Pkrevenue.com

Category: Finance

Explore finance-related stories with Pakistan Revenue, your source for the latest updates on Pakistan’s economy, financial trends, and market insights. Stay informed with real-time economic developments.

IMF mission chief holds talks with Pak authorities for new program

ISLAMABAD: IMF mission chief for Pakistan, Ernesto Ramirez-Rigo, visited Islamabad and Karachi during March 26-27, for introductory meetings with the authorities, said a statement on Wednesday.

Ramirez-Rigo assumed Pakistan mission chief responsibilities earlier this month. This was his first visit to the country.

In Islamabad, Ramirez-Rigo met with the Minister of Finance, Asad Umar, the Minister of Commerce, Razzak Dawood, the Minister of Power, Omer Ayub, the State Minister for Revenues Hammad Azhar, and several government senior officials, including the Finance Secretary, Younus Dagha, the Chairman of the Federal Board of Revenues, Jehanzeb Khan, and the Advisor to the Prime Minister on Institutional Reforms and Austerity, Ishrat Hussain.

In Karachi, he met with the Governor of the State Bank of Pakistan Tariq Bajwa and other senior officials from the State Bank of Pakistan.

Discussions focused on recent economic developments and prospects for Pakistan in the context of ongoing discussions toward an IMF-supported program.

March 27, 2019
Asad Umar meets IMF mission chief

ISLAMABAD: Finance Minister of Pakistan Asad Umar met the IMF Mission Chief Ernesto Ramirez Rigo in Islamabad, on Tuesday.

The minister and the Mission Chief discussed all issues including fiscal, monetary, structural reforms and energy sector, a statement said.

Asad Umar briefed Ramirez Rigo about the steps taken by the government for improving the economy of the country.

The minister informed that the structural reforms and other economic initiatives introduced by the government were yielding desired results.

The minister said that the government would continue to address the macroeconomic imbalances and would take necessary corrective measures in this regard.

March 27, 2019
Restriction on non-filers for car buying considerably reduces own money

KARACHI: The restriction on non-filers to purchase cars during first half of current fiscal year has reduced the delivery time and also reduce the own money for immediate delivery in the grey market.
(more…)

March 26, 2019
SBP estimates lower GDP growth, high inflation

KARACHI: State Bank of Pakistan (SBP) has projected the real GDP growth for fiscal year 2018/2019 would be around 3.5-4 percent much lower than the actual target of 6.2 percent.

The central bank in State of Pakistan Economy, Second Quarterly Report for Fiscal Year 2018/2019, issued on Monday the SBP further projected that the inflation would further increased to 6.5-7.5 percent during the current fiscal year as compared with actual target of 6 percent.

The GDP growth for fiscal year 2017/2018 was 5.2 percent and inflation for the same year was recorded at 3.9 percent.

The central bank estimated that remittances would be above the target during the current fiscal year to $21.5 billion. However, estimates for exports are at $25.5-27 billion lower than the target of $27.9 billion. Meanwhile, the estimates for imports have also been lowered to $54-56 billion from actual estimate of $58.5 billion.

The SBP estimated that the fiscal deficit would be around 6-7 percent against target of 4.9 percent. The fiscal deficit was at 6.6 percent last year. The current account deficit would stay around 4.5-5.5 percent of the GDP as against the target of 4 percent.

The SBP said that real GDP growth during FY19 is likely to moderate significantly, mainly due to slowdown in the growth of the agriculture sector and stabilization measures taken to preserve macroeconomic stability.

This is in line with a further contraction in LSM during Q2-FY19. Moreover, given that public development spending, a key driver for private sector industrial activities, is unlikely to pick up anytime soon, the full year outlook for manufacturing activities remains subdued.

Furthermore, private consumption is going to remain lower due to tighter monetary policy and pass through of exchange rate depreciation that has resulted in both higher energy prices and core inflation.

In addition, the prospects for the upcoming wheat crop remain subdued in terms of growth. All these aspects are going to constrain the services sector in the coming months as well.

