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BEIJING: Pakistan Prime Minister Imran Khan held wide-ranging talks with Li Keqiang, Premier of the State Council of the People’s Republic of China on Saturday.
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BEIJING (China): Prime Minister Imran Khan on Friday invited Chinese companies to invest in Pakistan and take benefit from the business-friendly policies of the government.
The prime minister, who held a series of meetings with the executives of Chinese State-owned and private corporate sectors, said Pakistan was offering conducive environment for investment in Special Economic Zones (SEZs) under the China Pakistan Economic Corridor (CPEC).
READ MORE: Prime Minister Imran kicks off visit to China
In his remarks, the prime minister appreciated the keen interest of the Chinese companies to invest in Pakistan.
The executives who met the prime minister included leadership of China Communication Construction Company (CCCC), Huazhong Technology, Zhejiang Seaport Group, Challenge Apparel, Hunan Sunwalk Group, Royal Group, China Road and Bridge Corporation (CRBC), Zhengbang Group and China Machinery Engineering Corporation (CMEC).
READ MORE: PM Imran terms exports, tax collection must for growth
The corporate leaders briefed the prime minister on the progress of their on-going projects in Pakistan.
They evinced keen interest in expanding investments in Pakistan in projects related to recycling of metals and paper, energy, textile, fibre-optics networks, housing, dairy and water management.
READ MORE: Timelines for CPEC projects should be adhered to: PM
The CCCC is a leading global construction and infrastructure development company; Huazhong Technology, specialises in integrated papermaking equipment; Zhejiang Seaport Group is one of China’s largest port operator; Challenge Fashions is a leading textile company; Hunan Sunwalk’s core business is in communications, 3D printing and construction; Royal Group is China’s largest buffalo milk producer; CRBC focuses in civil engineering and construction projects; Zhengbang Group is Jiangxi Province’s largest agricultural enterprise; and CMEC is one of Chinese top agro-industrial machinery company.
The prime minister was joined in the meetings by federal ministers, advisers and senior officials.
ISLAMABAD: Saudi Arabia to operationalize soon the oil facility to Pakistan, it was agreed at a meeting on Thursday.
Ambassador of the Kingdom of Saudi Arabia in Islamabad Nawaf bin Saeed Al-Malkiy called on the Federal Minister for Economic Affairs Omar Ayub Khan in his office on Thursday.
READ MORE: KSA extends oil on deferred payments to Pakistan
During the meeting, it was agreed to operationalize the Saudi Oil Facility at the earliest.
The Financing Agreement worth $ 1.2 billion for import for petroleum products was signed on November 29, 2021 between the Saudi Fund for Development (SFD) and Economic Affairs Division (EAD), Pakistan.
As per Financing Agreement, the SFD will extend financing facility up to $100 million per month for one-year for purchase of petroleum products on deferred payment basis.
Both the sides discussed ongoing development projects and new initiatives.
READ MORE: SBP signs $3bn deposit agreement with Saudi Fund
The Minister for Economic Affairs appreciated the Saudi support in the priority development areas, said a press release received here today.
They also discussed the remaining work of development projects in the earthquake affected areas of Azad Jammu & Kashmir (AJK) and Khyber Pakhtunkhwa (KP).
Saudi Fund for Development (SFD) is providing financial assistance for various development projects in the areas of Energy, Health, Education and Infrastructure.
Most recently, the SFD has committed to provide financing for Mohmand Dam Project, Shounter Hydropower Project, Jagran-IV Hydropower Project, Gravity Flow Water Scheme Mansehra, and Abbottabad- Muzaffarabad Road Project.
The Saudi Ambassador assured of continued support at all level to further strengthen the bilateral economic cooperation between the two brotherly countries.
The Saudi Ambassador expressed that the Kingdom of Saudi Arabia is committed to play a much stronger role in the socioeconomic development of Pakistan.
