PM Shehbaz in a quandary on how to sweeten bitter IMF pill
Prime Minister Shehbaz Sharif on Wednesday withheld his final approval of a set of measures that Pakistan had to take to unlock the much-needed International Monetary Fund (IMF) programme, directing authorities concerned to slightly sweeten the bitter pills of an increase in energy prices and taxes.
The prime minister chaired a virtual meeting from Lahore. He also directed for finding ways to ensure that there was less political fallout and also the people might be less burdened, one of the participants of the high-profile meeting told.
Ishaq considers enlisting sapm to former PM Khan
Finance Minister Ishaq Dar is actively considering further expanding his core economic team by bringing in another old guard. The decision-making process, however, remains painstakingly slow despite an already top-heavy administration.
Former Secretary of Finance and former Special Assistant to former Prime Minister (SAPM) Imran Khan, Dr Waqar Masood Khan, could be a new member of Dar’s core team, which already comprises of six people. The finance minister is said to have told his aides that Dr Masood could join the team anytime.
It is not clear what responsibilities Dar will assign to the likely new team member, irrespective of the nomenclature of his portfolio.
Earlier, Dr Masood had served as SAPM on Revenue – a position currently filled by two members – presumably looking after policy and operational matters separately.
USA wants to see Pakistan ‘economically sustainable
The United States wants to see Pakistan in an ‘economically sustainable’ position, US State Department spokesperson Ned Price said during a press briefing on Wednesday.
The spokesperson was asked if the US was paying any attention to Pakistan after it had less than $5 billion left in its foreign exchange reserves or if it was planning to give debt relief to the country. Price maintained that this was a challenge the US was “attuned” to.
“I know that Pakistan has been working with the IMF [International Monetary Fund], with international financial institutions. We want to see Pakistan in an economically sustainable position. Those conversations, as I understand it, are ongoing,” he said.
RS10 tariff relief likely for K-E consumers
The consumers of K-Electric are set to get a tariff relief of over Rs10 per unit on account of fuel cost adjustment for December 2022.
K-Electric has filed a petition requesting the National Electric Power Regulatory Authority (Nepra) to approve a reduction of Rs10.26 per unit in consumer bills under fuel cost adjustment for December.
Earlier, Nepra allowed K-Electric to slash power tariff by Rs7.43 per unit for November 2022, which was reflected in the consumer bills of January 2023.
Islamic Banking to enlarge 35pc
State Bank of Pakistan (SBP) Deputy Governor Seema Kamil, on Tuesday, said that Islamic banking aims to expand up to 35 percent within the next two years.
Addressing a seminar on Islamic banking and economic development, Kamil said, “Pakistan is working on its own Islamic banking model. At present 20 percent of commercial banks have adopted Islamic banking and one private bank has completely been converted into an Islamic bank.”
Stressing on the need for Shariah scholars to create awareness about Islamic banking, she said, “SBP will provide facilities to whichever bank wants to Islamise its branches.” The central bank has established two sectors in its Islamic banking structure – Islamic finance and Islamic development. “People’s interest in Islamic banking is increasing and this facility is being extended to improve their quality of life,” said the SBP official. While the task of converting from conventional banking to Islamic banking is a challenging one, she said the State Bank is offering its full cooperation and will come up with a revised plan.
PBS: LSMI growth down by 5.5pc in november
Growth in Pakistan’s large industries slumped by 5.5 percent in November, as businesses face extreme difficulties in procuring imported raw material coupled with the high cost of doing business, leading to temporary closure of many factories.
The severe curtailment of production is likely to cause high unemployment and create a shortage of essential commodities in the coming months, triggering a spike in inflation.
The Pakistan Bureau of Statistics (PBS) reported on Tuesday that growth in Large Scale Manufacturing Industries (LSMIs) decreased by 5.5 percent in November compared to a year ago. The national data collecting agency reported that the big industries also showed a 3.6 percent contraction during the July-November period, compared to the same period last year.
Since LSMIs contribute heavily to revenue collection and job creation, any change in their growth impacts the government and business sentiment accordingly. The Federal Board of Revenue (FBR) is also facing the daunting task of collecting revenues and has started slowing down the release of refunds – undermining business activities.
WB delays loans worth $1.1bn
In a major blow, the World Bank (WB) has delayed the approval of two loans, worth $1.1 billion, until the next fiscal year. The lender has also opposed slapping a flood levy on imports, creating a new hole in an already ambitious $32 billion annual financing plan.
The Washington-based lender’s decisions to withhold approval of the second Resilient Institutions for Sustainable Economy (RISE-II) loan worth $450 million and the second Programme for Affordable Energy (PACE-II) worth $600 million will be a major jolt for the government.
“The indicative date for (World Bank) Board discussion of the RISE-II project is fiscal year 2024, which will start on July 1, 2023 and end on June 30, 2024,” a spokesperson from the World Bank confirmed.
The WB’s documents also showed that the PACE-II loan might also be approved in the next fiscal year.