Regarding price pressures, inflation is expected to remain high in H2-FY19. This is due to the second round impact of recent exchange rate depreciations, an upward adjustment in gas and electricity prices and higher budgetary borrowing from SBP.

However, the lagged impact of policy rate increases would be instrumental in keeping demand pressures in check. Acknowledging these risks, SBP continues to project average CPI inflation at 6.5-7.5 percent for the full year.

As noted earlier, the primary deficit has increased further while there has been a sharp reduction in development expenditures in order to improve the fiscal position.

This situation has become more challenging as the growth in current expenditure inched up to 17.3 percent during the first half as compared to 13.5 percent last year.

On the contrary, revenue collection has contracted by 2.4 percent during the same period as compared to the growth of 19.8 percent last year.

Since there is limited room to curtail government expenditures in the coming months, it is the growth in revenues that would be instrumental in determining the overall fiscal position for FY19.

Incorporating the performance of revenue collection during the second half in the last four years, SBP projects fiscal deficit to further deteriorate by 0.5 percent of GDP, which brings it close to the same level as in FY18.

As for the external sector, while the CAD has improved by USD 1.7 billion during the first seven months of FY19, it is still high at USD 8.4 billion.

Some improvement is expected to continue in the remaining months as imports are likely to contract further on account of moderating domestic demand and relatively low international oil price as compared to that at the beginning of FY19.4 However, merchandize exports are expected to miss the target due to waning demand in certain export destinations.

Additionally, this is compounded by the competitive pressures in the international arena and the lack of diversified and higher value

added products that can effectively utilise the export quotas allowed under specific trade agreements.

Meanwhile on the external financing front, the efforts of the government have started to materialize in the shape of bilateral inflows from Saudi Arabia, UAE and China. Some of these inflows have already been realized, while rest are due in H2-FY19.

Along with the Saudi deferred oil payment facilities, these inflows have an important role in meeting the external financing gap for FY19; thereby, relieving pressure on the foreign exchange reserves and mitigating volatility in the FX market.

Related Stories
SBP stresses urgent need to initiate structural reform in economy

March 25, 2019

Prize bonds investment soars by 17.07 percent to Rs929.64bn

KARACHI: The investment in prize bonds has soared to Rs929.64 billion by January 2019 as compared with Rs794.09 billion by the same month of the last year, showing an increase of 17.07 percent.

According to statistics issued by State Bank of Pakistan (SBP), the savings mobilized through prize bonds had increased to Rs929.64 billion January 2019 through different categories of prize bonds.

The statistics have shown the investment in higher denomination prize bonds increased more rapidly then the lower denomination.

Following is the position of investments in different prize bonds:

(Rs in million)

S. No.	Prize Bonds	Jan 2019	Jan 2018	% Increase
01	Rs100	9,771	8,795	11.09
02	Rs200	29,325	27,076	8.30
03	Rs750	98,590	86,520	13.95
04	Rs1,500	105,019	90,078	16.58
05	Rs7,500	96,221	75,317	27.75
06	Rs15,000	173,803	144,780	20.04
07	Rs25,000	156,923	135,080	16.17
08	Rs40,000	259,130	225,586	14.86

March 24, 2019

Pakistan’s forex reserves increase to $15.71 billion

KARACHI: Pakistan’s foreign exchange reserves have increased by $743 million to $15.709 billion with inflows of $1 billion from UAE.

The total reserves of the country increased to $15.709 billion by week ended March 15, 2019 as against $14.966 billion a week ago, according to data of State Bank of Pakistan (SBP) issued on Thursday.

During the week ending March 15, 2019, SBP received inflow of $1 billion from UAE as placement of funds.

After taking into account outflows relating to external debt and other official payments, SBP reserves increased by $716 million during the week, SBP said.

The official reserves of the central bank increased to $8.838 billion by week ended March 15 from the level of $8.122 billion a week ago.

Similarly, the foreign exchange reserves held by commercial bank have increased by $27 million to $6.87 billion from previous week’s level of $6.843 billion.

