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  • Pakistan’s inflation increases by 23.8pc in November 2022

    Pakistan’s inflation increases by 23.8pc in November 2022

    Pakistan’s headline inflation based on Consumer Price Index (CPI) increased by 23.8 per cent in November 2022, according to official data revealed on Thursday.

    CPI inflation General, increased to 23.8 per cent on year-on-year basis in November 2022 as compared to an increase of 26.6 per cent in the previous month and 11.5 per cent in November 2021. On month-on-month basis, it increased to 0.8 per cent in November 2022 as compared to an increase of 4.7 per cent in the previous month and an increase of 3.0 per cent in November 2021.

    READ MORE: Headline inflation surges by 26.6% in October 2022

    CPI inflation Urban, increased to 21.6 per cent on year-on-year basis in November 2022 as compared to an increase of 24.6 per cent in the previous month and 12.0 per cent in November 2021. On month-on-month basis, it increased to 0.4 per cent in November 2022 as compared to an increase of 4.5 per cent in the previous month and an increase of 2.9 per cent in November 2021.

    READ MORE: Pakistan’s headline inflation rises 23.2% in September 2022

    CPI inflation Rural, increased to 27.2 per cent on year-on-year basis in November 2022 as compared to an increase of 29.5 per cent in the previous month and 10.9 per cent in November 2021. On month-on-month basis, it increased to 1.3 per cent in November 2022 as compared to an increase of 5.0 per cent in the previous month and an increase of 3.1 per cent in November 2021.

    READ MORE: Pakistan’s headline inflation hits 47-year high in August 2022

    Sensitive Price Indicator (SPI) inflation on YoY increased to 27.1 per cent in November 2022 as compared to an increase of 24.0 per cent a month earlier and an increase of 18.1 per cent in November 2021. On MoM basis, it increased by 6.1 per cent in November 2022 as compared to a decrease of 1.5 per cent a month earlier and an increase of 3.6 per cent in November 2021.

    READ MORE: Pakistan inflation hits 14-year high at 25% in July

    Wholesale Price Index (WPI) inflation on YoY basis increased to 27.7 per cent in November 2022 as compared to an increase of 32.6 per cent a month earlier and an increase of 27.0 per cent in November 2021. On MoM basis, it decreased by 0.02 per cent in November 2022 as compared to a decrease of 0.5 per cent a month earlier and an increase of 3.8 per cent in corresponding month i.e. November 2021.

  • Pakistan slaps 5pc regulatory duty on yarn import

    Pakistan slaps 5pc regulatory duty on yarn import

    ISLAMABAD: Pakistan on Tuesday slapped regulatory duty at 5 per cent on the import of filament yarns.

    The 5 per cent regulatory duty would be imposed on filament Yarns falling in Pakistan Customs Tariff (PCT) of 5402.3300, 5402.4600, 5402.4700, 5402.5200 and 5402.6200.

    The decision has been taken at a meeting of Economic Coordination Committee of the Cabinet (ECC) which was presided over by Finance Minister Ishaq Dar.

    READ MORE: PYMA urges government not to impose regulatory duty on yarn

    Ministry of Commerce submitted a summary on Individual Tariff Rationalization proposal from different sectors for review of Regulatory Duties (RDs). The ECC after discussion approved the proposal to reduce RD on Disodium Carbonate (PCT – 2836.2000) from current rate of 20 per cent to 10 per cent and imposed RD at rate of 5 per cent on filament Yarns (PCT 5402.3300, 5402.4600, 5402.4700, 5402.5200 and 5402.6200).

    Federal Minister for National Food Security and Research Tariq Bashir Cheema, Federal Minister for Power Khurram Dastgir Khan, Federal Minister for Industries and Production Syed Murtaza Mahmud, Federal Minister for Information and Broadcasting Ms. Marriyum Aurangzeb, Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal, Shahid Khaqan Abbasi MNA/Ex-PM, SAPM on Finance Tariq Bajwa, SAPM on Revenue Tariq Mehmood Pasha, Coordinator to PM on Commerce and Industry Rana Ihsan Afzal, Federal Secretaries, Chairman Federal Board of Revenue (FBR) and other senior officers attended the meeting.