KARACHI: Pakistan’s liquid foreign exchange reserves declined by $397 million to $22.085 billion by week ended January 28, 2022, the central bank said on Thursday.
The country’s foreign exchange reserves were at $22.482 billion by week ended January 21, 2022, the State Bank of Pakistan (SBP) said.
The official reserves of the central bank also declined by $462 million to $15.728 billion by week ended January 28, 2022 as compared with $16.19 billion a week ago. The SBP attributed the decline to external and other repayments.
The foreign exchange reserves held by commercial banks however increased by $65 million to $6.357 billion by week ended January 28, 2022 as compared with $6.292 billion a week ago.
ISLAMABAD: The Executive Board of the International Monetary Fund (IMF) on Wednesday approved sixth tranche under $6 billion Extended Fund Facility (EFF) for Pakistan.
Finance Minister Shaukat Tarin announced this in a Tweet. “I am pleased to announce that IMF Board has approved 6th tranche of their program for Pakistan.”
Pakistan will get around $1.059 billion after the IMF Board approval. The IMF on November 21, 2021 stated that its staff had completed the sixth review and the release of next tranche was subject to approval from the executive board, which was to be scheduled to meet on January 12, 2021.
READ MORE: IMF wants Pakistan to improve tax to GDP ratio to 20%
The IMF also linked the approval of the next tranche with certain conditions, including autonomy of State Bank of Pakistan (SBP) and withdrawal of tax exemptions to the tune of around Rs350 billion.
READ MORE: Pakistan to emerge as food surplus country: PM Imran
Pakistan had requested to extend the date for scheduled meeting of the IMF board up to January 28, 2022 and later it was further requested to extend up to February 02, 2022.
READ MORE: IMF intervention to add economic miseries of Pakistan
In meantime, the government presented and got approval the Finance (Supplementary) Act, 2022 and SBP Amendment Act to comply with the conditions of the IMF.
Analysts said that the transfer of latest IMF tranche would help the country to improve foreign exchange reserves besides it would also support the Pak Rupee (PKR).
READ MORE: SBP responds to misconceptions on amendments to State Bank Bill
ISLAMABAD: Pakistan’s trade deficit has widened by 92 per cent during first seven months (July – January) of fiscal year 2021/2022, official statistics revealed on Wednesday.
The trade deficit ballooned to $28.8 billion during the first seven months of the current fiscal year as compared with $15 billion in the corresponding months of the last fiscal year, according to data released by Pakistan Bureau of Statistics (PBS).
READ MORE: Pakistan’s trade deficit swells by 100% in 1HFY22
The exports exhibited a growth of 24 per cent to $17.67 billion during the period under review as compared with $14.25 billion in the same period of the last fiscal year.
Meanwhile, the import bill of the country surged by 59 per cent to $46.47 billion during first seven months of the current fiscal year as compared with $29.25 billion in the corresponding months of the last fiscal year.
READ MORE: Pakistan’s trade deficit widens by 112% to $20.59 billion
The trade deficit widened by 26.49 per cent to $3.36 billion in the month of January 2022 as compared with the deficit of $2.66 billion in the same month of the last year.
The exports increased by 18.69 per cent to $2.55 billion in January 2022 as compared with $2.145 billion in the same month of the last year.
Similarly, the imports grew by 23 per cent to $5.9 billion in the month of January 2022 as compared with $4.8 billion in the same month of the last year.
READ MORE: Pakistan’s import bill surges by 65% in four months
However, imports registered a massive decline of 22 per cent to $5.9 billion in January 2022 as compared with $7.58 billion in the month of December 2021.
Similarly, exports fell by 8 per cent to $2.54 billion in January 2022 as compared with $2.76 billion in the previous month.
The trade deficit recorded a decline of 30 per cent to $3.36 billion in January 2022 as compared with the deficit of $4.81 billion in December 2021.
READ MORE: Pakistan’s trade deficit doubles in first quarter
ISLAMABAD: The inflation based on Consumer Price Index (CPI) in Pakistan recorded at 13 per cent or 24-month high in January 2022.
Pakistan Bureau of Statistics (PBS) said on Tuesday, the CPI inflation general increased by 13 per cent on year-on-year basis in January 2022 as compared to an increase of 12.3 per cent in the previous month and 5.7 per cent in January 2021.
READ MORE: January headline inflation may clock near 13%
On month-on-month basis, it increased by 0.4 per cent in January 2022 as compared to decrease of -0.02 per cent in the previous month and a decrease of -0.2 per cent in January 2021.
The PBS said that the CPI inflation Urban, increased by 13 per cent on year-on-year basis in January 2022 as compared to an increase of 12.7 per cent in the previous month and 5.0 per cent in January 2021. On month-on-month basis, it increased by 0.1 per cent in January 2022 as compared to increase of 0.3 per cent in the previous month and a decrease of -0.2 per cent in January 2021.
READ MORE: Mini-budget likely to push up inflation: SBP
CPI inflation Rural, increased by 12.9 per cent on year-on-year basis in January 2022 as compared to an increase of 11.6 per cent in the previous month and 6.6 per cent in January 2021. On month-on-month basis, it increased by 0.9 per cent in January 2022 as compared to decrease of -0.5 per cent in the previous month and a decrease of -0.3 per cent in January 2021.
READ MORE: Headline inflation rises by 12.3% in December 2021
The inflation based on Sensitive Price Indicator (SPI) on YoY increased by 20.9 per cent in January 2022 as compared to an increase of 20.9 per cent a month earlier and an increase of 7.7 per cent in January 2021. On MoM basis, it decreased by -0.8 per cent in January 2022 as compared to decrease of -0.4 per cent a month earlier and a decrease of -0.8 per cent in January 2021.
The Wholesale Price Index (WPI) inflation on YoY basis increased by 24.0 per cent in January 2022 as compared to an increase of 26.2 per cent a month earlier and an increase of 6.4 per cent in January 2021. WPI inflation on MoM basis increased by 0.6 per cent in January 2022 as compared to a decrease of -0.2 per cent a month earlier and an increase of 2.5 per cent in corresponding month i.e. January 2021.
READ MORE: Headline inflation surges by 11.5% in November 2021
KARACHI: The headline inflation based on Consumer Price Index (CPI) may clock near 13 per cent for the month of January 2022.
Analysts at Arif Habib Limited forecast that January 2022 inflation to settle at 12.97 per cent Year on Year (YoY) compared to 5.65 per cent in January 2021 and 12.28 per cent in December 2021, respectively.
This will take the average inflation to 10.24 per cent during first seven months (July – January) 2021/2022 compared to 8.21 per cent in corresponding months of the last fiscal year.
READ MORE: Mini-budget likely to push up inflation: SBP
The YoY uptick in CPI will likely be led by Food (12.5 per cent YoY), Clothing & Footwear (13.3 per cent YoY), Alcoholic Beverages & Tobacco (2.2 per cent YoY), Housing (15.0 per cent YoY), House Hold Equipment (13.5 per cent YoY) and Miscellaneous (9.4 per cent YoY).
The analysts predicted that on a Month on Month (MoM) basis, CPI reading to increase 0.4 per cent. While Housing and Transport index are likely to keep MoM inflation up, food index is expected to decline 0.7 per cent MoM.
This is the second consecutive MoM decline in food index in the current fiscal year.
READ MORE: Headline inflation rises by 12.3% in December 2021
As per Sensitive Price Index (SPI) data published by the Pakistan Bureau of Statistics (PBS), average prices of Potatoes, Tomatoes and Condiments and Spices are expected to register a decline of 13 per cent, 35 per cent and 21 per cent MoM, respectively which will keep the food index contained.