March 21, 2019
Investment in registered prize bonds surges by 30pc

ISLAMABAD: The investment into premium prize bonds of Rs40,000 has registered significant increase of 30 percent owing to attractive avenue for persons having legitimate money.

The investment into the premium prize bonds increased to Rs5.86 billion by January 2019 as compared with Rs4.52 billion in the same period of the last year.

In order to promote documentation of economy, the registered bonds with denomination of Rs40,000 was launched two years ago.

The first prize of the premium bond is Rs80 million and the winner of the draw will get the prize money directly to his bank account.

The registered bond is only issued against Computerized National Identity Card (CNIC) and account maintenance certificate of the account number mentioned in application.

The bond has bi-annual profit at three percent per annum for all premium prize bond holders.

March 21, 2019
Credit Suisse consultants for RLNG plants privatization

ISLAMABAD: The government has accorded approval to a consortium led by Credit Suisse to act as financial consultants for the privatization of the RLNG power plants.

The approval was given at a meeting of the Board of Privatization Commission chaired by Federal Minister of Aviation and Privatization Muhammad Mian Soomro.

The transparent and appropriately appraised value of privatization of state owned enterprises is one of the major priorities of the current government and shall be successfully undertaken with due regard to every possible minutiae, Soomro said.

The meeting was attended by Secretary Privatization Rizwan Malik and the board members of the Privatization Commission.

A number of essential issues were on the agenda. The Minister was briefed about the progress made in the Privatization process of a number of state owned enterprises.

These enterprises include Mari Petroleum, SME Bank and First Woman’s Bank. Other state owned entities which are to be privatized on priority basis were also discussed. These include Services Hotel and Convention Centre, Islamabad.

The Minister was apprised of the current status of the process for each entity and the Minister ordered that it should be ensured that every possible step is taken to ensure a transparent and financially feasible privatization.

The meeting also confirmed the minutes of the Third Meeting (03/2018) of Privatization Commission Board which was held on 18th December, 2018 and also reviewed the status of decisions of the Third Meeting of the PC Board. The appointments of Consultants of the Privatization Commission were also discussed.

It was also decided in the meeting that a steering committee headed by the Minister for Privatization, including relevant stakeholders shall over see the implementation process of privatization.

March 21, 2019
Informal donations prone to money laundering: SECP

KARACHI: Pakistan has been rated amongst most charitable nations in the world but most donations are routed informally which makes the whole exercise prone for terror financing and money laundering, Waseem Ahmad Khan, Additional Director, Securities and Exchange Commission of Pakistan (SECP) said on Wednesday.

He was addressing at a seminar organized by Karachi Tax Bar Association (KTBA) at auditorium of Regional Tax Office (RTO) Karachi.

He said that SECP and State Bank of Pakistan (SBP) had taken initiatives to fix the issues on Anti Money Laundering (AML)/Countering Financing Terrorism (CFT) pointed out by Financial Action Task Force (FATF).

He informed the participants that FATF is a 37-member global body established in 1989 with mandate to combat money laundering, terror finance and nuclear non-proliferation. Besides it has also associates observers.

Pakistan as a member has international obligations to comply with FATF recommendations and correspondingly it had promulgated relevant laws including Anti-Terrorist Act, 1997, Anti-Money Laundering Act, 2010, National Counter Terrorism Act, 2013 etc. and had also devised national action plan.

Waseem Ahmad said that the SECP was undertaking enhanced due diligence on the basis of territorial / geo-political basis, sectoral lines and channel of donations.

In order to realize the full impact of spirit of generosity of Pakistan horizontally, he suggested risk management should be set up by every non-profit organization (NPO).

Khalid Mahmood, President, KTBA, in his welcome address thanked the speaker and audience who attended the seminar in a big number. The even was moderated by KTBA vice president Zeeshan Merchant.

March 20, 2019
Younus Dagha posted as Secretary Finance

ISLAMABAD: The government has posted Younus Dagha, BS-22 officer of Pakistan Administrative Service as Secretary Finance Division with effect from March 22, 2019.

Younus Dagha has been transferred from the present post of Secretary, Commerce Division, a notification issued by Establishment Division on Wednesday.

