Pakistan to repay foreign debt value $22 bn in 12 months
Amid efforts to dodge the imminent risk of default, Pakistan says it is due to repay foreign debt and interest worth almost $22 billion over the next 12 months. The dollar-strapped government, upon successful resumption of the International Monetary Fund (IMF) programme, is expected to initiate talks with creditors to restructure its foreign debt. The country’s debt obligations currently stand significantly higher than the inflows it expects to receive in the coming years. Data from the State Bank of Pakistan (SBP) suggests that Pakistan is to repay a total debt of $21.95 billion in one year; $19.34 billion in principal and another $2.60 billion in interest on the total debt.
Pakistan may not receive projected $5 bn loans
The International Monetary Fund (IMF) suspects that Pakistan may not receive the projected $5 billion loans from multilateral and commercial creditors as Islamabad still awaits the Memorandum for Economic and Financial Policies (MEFP) draft with only two days left to conclude talks. The talks have reached a crucial phase where it can tilt in any direction amid the government’s hope that it is well-positioned to clinch a deal by Thursday –the last scheduled day for the talks. “We cannot say that there is a deadlock, as both sides are still engaged with an open mind,” a senior government functionary said at the end of the eighth day of talks. He said that the IMF sought more information about the anticipated provincial cash surpluses before reaching a final primary fiscal deficit number. The government had budgeted Rs750 billion provincial cash surplus for this fiscal year. During the first half (July-December), the four federating units showed only Rs177 billion in surplus. The surplus was Rs304 billion or 63 percent less than the comparative period of the last fiscal year.
National assembly directs FBR to return Dam’s funds
The National Assembly Standing Committee on Water Resources on Tuesday directed the Federal Board of Revenue (FBR) to pay back the remaining amount deducted from the account of Naulong Dam. The NA committee, headed by Mir Ghulam Ali Talpur, was informed that the FBR had deducted Rs1,916 million from the account of Naulong Dam in 2018-19. The money was actually released under the Public Sector Development Programme (PSDP) for construction of the dam. Owing to the deduction, the dam could not be constructed, prompting different forums to direct the FBR to pay back the amount. FBR chairman, in a previous meeting of the standing committee, revealed that the amount was being returned to Wapda and necessary documentation had also been completed. The Ministry of Water Resources told the committee that Rs1,270 million had been paid back to Wapda but still over Rs600 million was remaining. The committee gave directives that the remaining funds may also be paid to Wapda forthwith.
Pakistan railways generated Rs. 28.263 billion revenue
Minister of State for Law and Justice Shahadat Awan told the Senate on Tuesday that the Pakistan Railways generated Rs28.263 billion revenue, through its operation in the first half of the current fiscal year against the expenditures of Rs52.99. Responding to a question from Jamaat-e-Islami’s Mushtaq Ahmed, the minister said that 35 percent of the expenditures were related to pension and 33 percent to salaries. He added that the railways received a subsidy of Rs21.75 billion as a grant-in-aid from the federal government. “The net deficit for the period from July 1 to December 31, 2022, was Rs2.977 billion,” the minister told the house. However, Balochistan Awami Party’s Senator Danesh Kumar pointed out that the railways distorted the figures and that its total losses were to the tune of Rs24.727 billion.
Businessmen refuse GST increase
The Pakistani business community, on Wednesday, warned the government from increasing the General Sales Tax (GST) from 17 percent to 18 percent. Speaking to the source, Pakistan Business Forum (PBF), Vice President Ahmad Jawad said, “We must understand that Pakistan is facing the most difficult set of obstacles it has ever encountered. If the government moves to increase GST from 17 percent to 18 percent, we will resist as it is an incredibly destructive and harsh move.” Instead, the business leader said, “An economic emergency should be declared in the country. The value of the rupee has depreciated by Rs89 under the current government and businessmen and industry owners are on the streets.” Urging the government to put an end to the free float policy for the dollar, he said, “Investors are not ready to come to Pakistan. The government must implement austerity in its institutions and add the economy to the agenda of the All-Parties Conference scheduled to be held in few days.”
Chemical sector pays for imports in Pakistani rupees
Pakistan’s chemical industry imported its first ever raw material consignment from Saudi Arabia in Pakistani rupees, paving the way for further imports in the local currency and relieving pressure from the country’s dwindling forex reserves. Speaking at the inaugural session of the two-day “Pakistan Chemical Expo 2023”, Pakistan Chemicals Manufacturers Association (PCMA) Chairman Jai Kumar said, “To exploit the chemical sector, PCMA is not only advocating for long-term petrochemical complex projects but is also introducing bio-economy projects to take full advantage of the resources available in the country.” Governor Punjab Muhammad Balighur Rehman appreciated the industry’s efforts to highlight the investment and trade potential in the chemical industry by holding the Expo and said, “Considering the growth opportunities present in the chemical sector, and the current economic situation of the country, it has become imperative to take immediate steps to facilitate the ease of doing business in this industry.”