    READ MORE: ECC approves raising petroleum levy to Rs50 per liter on RON 95

    Finance Division submitted a summary on launch of Credit Guarantee Scheme under Credit Guarantee Trust Fund through Second Supplemental Trust Deed.

    It was presented that Pakistan Mortgage Refinance Company Limited (PMRC) has been setup as a joint initiative of the government of Pakistan and Commercial Banks/Development Finance Institutions (DFIs) to provide medium and long term funding to primary mortgage lenders by raising from the capital debt market at cheaper rates.

    PMRC being the trustee launched a scheme titled, Credit Guarantee Trust Scheme under the First Supplemental Trust Deed.

    To expand the provision of risk cover to FIs against financing in housing sector, the WB approved an additional credit line to the government of Pakistan for housing finance project which may be passed on to Credit Guarantee Trust Fund.

    READ MORE: Petroleum sales decrease by 22% in four months of 2022-2023

    In view of above, the ECC allowed to launch a new scheme titled, Credit Guarantee Trust Scheme for low income housing through Second Supplemental Trust Deed with an amount of $85 million to be obtained from the World Bank (WB) to provide risk cover to financing institutions against their financing in housing sector.

    Ministry of National Food Security and Research submitted a summary on fixation and notification of Minimum Indicative Prices of Tobacco Crop 2023. After detailed deliberation, the ECC approved minimum indicative prices for various types of tobacco for different areas for 2023 tobacco crop as under: S. No Types of Tobacco Minimum Indicative prices for 2023 Crop (Rs. Per Kg) 1. Flue Cured Virginia (FCV) i. Plain Area ii. Sub-mountainous Area 310 351 2. Dark Air-Cured Tobbaco (DAC) 190 3 White Patta 146 4. Burley 223 5. Naswar/ Snuff/Hookah and other Rustica tobacco and its products 146 6.

    Sun Cured Virginia (SCV) 200 Power Division submitted a summary on Uniform tariff for K-electric. It was submitted that KE applicable uniform variable charge is required to be modified to maintain the uniform tariff across the country with category wise increases including general supply tariff – residential, general supply tariff – commercial, industrial supply tariff, bulk supply tariff, agriculture tariff, and public lighting with recovery period of four months.

    READ MORE: K-Electric posts huge losses despite 144% jump in tariff adjustment revenue

    It was also shared such adjustment shall be applicable on the consumption from October 2022 to January 2023 to be recovered from consumers in December 2022 to March 2023, respectively.

    The ECC after deliberation approved this proposal. Power Division submitted another summary on settlement of payables to Government Owned Power Plants at par with IPPS. The ECC approved Technical Supplementary Grant of Rs. 93.438 billion in three tranches of Rs. 31.146 billion each.

    The ECC discussed summary submitted by Ministry of National Food Security and Research submitted on Kissan Package-2022 and approved base tariff for electric tube wells at Rs. 13/kWH from Rs. 16.60/kWH, providing relief to farmers of Rs. 3.60/kWH effective from November 01, 2022 to compensate the damage caused by the floods and heavy rains.

    Ministry of Information and Broadcasting submitted a summary for allocation of budget to launch comprehensive media awareness campaign on government initiatives, programmes and projects. The ECC after detailed discussion approved Supplementary Grant of Rs. 2 billion for flood related media campaigns.

    ECC approved Rs. 15 billion in favour of Election Commission of Pakistan for Current Financial Year 2022-23. Out of Rs. 15 billion, Rs. 5 billion will be released immediately while the balance will be released in tranches on utilization of the first tranche.

    The ECC also approved Technical Supplementary Grant amounting to Rs. 162.521 million in favour of Ministry of Housing and Works in addition to approving Rs. 250 million for execution of development scheme titled “Construction of Railway underpass, Gojra, District Toba Tek Singh” and Rs. 144.210 million for execution of development schemes in District D.I. Khan.

  • Pakistan will repay foreign debt on time: Dar

    Pakistan will repay foreign debt on time: Dar

    ISLAMABAD: Finance Minister Ishaq Dar Tuesday said that the Pakistan will repay foreign debt against international bonds on time.

    The finance minister said at a meeting with a delegation of institutional investors at Finance Division.

    Ishaq Dar further asserted that present government aims at successfully completing the IMF program and shared that the government will repay the international bonds on time. Further, there was no plan to approach Paris Club.

