SBP leaves interest rate 9.75 pc
Pakistan central bank on Tuesday left the key policy rate unchanged at 9.75% for the next six weeks, suggesting that the rate stands at an appropriate level to further reduce inflationary pressure and avoid an extended slowdown in economic growth in the ongoing fiscal year. It, however, said it may convene the next monetary policy committee (MPC) meeting earlier than the scheduled date of April 19 to revise the rate, if needed, as the global petroleum price soared to a 14-year high of around $140 per barrel. According to the State Bank, the spike in oil price may hurt Pakistan’s economy if it remained on the higher side in the medium to long run. The global oil price has jumped in the wake of Russia-Ukraine war. The development has the potential to expand the country’s import bill manifold and keep the current account deficit at high levels.
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Lack of support from government vexes AJK traders
The business community has been struck the hardest during the Covid-19 lockdowns and no concrete steps have been taken by the government of Azad Jammu and Kashmir (AJK) to support it, said Mirpur (AJK) Chamber of Commerce and Industry President Faisal Manzoor. Addressing a policy advocacy workshop on Tuesday, he called upon the AJK government to provide special incentives to the members of the business community who were trying to recover from the losses.
“The policy advocacy skill is an essential component of business leadership as it empowers people to create consensus-based solutions for complex issues,” said Manzoor.
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Budget deficit & IMF’s target
Pakistan’s revised estimates show that its primary budget deficit will breach the recently agreed limits with the International Monetary Fund (IMF) and inflation will remain high but there is positivity in economic growth rate trajectory.
The government has shared its initial assessment of the economy with the IMF during ongoing talks, sources said. However on Tuesday, it postponed a scheduled meeting between the finance minister and Nathan Porter, new Mission Chief of the IMF, due to pressing engagement of Shaukat Tarin. The government’s economic and legal team had another meeting at the same time in which the ministers were already committed to the IMF mission for kicking in a crucial round of talks. The Tarin-Porter meeting was important to set the tone for the main round of talks.
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Government to keep 0.2 mn tonnes of urea inventory
The government has decided to maintain 2 lakh tonnes of urea inventory in March and the cost of inventory loss of manufacturing companies will be built in the government’s next controlled prices for urea. In a fertiliser review meeting, chaired by Federal Minister for Industries and Production Makhdoom Khusro Bakhtiar on Tuesday, the participants were told that the carrying cost of each urea bag was Rs2-3. The meeting discussed the production and demand for fertilisers in the upcoming 2022 Kharif sowing season. It decided to import urea to hedge against global supply disruptions and higher prices amid the Ukraine crisis, for which the Ministry of Industries would place a summary in the next Economic Coordination Committee (ECC) meeting.
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Packaging sector seeks industry status; FPCCI
The packaging sector is the backbone of all industries and the government should grant industry status to it in order to reap maximum benefits, said Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Management Committee Regional Chairman Punjab Muhammad Nadeem Qureshi. Talking to representatives of the All Pakistan Corrugated Cartons Manufacturers Association at the FPCCI regional office on Tuesday, Qureshi stressed that the corrugated cartons manufacturing sector held significant importance in all industries. Elaborating, he said that the widespread popularity of online businesses and e-commerce had increased the importance and value of corrugated cartons sector.
“Corrugated cartons are the first choice for many product and service businesses due to their efficiency, durability and dependability,” he remarked.
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ECC accepts Rs 303 bn extra budget
The government on Monday approved Rs303 billion in supplementary budget to pay for the cost of temporary reduction in electricity and petroleum prices, its expensive loan venture and Ramazan relief package. The Economic Coordination Committee (ECC) of the cabinet approved the reduction in electricity prices by Rs5 per unit for four months for the consumers using 101 to 700 units per month. However, it excluded those domestic consumers who consumed less than 100 units or pay peak and off-peak rates, which were already double than the cost of generation. The ECC approved the PM’s relief package of Rs5 per unit by way of reduction in the base rate of electricity for a period of four months (March-June 2022). The relief package will be applicable to all commercial and domestic non-ToU (Time of Use) consumers having monthly consumption of up to 700 units, excluding the lifeline consumers, according to a statement issued by the Ministry of Finance.
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Asad forecasts $ 8.5 bn export growth
Pakistan’s exports during the current fiscal year 2021-22 are estimated to grow $8.5 billion against the previous year, which will be higher than the total growth in exports in 10 years of the previous governments, announced Planning Minister Asad Umar. “With the year’s (FY22) first-half trade data available, we are on course for a bigger increase in exports of goods and services in one year than in the 10 years of PPP and PML-N governments from 2008 to 2018,” he said on his Twitter handle on Thursday. In fiscal year 2007-08, the country’s exports were recorded at $24 billion, which rose only $6.6 billion in 10 years to $30.6 billion in FY18. However, the exports, which were recorded at $31.5 billion by the end of FY21, rose $4 billion, or 27%, in the first six months of current fiscal year.