Pakistan Economy

Welcome to our Community
Wanting to join the rest of our members? Feel free to sign up today.
Sign up
Apr 11, 2017
131
1
18
IMF allows Pakistan to issue fresh sovereign guarantees of Rs250b - Express Tribune

IMF allowed Pakistan to issue fresh sovereign guarantees of Rs250 billion to reduce circular debt in the energy sector and in other areas as well.

Earlier, the global lender had capped sovereign guarantees at Rs1,265 billion or 3.6% of gross domestic product (GDP) under the $6-billion loan programme, formally launched in July.

The ceiling compelled the government to shelve the planned second Sukuk (Islamic bond) issue of Rs200 billion designed to reduce the circular debt in July 2019.

The government had also shelved the formal launch of the stock market support fund of Rs20 billion, which was aimed at reviving the dwindling Pakistan Stock Exchange (PSX).

Details - https://bit.ly/2Qt8hOO
 
Apr 11, 2017
131
1
18
CPEC effect: Taiwanese textile companies may relocate to Pakistan

Being a cheap labour market, Pakistan can transform into an excellent destination for Taiwanese textile companies, which are willing to relocate their units outside Vietnam, said Taiwan Textile Federation President Justin Huang.
“At present, Vietnam is crowded, which causes difficulties for Taiwanese textile firms there, such as labour shortages,” Justin said in an interview with The Express Tribune. “In Pakistan, however, labour issues will not emerge at least for the next 10 years and this is something attractive for us.”
He pointed out that China had invested massively in Pakistan’s infrastructure development projects under the China-Pakistan Economic Corridor (CPEC) and stressed that Taiwanese businessmen could take maximum advantage from such investment.
Pakistan had a duty-free export agreement with the European Union and in December, the second phase of a free trade agreement (FTA) with China would also become functional, which would prove to be helpful for the Taiwanese investors and trade and industrial development in Pakistan, he said.
“We are different from China and other countries because we focus more on technical and functional textiles,” he emphasised.

https://tribune.com.pk/story/210099...extile-companies-may-relocate-pakistan/?amp=1
 
Apr 11, 2017
131
1
18
*MORNING NEWS*
*Monday, November 18, 2019*

*Worst is over, Hafeez tells business leaders in Karachi* | In a two-hour long interaction with large foreign investors of the country, Finance Adviser Hafeez Shaikh faced industry concerns https://bit.ly/2NVg1rc

*IMF allows Pakistan to issue fresh sovereign guarantees of Rs250b* | The International Monetary Fund (IMF) has allowed Pakistan to issue fresh sovereign guarantees https://bit.ly/2NSbA0n

*EU offers technical assistance on FATF action plan* | The European Union has offered technical assistance to Pakistan for implementation https://bit.ly/2CP1JSu

*Foreign debt servicing surges past $3bn in July-September* | The country’s external debts and liabilities increased by $543 million in the first quarter https://bit.ly/32XM3qF

*Increasing non-tax revenue top priority: PM* | Prime Minister Imran Khan on Friday reviewed the pace of privatisation https://bit.ly/2NTpuz8

*Business community rejects draft amendments to IT Rules 2002* | The business community has rejected the draft amendments to Income Tax Rules 2002 https://bit.ly/2KrJmHA

*Pakistan seeks LNG cargo for February* | Pakistan issued a tender on Friday to buy a cargo of liquefied natural gas (LNG) for delivery in February 2020 https://bit.ly/2KtpQum

*Foreign investors exploring Pakistani markets: Alvi* | President of Pakistan Dr Arif Alvi has said that country's exports are increasing and foreign investors are exploring https://bit.ly/2NXJHEh

*Asian Bank evaluating KP’s hydropower dam proposal* | The Asian Development Bank (ADB) is evaluating a proposal of the Khyber Pakhtunkhwa government https://bit.ly/2CP2iMb

*BMP for reducing prices of fertilisers and power tariff’s rate* | Secretary General (Federal) of the Businessmen Panel and Former Chairman FPCCI Standing Committee https://bit.ly/2NSxReo

*NKATI urges SSGC to address possible gas pressure reduction plan* | …have expressed concerns over possible gas pressure reduction in winter and demanded https://bit.ly/33SkznW

*BMP endorses Pak-China consensus on CPEC’s direction* | The Businessmen Panel of the Federation of Pakistan Chambers of Commerce and Industry has announced …https://bit.ly/2XkySPq

*Cement exports rise by 16.48pc in four months of July-Oct* | The cement exports from the country registered a jump of around 28 % during Oct 2019 https://bit.ly/32R1y3F