    READ MORE: Pakistan repays $1.8 billion in November 2022: SBP

    He further asserted that present government is committed to honor all of the financial commitments made by the present as well previous government with national and international financial institutions.

    The delegation comprised of Managing Director Khurram Sheikh and Ms. Alia Moubayed from Jefferies, Mahmood Ali Shah Bukhari – CEO K-trade, Vice President Luis Assad Simon Tamborrel from Goldman Sachs Asset Management, Co-Chief Investment Officer James Edmon Craige from Stone Harbor Investment Partners, Portfolio Manager Carl Vermassen from Vontobel Asset Management.

    While SAPM on Finance Tariq Bajwa, SAPM on Revenue Tariq Pasha, Special Secretary Finance and other senior officers from Finance Division also attended the meeting.

    READ MORE: State Bank stuns market with massive policy rate hike

    The delegation discussed about the economic situation and outlook of the country. The delegation held a comprehensive discussion with the Finance Minister regarding IMF program, flood related expenditure and losses, market perception and outlook, as well as external account situation.

    The Finance Minister welcomed the delegation and assured the delegation that the present government has taken all pragmatic measures to facilitate the business environment in Pakistan.

    READ MORE: SBP raises benchmark interest rate by 100 basis points to 16pc

    He shared that Pakistan is slowly but gradually moving toward economic stability and it is high time to invest in Pakistan. It was shared that reconstruction and rehabilitation phase will start in the coming months. The Finance Minister appreciated the friendly countries for their flood relief support.

    In conclusion, the delegation thanked the Finance Minister for their positive response and support.

    READ MORE: SBP keeps policy rate unchanged at 15% amid economic deceleration

  • Pakistan out of default risk: PM Shehbaz

    Pakistan out of default risk: PM Shehbaz

    ISLAMABAD: Prime Minister Muhammad Shehbaz Sharif Tuesday said Pakistan is out of default risk due to difficult decisions taken by the present government.

    The prime minister said the government was taking all possible steps to further strengthen the national economy and was striving with priority measures to reduce price hike and provide relief to the common people.

    The prime minister expressed these views while talking to a delegation of Jefferies, a leading global investment banking and capital markets firm. Minister for Finance Ishaq Dar was also present during the meeting.

    The prime minister regretted that unfounded rumours were being spread about the economy of Pakistan and reprehensible efforts were being made to create havoc.

    He said the coalition government without caring for the political price, saved the country from the repercussions of the previous four years’ maladministration by the former government.

    He also reiterated that the government was making efforts to reduce the foreign trade deficit and providing all possible facilities to the foreign investors. 

    Welcoming the delegation, the prime minister invited the firm to open its office in Pakistan.

    The delegation termed the economic recovery of Pakistan as a good sign under the leadership of prime minister that faced the economic challenges in an effective manner and put the country on the path of economic stability.

  • Pakistan repays $1.8 billion in November 2022: SBP

    Pakistan repays $1.8 billion in November 2022: SBP

    KARACHI: Pakistan has repaid an amount of $1.8 billion against foreign loans during November 2022, the central bank said in an analyst briefing on Friday.

    According to Insight Securities (Pvt) Limited, commenting on foreign loan payment, SBP governor highlighted that during the month of November 2022, the central bank had repaid loan of $1.8 billion. While another amount of $1.08 billion will be paid on December 02, 2022.

    READ MORE: State Bank stuns market with massive policy rate hike

    The upcoming payment will be financed by inflows from World Bank, Asian Development Bank and Asian Infrastructure Investment Bank. Furthermore, governor commented that $500 million from AIIB is expected to hit central bank reserves on Tuesday.

    Furthermore, Governor State Bank assured the market participants that the country will timely repay its debt payments and necessary inflows would be arranged from multilateral institutions along with certain rollovers.

    READ MORE: SBP raises benchmark interest rate by 100 basis points to 16pc

    In an unexpected move, the SBP on November 25, 2022 increased policy rate by 100 basis points to clock in at 16 per cent.

    SBP highlighted that the inflationary pressures have become more persistent, as evident from rising core inflation. Therefore, to control the impact of persistent and sticky rise in price levels, SBP’s Monetary Policy Committee (MPC) decided to hike benchmark rate by 100bps.