On the other hand, prices of essential food items like Fresh Fruits and Onions are expected to increase 8 per cent MoM and 5 per cent MoM, respectively. However, quarterly adjustment in House rent and increase in petroleum products will keep the Housing index and Transport Index up 0.5 per cent MoM and 1.9 per cent MoM, respectively.
READ MORE: Headline inflation surges by 11.5% in November 2021
Inflation has witnessed slowdown recently with supply-side pressures from food showing a decline and core-inflation still under control. However, going forward we expect inflation to remain in check on account of adjustments in electricity price (base tariff hike-which is expected in phased manner), any increase in prices of petroleum products owing to higher international oil prices and surge in prices of perishable and nonperishable food items in the month of Ramadan.
The analysts expect average inflation for FY22 to remain in double digit, above 10 per cent YoY. On monetary policy front, the SBP kept policy rate unchanged at 9.75 per cent in its recent January 2022 Monetary Policy Statement (MPS).
READ MORE: Headline inflation increases by 9.2% in October
The Committee no longer targets mildly positive interest rates as it believes the current levels appear appropriate for the economy.
KARACHI: Pakistan’s liquid foreign exchange reserves plunged by $866 million to $22.482 billion by week ended January 21, 2022, the central bank said on Thursday.
The country’s foreign exchange reserves were at $23.35 billion by week ended January 14, 2022, the State Bank of Pakistan (SBP) said.
The official reserves of the central bank sharply declined by $846 million to $16.19 billion by week ended January 21, 2022 as compared with $17.036 billion a week ago.
The SBP attributed the decline to external and other repayments.
The foreign exchange reserves held by commercial banks also fell by $22 million to $6.292 billion by week ended January 21, 2022 as compared with $6.314 billion a week ago.
KARACHI: The State Bank of Pakistan (SBP) on Monday said that inflation likely to increase due to cost-push pressure from removal of exemptions in the mini-budget and rise in energy tariff.
“Together with low base effects, one-off cost-push pressures from energy tariff increases and the removal of tax exemptions in the Finance (Supplementary) Act are likely to keep year-on-year inflation elevated over the next few months, close to the upper end of the average inflation forecast of 9-11 percent in FY22,” the SBP said while announcing monetary policy for next two months.
The government presented the mini-budget on December 30, 2021. The Finance (Supplementary) Act, 2022 was implemented last week as the ministers of the government repeatedly claimed that removal of exemptions would not affect the lower income group.
READ MORE: Tax imposed to protect domestic entertainment industry
The SBP said that during FY23, inflation is expected to decline toward the medium-term target range of 5-7 percent more quickly than previously forecasted as demand-side pressures wane faster due to the Finance (Supplementary) Act and recent moderation in economic activity indicators.
While headline and core inflation rose in December, both the sequential momentum of inflation and inflation expectations of businesses fell significantly.
“At today’s meeting, the Monetary Policy Committee (MPC) decided to maintain the policy rate at 9.75 per cent, in line with the forward guidance provided in the last monetary policy statement,” the SBP added.
At that time, the MPC had considered the measures taken to lower inflation and keep the ongoing economic recovery sustainable.
READ MORE: FBR slaps sales tax at 17% on supply of food stuff
These measures include a cumulative 275 basis point increase in the policy rate, higher bank cash reserve requirements, regulatory tightening of consumer finance, and curtailment of non-essential imports.
Since the last meeting on 14th December 2021, several developments suggest that these demand-moderating measures are gaining traction and have improved the outlook for inflation. Recent economic growth indicators are appropriately moderating to a more sustainable pace.
While year-on-year headline inflation is high and will likely remain so in the near term due to base effects and energy prices, the momentum in inflation has slowed with month-on-month inflation flat in December compared to a significant rise of 3 percent in November.
READ MORE; FBR enhances tax rates on motor vehicle registration
Inflation expectations of businesses have also declined considerably. The current account deficit appears to have stopped growing since November and the non-oil current account balance is expected to achieve a small surplus for FY22.
