Asian Development Bank sees high inflation in Pakistan
The Asian Development Bank (ADB) on Wednesday projected that inflation in Pakistan would remain the highest in the region at 7.5 percent and the economy would grow by 4 percent – the fifth lowest rate among seven South Asian nations, puncturing the government’s claim of lowest prices in the country.
The Asian Development Outlook Update (ADOU) – the twice a year flagship publication of the ADB, revealed Pakistan’s standing among peer regional countries. The ADB has not taken into account Afghanistan’s economy due to prevailing uncertainties in the country.
Pakistan’s “economy is expected to continue recovering in fiscal year 2021-22, with real GDP projected to rise by 4 percent”, according to the ADB report.
It was the fifth lowest economic growth rate in the region as economic growth rate in the Maldives (15 percent) and India (7.5 percent) remain the highest in the region. Bangladesh is projected to grow at 6.8 percent and Nepal at 4.1 percent in 2022, according to the ADB.
Government moves to ‘cool down’ an ‘over heating’ economy
Finance Minister Shaukat Tarin announced on Wednesday to take restrictive measures to “cool down” an “over heating” economy, marking the beginning of reversal of expansionary fiscal policies after external sector vulnerabilities exposed sooner than expected.
“It has been decided to introduce a 100 percent cash margin requirement for imports and impose regulatory duties to curb imports of non-essential items,” Tarin told a press conference – his second in less than 10 days to respond to increasing criticism over higher inflation.
“If [the new] measures are not taken, the economy could grow at more than 5 percent rate and this is the time to control the growth rate, the finance minister told the reporters, while explaining the reasons behind taking these measures.
SBP Governor projects sustainable growth
Contrary to previous years, Pakistan’s economic growth will be sustainable this time around due to a persistent uptrend in remittances, robust inflows through Roshan Digital Accounts (RDAs) and expected rise in exports owing to the refinance facility, said State Bank of Pakistan (SBP) Governor Reza Baqir.
Speaking at a session titled “The Future of Pakistan’s Economy” at the Leaders in Islamabad Business Summit on Wednesday, Baqir said that the textile sector was aiming to enhance exports by $5 billion after the modern machinery imported with the help of Temporary Economic Refinance Facility (TERF) was installed.
Samsung to organize TV manufacturing plant
Samsung Electronics, in collaboration with R&R Industries, is in the process of establishing a television manufacturing plant in Karachi, which will start working in the fourth quarter of current year and is expected to produce 50,000 units per annum, said Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood.
“This is a vindication of the Ministry of Commerce ‘Make-in-Pakistan’ policy for industrialisation through rationalisation of input costs and other incentives,” he said.
Talking to source, SI Global Solutions Chief Executive Officer Noman Ahmed Said termed the milestone a remarkable sign for Pakistan’s economy.
“Even after the recent unfortunate refusal of New Zealand and England cricket teams to play in Pakistan, our resilience continues to provide unique solutions for our needs to be met locally,” he said.
Moreover, it would attract international expertise and inevitably cause a domino effect by attracting more global companies to begin manufacturing locally, he added.
Japan to invest $100 million in Pakistan’s auto sector
Japan has planned to invest $100 million in the automobile sector for starting production of hybrid vehicles in Pakistan.
During a meeting between Adviser to Prime Minister on Commerce Abdul Razak Dawood and Japan Ambassador Kuninori Matsuda, both sides discussed the future plan to enhance bilateral cooperation between the two countries.
The Japanese ambassador announced that Toyota Corporation of Japan would invest about $100 million in producing and exporting hybrid vehicles from Pakistan, according to a press release issued by the Ministry of Commerce.
He also invited the commerce adviser to visit Japan which Dawood accepted. In the meeting, matters relating to bilateral cooperation and organising economic forums were also discussed.
The possibilities of assistance by Japan for up-gradation of the focus areas of infrastructure and facilities for various sectors like fisheries, salt and food processing also came under discussion.
Government to consult stakeholders on organic food policy
Minister for National Food Security and Research Syed Fakhar Imam has said that the national organic agriculture policy will be framed in consultation with all stakeholders for ensuring safe and healthy food for the local population besides tapping the export potential of organic food.
Addressing a workshop on
“Building Policy Ecosystem for Organic Production Landscape in Pakistan” on Tuesday, Imam said that the immense potential in the organic agriculture ecosystem could play an important role in fighting poverty and climate change.
“There is a dire need to promote organic agriculture for safe and healthy food for local and international population,” he said, adding that it would help in efficient water management practices for future generations and reduction in greenhouse gas emissions as well as transforming the conventional agricultural production system.
Tractor industry moving towards shutdown
The Tractor industry is moving towards total shutdown as a majority of units are now running a single shift due to persistent delay in release of sales tax refunds.
In a letter written to Prime Minister Imran Khan and Finance Minister Shaukat Tarin on Monday, Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) Chairman Abdul Rehman Aizaz reiterated the industry’s demand to release Rs6 billion worth of sales tax refunds.
He lamented that the amount had been stuck with the government for the past more than 20 months.
He pointed out that the closure of tractor industry would spell disaster for the agricultural mechanisation efforts, particularly when the country was facing a severe deficit of food commodities. He voiced fear that it could also lead to a steep rise in the import bill.