

    The increases were witnessed in Home Textiles (10.0 percent), Women’s Garments (20.8 percent), Jerseys & pullovers (35.3 percent), Made-up articles of textile (10.4 percent), Stockings & socks (19.2 percent), Cement (10.8 percent), Pharmaceutical products (26.8 percent), Tarpaulins (66.8 percent), and Made-up clothing accessories (245.2 percent) as compared to the same period last year.

    He was informed that, as compared to the same period last year, the export decreases during July-October 2020 were seen in mostly the non-value added sectors such as Cotton Fabric (-8.0 percent), Cotton yarn (-40.1 percent), Worn clothing (-63.6 percent), Raw Leather (-38.4 percent), Crude Petroleum (-53.7 percent), and Cotton (-95.7 percent). The Advisor was also briefed on the geographical spread and growth of exports.

    He was informed that, as compared to the same period last year, Pakistan’s top five growing markets during July-October 2020 are Indonesia (39.3 percent), Qatar (34.5 percent), Denmark (24.9 percent), S. Korea (22.5 percent) and Afghanistan (15.6 percent).

    The Advisor expressed his hope that Pakistan economy will continue on its upward recovery trend and he directed that the officials of Ministry continue to proactively facilitate exporters and businessmen.

    He further directed that no efforts should be spared to counter the effect of the second wave of COVID-19 in Pakistan’s major markets.

  • Electricity tariff reduced up to 50pc on additional usage to promote industries

    Electricity tariff reduced up to 50pc on additional usage to promote industries

    ISLAMABAD: The government on Tuesday announced up to 50 percent reduction in electricity tariff on additional usage to promote industries in the country.

    Prime Minister Imran Khan announced a relief package for industrial sector with 50 percent reduction in rate of commercial electricity on additional usage by Small and Medium Enterprises.

    The announcement was made after the federal cabinet gave approval to the package.

    The Prime Minister said for next three years, all industries on additional usage of electricity would be provided 25 percent relief considering their previous bills.

    He also announced an end to peak-hour system for commercial electricity users, with provision of uniform electricity rates round the clock.

    Imran Khan said a strong infrastructure of energy was vital to help industries grow and compete with international market.

    He pointed that with 25 percent expensive electricity rates, Pakistan lagged behind India and Bangladesh in terms of exports.

    “It is extremely important for Pakistan to strengthen industrialization, which will lead to wealth creation and thus help pay off the debt,” he said.

    Imran Khan regretted that the contracts signed with power generation companies during previous tenures resulted in production of high-cost electricity, which remained unaffordable for industrial sector.

    During 2013-18, he mentioned that the country’s exports dipped from Rs 25 billion to Rs 20 billion as many industries were shut down due to high cost of electricity.

    The Prime Minister said soon after assuming the government, his team focused on increasing exports as “higher the exports, stronger the economy”.

    He expressed satisfaction that Pakistan ranked high among the countries of sub-continent in growth of exports during the pandemic of COVID-19.

    In view of the second wave of coronavirus, the Prime Minister appealed to the nation to continue wearing face masks to avert the risks and dangers of the disease.

    Minister for Industries and Production Hammad Azhar on the occasion said under the package, which was prepared on the special instructions of Prime Minister Imran Khan and approved by the cabinet today, the industries would be provided electricity at off-peak hours’ rate for 24 hours for next three years.

    The Small and Medium Enterprises (SMEs), he said, would be getting 50 percent tariff relief on the use of additional electricity, considering their bills of November 2019, during next six months, while all the industries would be provided with additional electricity on 25 percent reduced rates for next three years.

    Hammar Azhar said the decision would help boost economic growth, strengthen industry, increase exports, and create employment opportunities.

  • Headline inflation contracts at 8.9 percent in October

    Headline inflation contracts at 8.9 percent in October

    ISLAMABAD: The headline inflation based on Consumer Price Index (CPI) has contracted by 8.9 percent on year-on-year basis in October 2020 as compared to an increase of 9.0 percent in the previous month and 11.0 percent in October 2019.

    On month-on-month basis, it increased by 1.7 percent in October 2020 as compared to an increase of 1.5 percent in the previous month and an increase of 1.8 percent in October 2019, Pakistan Bureau of Statistics (PBS) said on Monday.