Finally, and importantly, the enactment of the recent Finance (Supplementary) Act, 2022 represents significant additional fiscal consolidation compared to the budget and has lowered the outlook for inflation in FY23.
Looking ahead, and against the backdrop of these developments that have improved the inflation outlook, the MPC was of the view that current real interest rates on a forward-looking basis are appropriate to guide inflation to the medium-term range of 5-7 percent, support growth, and maintain external stability. If future data outturns require a fine-tuning of monetary policy settings, the MPC expected that any change would be relatively modest.
In reaching its decision, the MPC considered key trends and prospects in the real, external and fiscal sectors, and the resulting outlook for monetary conditions and inflation.
READ MORE: FBR increases income tax to 15% on cellular services
The economic recovery underway over the last 18 months continues, with its pace moderating from a rebased estimate of 5.6 percent in FY21. Since the last meeting, year-on-year growth rates of several high-frequency demand indicators either stabilized or slowed, including cement dispatches and sales of petroleum products, tractors and commercial vehicles. On the supply side, LSM production decelerated to 3.3 percent (y/y) in July-November 2021, partly reflecting a high base-effect as well as higher input costs, while electricity generation stabilized. Similarly, there has been some easing in the momentum of imports and tax revenue growth. Prospects remain favourable in agriculture, with an improved Rabi crop outlook offsetting reports of lower cotton output. Overall, growth in FY22 is expected around the middle of the forecast range of 4-5 percent, slightly lower than previous expectations in light of moderating demand indicators and higher base effects from the upward revision in last year’s growth rate. Risks to the outlook include, on the domestic front, the current growing Omicron wave and, on the external front, the possibility of faster than anticipated tightening by the US Federal Reserve and geopolitical events in Europe that may have implications for global financial conditions.
Through the first half of FY22, the current account deficit has reached $9 billion. Based on PBS data, imports rose to $40.6 billion, up around 66 percent (y/y), with energy imports and Covid vaccines accounting for more than half the rise. Encouragingly, imports excluding energy and vaccines have stabilized in the last two months. Exports grew by nearly 25 percent (y/y) to reach $15.1 billion, buoyed by record-high shipments of textiles as well as strong rice exports. Meanwhile, remittances rose by 11.3 percent (y/y) to an all-time high of $15.8 billion during the first half of the fiscal year. Looking ahead, the current account deficit is expected to decline through the remainder of FY22, as import growth slows in response to a normalization of global commodity prices and the fuller impact of demand-moderating measures. Indeed, the non-oil current account deficit is less than one-fourth the record levels reached during the first half of FY18. The current account projection is subject to risks on both sides. On the one hand, the deficit could be larger if global commodity prices take longer to normalize. On the other, it could be smaller if the fiscal consolidation associated with the Finance (Supplementary) Act has a faster and more pronounced impact on demand.
READ MORE: FBR issues new FED rates on motor vehicles
During the first half of FY22, FBR tax collections grew strongly by 32.5 percent (y/y). As a result, the fiscal deficit shrank to 1.1 percent of GDP during July-October FY22, compared to 1.7 percent of GDP during the same period last year. The primary surplus also improved by 0.1 percentage points to 0.4 percent of GDP. Looking ahead, with the passage of the Finance (Supplementary) Act that withdraws certain tax exemptions, the fiscal deficit is projected to be around 0.5 percent of GDP lower than previously expected for FY22. Together with recent policy rate increases and accounting for the usual lagged impact of fiscal measures, this additional fiscal consolidation should help further moderate the pace of domestic demand growth, and thus improve the outlook for inflation and the current account in FY23.
During the first half of FY22, private sector credit cumulatively grew by 13.4 percent, largely driven by increased demand for working capital loans especially by rice, textile, petroleum and steel industries. Since the last meeting, both short and long-term secondary market yields, benchmark rates and cut-off rates in the government’s auctions declined significantly, in line with the forward guidance provided by the MPC and the conduct of 2-month open market operations by the SBP.