According to profile Mohammad Younus Dagha, born on April 23, 1962, is a career Civil Servant having joined the Government of Pakistan in 1985.

He possesses varied experience in the fields of Energy, Finance, Commerce, International Trade and Public Administration. He holds post graduate degrees in Business Administration, Economics, Law and Commerce equipping him with required academic background to adeptly manage multifaceted assignments in his career.

During an illustrious career spanning over 20 years, he has successfully accomplished many challenging assignments. From being an Administrator at various tiers in the Provinces of Sindh and Khyber Pakhtunkhwa to Project Director in mega projects,

Dagha possesses a vast and varied experience. He was assigned the challenging task of bringing country’s unutilised energy treasure in the Thar Coalfields to fruition – an immense natural resource with a potential of 175 billion tons of lignite coal, which till then had become an abject failure.

Dagha conceived and successfully executed a plan to bring back the local and international investors’ interest in the development of the Thar coalfield.

The JV between the GoSindh and Engro, known as Sindh Engro Coal Mining Company is now set to become the largest Public Private Partnership Company in Pakistan.

As Secretary Investment in Sindh, Dagha facilitated numerous Wind Energy projects in Jhampir-Gharo Wind Corridor which are now fast reaching their execution stage.

Similarly, during his stay in Gilgit-Baltistan as Chief Secretary, he played a vital role in facilitating land acquisition and resettlement process which is at a final stage now.

Younus Dagha joined as Federal Secretary in the Ministry of Water and Power on 17th Oct 2014, at a difficult juncture when the power sector was facing multiple crises. Power outages, especially in the Industrial sector, were taking a toll on the economy, causing frequent protests.

The inter-corporate (circular) debt in the sector was continuously mounting at a pace of Rs. 14.5 billion every month, the generation had retarded due to drying cash flow and no new investments were forthcoming under serious doubts over sector’s capacity to pay.

The ensuing year 2015 became a game changer for the power sector. Benefitting from the assiduous management, effective monitoring and better financial controls brought in by Dagha, the power sector witnessed a major turnaround.

The investors, especially under China-Pakistan Economic Corridor, were provided with the required policy incentives and facilitation to ensure timely initiation of the new generation and transmission projects.

The result was that 2015 became the best performance year for the power sector not only in the history of the country but in the entire region.

Country’s exports were in continuous decline for the last three years and a BoP crisis seemed imminent when Dagha was appointed as Secretary Commerce in April 2017, to salvage the grim situation.

On assuming charge as the new Secretary, Dagha chalked out an elaborate reform agenda for the Ministry of Commerce and its attached organizations.

Ranging from Governance Reforms to Policy, Institutional and Commercial Diplomacy, all critical facets affecting the performance of the Ministry were revamped.

In a short span of nine months he was able to secure and successfully implement a Prime Minister Export Enhancement Package to the tune of Rs. 180 billion for supporting the export industry.

On the policy side, his achievements include; rationalization of imports, effective enforcement of SPS standards, simplification of procedures, formulation of e-commerce framework and preparation of five year Strategic Trade Policy Framework to provide a long-term predictable regime.

His accomplishments in the area of Commercial Diplomacy comprise successful midterm review of GSP plus, launching of ‘Look Africa Plan’ market access strategy for South American region, unilateral expansion of Indonesia Pakistan Preferential Trade Agreement to include Pakistan’s priority export products, breaking the deadlock of long stalled negotiations on 2nd Phase of Pakistan China FTA and putting in place a robust monitoring mechanism to evaluate performance of the trade officers posted abroad.

By far his most remarkable initiative is the launching of “Emerging Pakistan” campaign to successfully brand country’s image internationally.

As a result of his prudent and timely interventions the decline in exports was not only arrested but put on a growth trajectory. Between July to December, 2017 the exports registered an average growth of 12 percent.

Apart from this, Dagha’s tenure in the Finance Ministry as Special Assistant to FM and Additional Secretary (External Finance) provided him the insight into the working of the International Financial Institutions.

March 20, 2019