    CPI inflation Urban, increased by 7.3 percent on year-on-year basis in October 2020 as compared to an increase of 7.7 percent in the previous month and 10.9 percent in October 2019. On month-on-month basis, it increased by 1.3 percent in October 2020 as compared to an increase of 1.3 percent in the previous month and an increase of 1.6 percent in October 2019.

    CPI inflation Rural, increased by 11.3  percent on year-on-year basis in October 2020 as compared to an increase of 11.1 percent in the previous month and 11.3 percent in October 2019. On month-on-month basis, it increased by 2.4  percent in October 2020 as compared to an increase of 2.0 percent in the previous month and an increase of 2.2 percent in October 2019.

    Sensitive Price Indicator (SPI) inflation on YoY increased by 12.3 percent in October 2020 as compared to an increase of 12.0 percent a month earlier and an increase of 15.1 percent in October 2019. On MoM basis, it increased by 3.0 percent in October 2020 as compared to an increase of 2.1 percent a month earlier and an increase of 2.7 percent in October 2019.

    Wholesale Price Index (WPI) inflation on YoY basis increased by 5.1 percent in October 2020 as compared to an increase of 4.3 percent a month earlier and an increase of 13.3 percent in October 2019. WPI inflation on MoM basis increased by 2.9 percent in October 2020 as compared to a decrease of 1.0 percent a month earlier and an increase of 2.0 percent in corresponding month (October 2019) of last year.

  • Inflation is one of main challenges: finance ministry

    Inflation is one of main challenges: finance ministry

    ISLAMABAD: The ministry of finance has said that economic growth is showing persistent recovery but the inflation is one of the main challenges.

    According to monthly economic update issued on Tuesday, the finance ministry said that economic growth is showing persistent recovery in first quarter (July – September) 2020/2021.

    In absence of any adverse future shocks, the economy is on its way not only to rebound from the pandemic related crises, but also to record a reasonable growth rate for the full fiscal year.

    “Presently, inflation is one of the main challenges. However, the government is taking all possible measures to control it,” it said.

    Together with measures that ensure sufficient supply of goods, especially food related production, it is expected that inflation will remain under control whereas policy measures will contribute to better functioning markets.

    Most importantly, although domestic economic activity is expected to recover, still the risk of pandemic attack persists if the SoPs are not fully followed.

    “Thus, Pakistan’s near-term economic prospects are promising subject to reducing uncertainty and restoring business confidence,” the ministry added.

    Usually main drivers of the consumer price index (CPI) are international commodity prices, especially food and oil products, the exchange rate, growth of broad money and the policy interest rate.

    “However, in Pakistan most recently, CPI remained driven by higher food prices, while non-food inflation remained moderated,” the ministry added.

    Supply disruption in food related commodities was mainly due to extended monsoon season which has built inflationary pressure.

    In recent weeks, the international food prices have rebounded somewhat, whereas oil prices declined and the Pak Rupee exchange rate slightly appreciated against the USD, thus easing out inflationary prospects.

    There is no change in Indirect tax or other fiscal measures. Likewise, interest rate is kept same as per the policy interest rate in July 2020.

    “Thus, accommodative Fiscal and Monetary Policy helped in controlling core inflation. The government is making all efforts to control inflation by smoothing supply even by expediting imports of sugar and wheat, which are considered as essential food commodities.

    On weekly basis, impact can be predicted from decline of 0.23 percent in SPI on 22nd October 2020. This decline occurred after seven weeks.

    On the basis of current economic scenario, headline inflation is expected to remain within a range of 7.3 to 9.3 percent in October 2020.

    Economic recovery has been observed from the start of the new fiscal year.

    Most importantly the decrease in number of Corona virus cases and the resumption of economic activities have contributed in dampening the negative impact of health crisis on the economy.

    Economic recovery was seen in Q1 FY2021 and it is expected that this trend will continue but fears and risk factors are appearing due to the possible second wave of COVID, the ministry said.

  • Ms. Sethi appointed as chief pay, pension commission

    Ms. Sethi appointed as chief pay, pension commission

    ISLAMABAD: The government has appointed M.s Nargis Sethi as chairperson of the pay and pension commission with immediate effect.

    A notification issued dated October 15, 2020 by the Finance Division stated that the Prime Minister had appointed Ms. Nargis Sethi, former federal secretary, as chairperson of the pay and pension commission with immediate effect.

    Abdul Wajid Rana has regretted to continue as the chairman of the pay and pension commission, it added.