*Tomato price again crosses Rs300 mark in Karachi markets* | Traders on Saturday increased the per kilogram price of tomato to Rs300-320 from Rs240-250 per kg https://bit.ly/2QqoLat

*Policy Board directs SECP to recall officers deputed at NAB, FIA* | he Securities and Exchange Policy Board (SEPB) expressed dismay with the Securities and Exchange Commission of Pakistan (SECP) https://bit.ly/37cSYQs

*China, Pakistan, Sri Lanka to work for Micro-BRI* | “International Research Center for Neo China Socialism desires to work with Employers Federation of Pakistan and Employers… https://bit.ly/2rKio7x

*Oil Holds Near Eight-Week High on U.S.-China Trade Deal Optimism* | Oil held gains near the highest close in eight weeks https://bloom.bg/2XoKOzZ

_IsmailIqbal Securities_
 
Apr 11, 2017
131
1
18
Prisoners of elitism

Last week Dr Hafeez Sheikh was under public scrutiny for being oblivion to the rising price of tomatoes

The issue that needs reflection is the disconnect of the elite from the ground realities of common man. Food prices constitute around half of consumer basket for lowest income groups, while for elite, it's a non-issue.

Recently, one of the multilateral dignitaries visiting from DC in a closed group discussion surrounded by elite said that there is a disconnect between the elite and the poor. The gist was that there are two kinds of Pakistan – one is for the elite which is at par with any part of the world while the masses live in a different Pakistan.

https://www.brecorder.com/2019/11/17/545097/prisoners-of-elitism/
 
Apr 11, 2017
131
1
18
Circular Debt to be Eliminated by December 2020: Dr. Hafeez Shaikh

November 18, 2019: Advisor to the Prime Minister on Finance & Revenue Dr. Hafeez Shaikh met with leading anchorpersons of electronic media and briefed them about the economic performance of the government in the first quarter of the current Fiscal Year-2019-20.

The Advisor to the Prime Minister on Finance & Revenue informed them about the precarious economic situation left by the previous government and the challenges the present government had to take more than a year ago. He highlighted that bilateral agreements with the friendly countries and the assistance provided by IMF helped to ease pressure on the economy.
The Advisor to the PM on Finance and Revenue Dr. Hafeez Shaikh added that the IMF team in its first review has given a very satisfactory report on the economic performance of the government in the first quarter of the current Fiscal Year 2019-20. The media persons were informed that the government will utilize all its energies to increase the revenue and decrease the expenditures in the remaining quarters of the current fiscal year.

The Advisor to PM on Finance and Revenue reiterated the steps taken in the budget 2019-20 to curtail expenditures and allocation of increased budget for PSDP and poverty alleviation programs. The government granted exemption of tax on exports and decided to provide subsidy on electricity and gas to the export industry in the budget.

https://mettisglobal.news/circular-debt-to-be-eliminated-by-december-2020-dr-hafeez-shaikh
 
Apr 11, 2017
131
1
18
CAD turns positive after four years
Response to policy actions is significantly better than expectations

Pakistan’s Current Account Balance turned to surplus in Oct-20, clocking in at USD99mn vs a deficit of USD1,280mn in the same month last year. We reiterate that response to policy actions is significantly better than our projections, as monthly Current Account numbers continue to beat our expectations, see our report titled ‘Don’t expect easing to begin just yet’ dated 28th Oct 2019. We see this development to be significantly positive for the equity market, and expect the rerating phenomenon to continue. We maintain our view on interest rates where we see the Monetary Policy Committee (MPC) to take a wait and see approach in the upcoming meeting.


Alfalah CLSA Securities (Private) Limited

 
Apr 11, 2017
131
1
18
A surplus after 3.5 years! Yet, the financial account should remain a topic of conversation

November 19, 2019 (JS Research)

After nearly three and a half years, the current account finally turned positive, eking out a surplus of US$99mn in Oct-2019, compared to deficits of US$284mn and US$1,280mn in Sep-2019 and Oct-2018, respectively.

On MoM basis, overseas workers' remittances increased by 14% (~US$250mn) and were the primary factor in the improvement in the current account, whereas 80% MoM increase in other current transfers (US$120mn) also helped turn around the deficit.

During the remainder of FY20, the outcome of how the government attracts FDI, flows in local currency government bonds and privatization as well as issuance of foreign currency debt remains to be seen, and this will have a direct bearing on the fate of the rupee.