    After the assessment of floods, SBP expects GDP growth of 2 per cent in the fiscal year 2022-2023, while current account deficit is projected to clock in at 3 per cent of GDP.

    READ MORE: SBP keeps policy rate unchanged at 15% amid economic deceleration

    Due to strong rise in core inflation coupled with higher food prices, SBP has also revised its inflation projections of average inflation from 18-20 per cent to 21-23 per cent.

    In real sector, major demand indicators have started to show moderation in first four months (July – October) 2022-2023, where sales of cement, petroleum products and automobiles have witnessed a slowdown. Similarly, electricity generation has witnessed a decline for the fifth consecutive month.

    Furthermore, damages to crops amid recent floods will result in lower agri output, which is evident from decline in rice and cotton output. In addition, private sector credit has also shown moderation in the first quarter of the current fiscal year.

    READ MORE: SBP keeps benchmark rate unchanged at 15% amid rising inflation

    On external front, current account deficit has witnessed significant moderation in first four months of the fiscal year to clock in at $2.7 billion as compared to $5.3 billion in same period last year. The improvement is mainly attributable to reduction in imports, however, slowdown in export and remittances has nullified some of the benefits arising from lower imports.

    The recent turmoil in domestic economy coupled with uncertain political environment has resulted in lower inflows from multilateral institutions and friendly countries, which was further dented by tight monetary stance adopted by major central banks of the world.

    Inflation for the month of October 2022 clocked in at 26.56 per cent, primarily driven by adjustment in electricity tariff and higher food prices. Core inflation which tends to be stickier, has shown reasonable increase in few months due to 2nd round impact of higher energy prices. Therefore, SBP has revised its inflation forecast for the current fiscal year to 21-23 per cent, while its medium term inflation target still stands at 5-7 per cent for next fiscal year.

    The MPC will continue to monitor inflation trajectory and will take necessary decisions.

  • Pakistan official reserves fall to around 1 ½ months import coverage

    Pakistan official reserves fall to around 1 ½ months import coverage

    KARACHI: Pakistan’s official foreign exchange reserves have declined significantly, now covering only one and a half months of import payments, as per data released by the State Bank of Pakistan (SBP) on Thursday.

    (more…)
  • Foreign direct investment into Pakistan plunges by 52pc in 4MFY23

    Foreign direct investment into Pakistan plunges by 52pc in 4MFY23

    KARACHI: Foreign direct investment (FDI) into Pakistan has plunged by 52 per cent during first four months (July – October) of fiscal year 2022-2023 (4MFY23).

    According to data released by the State Bank of Pakistan (SBP) on Monday the FDI fell to $348 million during the first four months of the current fiscal year as compared with $726 million in the corresponding months of the last fiscal year.

    READ MORE: Foreign direct investment in Pakistan plunges by 47% in 1QFY23

    The data showed the inflows under the FDI fell by 40.3 per cent to $514 million during the period under review as compared with $862 million in the corresponding period of the last fiscal year.

    On the other hand outflows under the head of FDI recorded an increase of 22.4 per cent to $166.2 million during July – October 2022 as compared with $136 million in the same period of the last fiscal year.

    READ MORE: FATF removes Pakistan from grey list

    The outflow from stock market recorded a decline of 91 per cent during first four months. The foreign portfolio investment recorded an outflow of $15.6 million during July – October 2022 as compared with the outflow of $178.5 million in the same period of the last fiscal year.

    READ MORE: Asian Bank approves $1.5 billion to finance Pakistan

    The net inflow of total foreign private investment recorded a decline of 39 per cent to $333 million during the period under review as compared with $548 million in the corresponding period of the last fiscal year.

    Meanwhile, the public debt securities witnessed a decline in outflow during the period to $18.2 million when compared with the outflow of $60.1 million.

    READ MORE: Pakistan’s weekly forex reserves increase nominally

    The total foreign investment plunged by 36 per cent to $315 million during first four months of the current fiscal year as compared with $488 million in the corresponding period of the last fiscal year.

  • Pakistan to make payment without delay, no risk of default: Ishaq Dar

    Pakistan to make payment without delay, no risk of default: Ishaq Dar

    ISLAMABAD: Finance Minister Ishaq Dar on Saturday reiterated that Pakistan will make all its foreign payments without delay and it will never default.

    Dar strongly rejected the baseless and irresponsible statements and rumors about the country’s economy, saying that the government had arranged all international payments for the next one year.

    READ MORE: Pakistan reaffirms commitment to complete IMF program

    The finance minister said that for the past few days, baseless and irresponsible rumors had been circulating about the country’s economy just for the political objectives.

    When these rumors were spread through social media and various sources, it not only affected Pakistan’s economy and economic interests, but also impacted the affairs and transactions with their bilateral and multilateral partners, he opined.

    READ MORE: Pakistan textile exports decline by 11pc amid global economic slowdown

    The finance minister said that rumors were being spread that Pakistan would not be able to pay $1 billion sovereign bond (sukuk) in December. “This is baseless and contrary to facts, Pakistan has never defaulted on its international payments and will never come close to it,” he maintained.

    Rumors are also being spread about Pakistan’s credit default swap, he said, adding that they had their own ambitions and formula with regard to credit default swap, this was a baseless thing and the speculations in this regard should be stopped.

    Dar said that rumors were making rounds about the petroleum products which were also fake.

    Pakistan has reserves of petroleum products according to the country’s need and demand and there is no need for worry, he added.

    READ MORE: Industries threaten mass protest against gas supply shutdown

    Apart from disturbing the public, such rumors also created concern in the financial and international institutions and they sent questions, which not only harmed the efforts for economic interests but also wasted time, he further said.

    Ishaq Dar said that there were still rumors about the current account deficit. The current accounts are being closely monitored, professionally managed and well managed, he told and added that the current account deficit was $316 million in September, which was expected to be $400 million in October.

    READ MORE: Pakistan organizes first international housing expo next month

    “That is, by the end of the financial year, the current account deficit is likely to be 5 to 6 billion dollars, while the target of this deficit for the current financial year is 12 billion dollars. The current account deficit is expected to remain below target,” he added.

    The Finance Minister said that in the light of these facts, he appealed to all Pakistanis not to pay heed to any kind of rumors, as they accorded top priority to Pakistan and for the country’s economy, they needed to work beyond political affiliations.

  • Pakistan textile exports decline by 11pc amid global economic slowdown

    Pakistan textile exports decline by 11pc amid global economic slowdown

    KARACHI: Pakistan textile exports registered a decline of over 11 per cent Month on Month (MoM) basis in October 2022 to $1.36 billion due to global economic slowdown.

    “This is the lowest number since May 2021,” said Shameer Alam Zaidi, analyst at Ismail Iqbal Securities. He said the effect of global economic slowdown and high inventory levels held with retailers is now becoming more visible.

    READ MORE: Industries threaten mass protest against gas supply shutdown

    The fall in export value has mainly come from volumetric decline as prices of almost all categories have either increased or stayed flat. This has taken fiscal year to date exports into negative territory with 1.4 per cent decline in first four months (July – October) of fiscal year 2022-2023.

    Among value added items, bedwear has witnessed the largest decline of 19 per cent (on MoM basis), down to $217 million. Knitwear has remained on the downward path in October 2022 and declined by 10 per cent to $392 million. Among non value added items, cotton yarn has shown the largest decline of 35 per cent.

    READ MORE: Pakistan organizes first international housing expo next month

    The textile machinery imports have maintained a downward trend and are down by 21 per cent MoM to $42 million as against last 12 month average of $57 million. Raw cotton import is up 9 per cent on MoM basis, where the quantity is up 15 per cent. The cumulative import of raw cotton in first four months of the current fiscal year is up by 4.7 per cent, however the quantity imported is down by 11 per cent, which shows that the industry has not yet covered for the shortage of local cotton crop due to floods.

    The realized price of imported cotton has been recorded at $2.8 per kilogram as against 2.4/kg and 3/kg in October 2021 and September 2022, respectively.

    READ MORE: APTMA urges PM to save textile industry from total closure

    The analyst said that the textile exports are expected to remain under pressure due to lack of new orders amid global economic slowdown and high inventory levels held by US retailers.

    On domestic front, amid winter season the gas supply to textile industry has decreased as consumers are government’s first priority. “This has forced the industry to switch towards grid which is likely to hurt Sindh based exporters as the province enjoys significant lower gas rates compared to Punjab,” he added.

    READ MORE: Reducing foreign currency cash carrying limits to half criticized