JS Research
 
Apr 11, 2017
131
1
18
*MORNING NEWS*
*Friday, November 22, 2019*

*SBP’s forex reserves rise* | The central bank’s foreign exchange reserves increased $45 million to $8.442 billion during the week ended November 15, the State Bank of Pakistan said on Thursday https://bit.ly/33fywLC

*FBR to start implementation of reforms package from July 1, 2020* | The Federal Board of Revenue (FBR) has envisaged its internal deadline for preparation of blueprint of proposed reform package till January 2020 with the expectation that the government will start implementation on it from July 1, 2020 https://bit.ly/2D85cM9

*AIIB pledges $112 million for Karachi’s water, transport sectors* | he Asian Infrastructure Investment Bank (AIIB) has committed $112 million of investment to improve water and transport services in the country’s industrial hub https://bit.ly/2pJLkvW

*Electric vehicles to trim annual oil import bill by $2bln: PM adviser* | Introduction of electric vehicles in Pakistan will save the country around $2 billion spent annually on oil imports, while they are expected to provide consumers with car maintenance cost benefits https://bit.ly/2XBR1IJ

*Power tariffs increased by Rs 1.83/unit* | National Electric Power Regulatory Authority (Nepra) has increased tariffs of power Distribution Companies (Discos) by Rs 1.83 per unit for the month of September 2019 under monthly fuel price adjustment mechanism https://bit.ly/2pGXuWr

*Hafeez for early resolution of govt-Etisalat dispute* | Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh has asked the stakeholders to finalize proposals in a couple of weeks for resolving dispute with Etisalat for release of “pending $800 million” of PTCL privatization. https://bit.ly/2XBzbp9

*Second phase of CPEC to start with Rashakai SEZ next month* | Speaker National Assembly Asad Qaiser has said that second phase of China-Pakistan Economic Corridor (CPEC) would start next month with groundbreaking of Rashakai Special Economic Zone https://bit.ly/2KKNMJX

*Stocks in Asia Edge Up as Trade Outcome Mulled: Markets Wrap* | Asia stocks saw modest gains Friday amid muted volumes, as investors awaited further details on U.S.-China trade discussions https://bloom.bg/2O7poEm

*Oil rises on hopes of OPEC cut extension, U.S.-China trade deal* | Oil prices rose nearly 2% on Thursday following a Reuters report that OPEC and its allies are likely to extend output cuts until mid-2020, while fresh signs emerged that China had invited U.S. trade negotiators for a new round of talks https://reut.rs/2QDnGvY

_IsmailIqbal Securities_
 
Apr 11, 2017
131
1
18
Monetary Policy Statement : Status Quo
22-Nov-2019


Monetary Policy Statement
Policy Rate unchanged at 13. 25%

SBP has kept the monetary policy rate unchanged at 13. 25% in the MPS announced today (Nov 22, 2019). The MPC has taken into account the recent surge in inflationary readings post hike in perishable food items and believes the current policy rate is suitable to help keep inflation contained.

Key rakeaways from the Monetary Policy Statement

Inflationary readings appear on the higher side
  • Although temporary in nature, perishable food items have pulled up inflation on the higherside.
  • Improvement on the external account and fiscal prudence have also generated positive sentiment
  • Moreover, inflation remains widely unaffected, with the SBP's target set between the range of 11-12% for FY20.
Economic Developments weighted in
  • Key economic developments in the real, external and fiscal sectors, since the last MPS were taken into consideration with the impact on the monetary conditions and inflation alsoweighted in.
3 major developments since the last MPC meeting
  • To begin with, the current account balance turned positive in Oct'19 post a period of four years which indicates defusing pressures on the external front.
  • In addition, the government's primary balance is set to post a surplus in 1QFY20. This is a significant feat since this was last witnessed in 2QFY16 and it surpasses the condition set by the IMF to achieve a primary balance of negative 0.6% in FY20. Whereas a halt in deficit monetization (borrowing from the SBP by the government) shall improve the inflation outlook.
Screenshot 2019-11-23 at 10.49.14 PM.png

Finally, the latest business confidence survey implies that businesses too foresee inflation to depict a downfall in the near term, in spite of the recent hike which appears temporary amid shortage of perishable food items,

Real sector
  • Latest economic data suggests that economic activity has picked up in export-oriented and import competing sectors. Albeit, industries relying more on domestic operations (inward oriented sectors), continue to bear the brunt of overall economic slowdown
  • Pertinently, the LSM data indicates growth in electronics, engineering goods and fertilizer sectors whereas auto, foDd, and construction allied industries of steel and cement depict a decline.
  • Projections of the agriculture sector are expected to meet expectations underscored by the latest estimates for major kharif crops. Albeit, production of cotton may be underwhelming.
  • That said earlier forecasts for GDP growth in FY20 by the SBP have been kept unchanged at 3.5%.
Screenshot 2019-11-23 at 11.04.16 PM.png
 
Last edited: