Pakistan Economy - News & Updates - Archive

[Neo]

No cut in defence expenditures: Hina Khar ​

Saturday, November 15, 2008

ISLAMABAD: Minister of State for Finance and Economic Affairs Hina Rabbani Khar said on Friday that there was no plan to cut defence expenditures.

“The government in its budget 2008-09 has announced to control the government expenditures but we will not reduce the defence expenditures,” she told the media after attending a one-day National Workshop for sharing of Draft Poverty Reduction Strategy Paper (PRSP-II) here on Friday.

Hina Rabbani Khar said consultative process for loans from the International Monetary Fund (IMF) is continuing and almost final. She said the government has taken all stakeholders into confidence on the IMF issue, adding, the has government started a debate in parliament on the matter.

Three-day debate was held on the IMF in the Senate, she said, adding, the discussions for loans from the IMF was almost final and the government would present it in the next meeting of the cabinet for approval.

 

[Neo]

Cement export surges 73% in July-October​

KARACHI: The cement export witnessed a growth of 73 percent in 4MFY09 to reach 3.5 million tonnes as total dispatches register an increase of 4 percent year-on-year (YoY) basis, with total sales amounting to 9.8 million tonnes.

On the exports front, depreciation of rupee has rendered Pakistani cement as a highly attractive option. The north has primarily contributed to the impressive increase in exports, where exports have taken a leap of a commendable 80 percent YoY.

This is primarily due to the higher demand pouring in from India, which now constitutes 6.5 percent of exports FY09. Afghanistan accounts for 28 percent of the exports (36 percent in FY08). “This is because the incremental exports have primarily been directed towards the cement thirsty UAE, the elaborate construction projects of which have yet to take a hit from the looming economic slowdown,” an analyst said.

Though sales have increased, capacity utilisation has taken a hit by falling to 76.4 percent, which is down by 21 percentage points. This is primarily because of the expansion ensuing an increase of 1.5 million tonnes YoY (4 percent) in rated capacity, which was unmatched by a 0.35 million tonnes YoY (3.7 percent) increase in demand. Lucky cement has also made its mark in terms of capacity utilisation as its plant in south zone boasts of a level of 117 percent.

Local sales: Local sales fell by 15 percent YoY to 6.3 million tonnes. This opposing change has been conducive to a reshuffling in the sales composition, as exports now contribute 36 percent to the total sales, a jump of 15 percentage points YoY.

Decline in local volumetric sales was primarily due to the price hike of 69 percent YoY in retail prices, skyrocketing to an average of Rs 369 per bag over 4MFY09. “Recurring monetary tightening measures have also strangled demand, which is made worse by soaring inflation,” analyst added.

Several commercial projects have come to a halt following the unfavorable economic and political conditions, and the hike in input prices. Local sales in the north zone, constituting more than 80 percent of the total local demand, have decline by 19 percent YoY. The sliding demand in northern areas is also due to the onslaught of winter in the region and the worsening law and order situation curbing construction activity.

In volume terms, Luck prevails as the leader, with a market share of 17.5 percent, followed by DGKC (13.1 percent). All in all, the 5 cement conglomerates now cumulatively take up 59.3 percent of the total market share (+3 percentage points YoY). Lucky also leads on the export front, with a market share of 25.3 percent, while second place is taken up by Maple leaf (13.9 percent), followed by DGKC (10.3 percent).

Analyst said that contractionary fiscal policy calling for an imminent cut in PSDP of Rs100 billion is expected to bring about a slowdown in construction activity further. Volumes are also expected to decline as winter strikes more vehemently. However, fall in coal prices (46 percent FY09) is expected to give a breather to gross margins.

Citing reasons for decline in local sale, a market dealer said that usually sales remain low between November to February owing to a slowdown in construction activities all over the country.

 

[Neo]

Pakistan to tap Japanese garment market​

TOKYO: Pakistan Embassy, in an effort to tap the Japanese garment market, was planning to hold a fashion show to introduce popular dresses tailored by the country’s prominent designers.

Preparations in this connection were underway to invite famous Pakistani dress designers and outlets for participation in the dress show.

The fashion show is scheduled for March next year at the premises of Pakistani mission.

Pakistani dress designers and their products are very popular in USA, UK, UAE and many international markets, and the objective to hold fashion show in Tokyo is to make inroads in the Japanese market, said Economic Minister at Pakistani Mission Iftikhar Babar.

“The objective is to find out value-added market of this sector in Japan,” he added.

Meanwhile, to invite Japan based Pakistani business community for investment in Pakistan, the economic minister said that Pakistan Embassy organised a seminar on trade and investment opportunities available in his country.

Babar said that he briefed the prominent Pakistani businessmen and traders about new investment and trade opportunities that existed in Pakistan.

He invited them to make investment either individually or through joint-ventures with Japanese entrepreneurs in Pakistan.

There was lot of potential available for investment in energy, housing, mining, tourism, telecommunications and IT sectors, banking and financial services, he said.

Babar assured full assistance to traders doing business in used-cars for the establishment of Special Economic Zone (SEZ) for used cars re-export from Pakistan on the pattern of Dubai re-export zone.

The present economic crisis, he said is short lived and Pakistan soon would overcome fiscal and trade deficits and the country would successfully emerge as a vibrant economy since the economic fundamentals are very strong.

He said that because of time constraint, many Japanese buyers opt to purchase cotton from neighbouring Hong Kong, Thailand, Philippines or other nearby countries as the shipment from Pakistan takes around 25 days to arrive here.

Babar, in this connection, invited Pakistani businessmen to establish large-scale warehouses and cold storages in Japan for imported goods particularly raw cotton, yarn and towels and perishable goods from Pakistan, which are in great demand but suffer due to interrupted supplies and long travelling times involved during passage.

He was of the view that the construction or hiring of warehouses in Japan would help in timely delivery of various commodities to the Japanese buyers.

The economic minister also briefed the Pakistani businessmen about the potential for non-traditional items like fish, fruits and vegetables, mineral salt, leather products, gems, precious stones and jewellery and stressed the need to tap the Japanese market in these areas to help bridge the yawing trade gap, which is mounting day by day in Japan’s favour. app

 

[Neo]

Hillary Clinton to work for early approval of $15bn aid​

LAHORE/NEW YORK: US Senator Hillary Clinton has assured President Asif Ali Zardari that she will work with Congress for the early approval of a $15 billion Biden-Lugar aid package for Pakistan, a private TV channel reported on Friday.

According to the channel, Zardari telephoned Clinton and told her the Pakistan government was working hard to bring economic stability to the country. Clinton appreciated Zardari’s efforts for establishing democracy in Pakistan and praised Islamabad’s role in the war on terror.

APP reported that the president said Pakistan was striving for peace in the region and its nascent democracy needed support and co-operation of the international community to confront several challenges it was facing.

Clinton said the US was keen to see the economic and social uplift of the people of Pakistan and the new US administration and Congress would work together to attain that objective. The US media reported Clinton was the top contender for the slot of US secretary of state. daily times monitor/app

 

[Neo]

Economic crisis to be over in six months: Gilani​

RISALPUR: The present economic impasse would be over within six months as the friends of Pakistan will lend all possible support in overcoming the financial crisis,

Prime Minister Syed Yousuf Raza Gilani said on Friday. Talking to reporters after addressing the graduation ceremony at the Pakistan Air Force (PAF) Academy Risalpur, Gilani said Pakistan was not the only country that had been hit hard by economic recession. Both the under-developed and developed countries with strong economic bases have started approaching the IMF to get some relief for their economies, he added.

He said Pakistan would seek the financial assistance of the world monetary body on its own terms and conditions.

He expressed the confidence that Pakistan will get oil facilities too. Gilani said China would financially assist Pakistan in the due course of time.

To another question, he categorically said that army action is no solution to any problem as his government believes in negotiations. He added that the Pakistani army would remain in the restive areas until peace was completely restored.

 

[opinion786]

Thanks NEO, for updating this page and providing such wonderful & vital information daily! Really this page would be nothing without you!

 

[pkpatriotic]

Pakistan agrees on $7.6 bln IMF loan
By Sahar Ahmed

KARACHI (Reuters) - Pakistan has agreed with the International Monetary Fund (IMF) on a $7.6 billion emergency loan to stave off a balance of payments crisis and pave the way for a broader economic rescue plan.

The IMF said on Saturday its executive board was expected to meet shortly on the 23-month standby credit, after IMF staff and Pakistan agreed on a reform program.

"This support is part of a broader package that includes financing from other multilateral institutions and regional development banks," IMF Managing Director Dominique Strauss-Kahn said in a statement.

The international community is concerned that an economic meltdown in the nuclear-armed state could play into the hands of al Qaeda and allied Islamist militant groups seeking to destabilize the Muslim nation of 170 million.

The eight-month-old civilian government is banking on good will toward Pakistan during its transition to democracy after more than eight years under former army chief Pervez Musharraf, who quit as president in August to avoid impeachment.

World leaders were meeting in Washington at the weekend to discuss the worst global economic turmoil since the 1930s and consider reforms to world financial institutions such as the IMF.

Shaukat Tarin, the recently appointed adviser to the prime minister, said the formalities should be concluded next week.

"We are expecting it this month," he told a news conference in Karachi when asked when the first tranche might arrive.

"We have requested IMF to give as much as they can."

The interest rate on the credit facility would vary between 3.51 and 4.51 percent with changes according to market conditions, and would be payable between fiscal 2011/12 and 2015/16, Tarin said.

The IMF did not disclose details. But it said the credit under its emergency funding facility would be tied to Pakistani economic reforms, including higher official interest rates and tighter fiscal policies, plus a well-funded social safety net to protect the poor.

Pakistan expects the World Bank and other lenders to step forward with several billion dollars of additional loans, and steadfast ally China to pitch in with $500 million. But other multilateral lenders and friendly governments were waiting for the IMF accord before acting, in order to bring some discipline to Pakistan's economic management, analysts said.

Other potential donors are gathering in Abu Dhabi on Monday for a "Friends of Pakistan" conference.

State Bank of Pakistan Governor Shamshad Akhtar said the IMF money would be used to build up the central bank's foreign currency reserves, which Tarin said should be equivalent to more than three months import cover.

The central bank's reserves stood at $3.5 billion on November 8, equivalent to just nine weeks worth of imports, and Pakistan faced defaulting on international debt obligations in February next year unless it received a multi-billion dollar infusion.

The rupee has lost 23 percent in value against the dollar since the start of the year, and foreign investors have fled a stock market which is down around 35 percent.

Stocks would have fallen further but for an artificial floor authorities placed under the Karachi market's benchmark index at the end of August, and almost certainly will fall further once the floor is removed.

FRIENDS IN THE WINGS

Tarin said the IMF had endorsed Pakistan's own strategy to bring about structural adjustments needed to correct unsustainable current account and fiscal deficits.

The strategy included reducing excessive government borrowing from the central bank to zero, and boosting the tax base, but did not involve a cut in defense spending, one of the heaviest items on the budget, Tarin said.

The only point of difference with the IMF, according to Tarin, was the fund's desire to see higher interest rates. But a 200 basis point hike in State Bank's policy discount rate to 15 percent announced on Wednesday partially met those concerns.

With headline inflation running above 25 percent and core inflation at 18.3 percent, real interest rates are still in negative territory.

Tarin's statement came a day after Standard & Poor's cut its ratings on the nation's sovereign debt deeper into junk bond territory, eight rungs below investment grade.

S&P highlighted Pakistan's tardiness in raising funds it badly needs to avoid defaulting on its debt liabilities.

Pakistan had been in talks with the IMF for months, but officials had been coy about admitting they were seeking an IMF package, because of the harsh conditions the fund often imposes.

(Additional reporting by Stella Dawson in Washington and Augustine Anthony; Writing by Simon Cameron-Moore; Editing by Andrea Ricci)

 

[Neo]

Real estate boom ​

People liquidating bank savings to invest in property; FPCCI body on housing and construction SVP Munir Sultan says rates to remain stable and hike after March; realtors say investors fearing financial meltdown in UAE coming back home

Sunday, November 16, 2008

KARACHI: Local builders in Pakistan are having a field day as the newly introduced projects all over Pakistan have received tremendous positive response marking the first signs of real estate sector revival in the country.

Real estate agents and builders said that though prices continue to remain low owing to recession - the demand for properties is increasing as investors are coming back home after trying their luck in UAE.

Senior Vice President of FPCCI Sub committee on Housing and Construction, Munir Sultan predicted that the prices of properties would remain stable for the time being and would only hike after March.

Estate agents and experts informed that the buyers of these properties are investors having money stashed in local and foreign banks and following the global credit crunch feared for their savings.

Sultan explained: “These are ordinary well to-do people of our society who liquidated their bank savings and opted for safe heaven investment in real estate. Properties are sound investments as no one can steal them from you and more importantly because regardless of the political or economical conditions, land assets do eventually gain value with time.”

He further said that Pakistan urgently needs to work on its investors’ confidence and the government should take steps to clear the country of its black economy that is working parallel to the legal system.

He advised the government to introduce a law similar to UAE’s Escrow account concept, which provides investor’s peace of mind over their investments and helps reduce fraud cases.

However, Sultan went on to inform that DHA Lahore, Islamabad and Karachi would not witness any changes both in terms of revival and price fluctuations as “the demands in these areas were artificially created particularly by stock exchange investors”.

“These investors purchased plots in great numbers and artificially pushed up the prices and therefore they are not accounted for in the overall country’s real estate movements. DHA properties investment rules are also quite different from the rest of the country,” he continued.

In Karachi, residential projects with ground floor commercial shops in scheme 33, near Super Highway are the most well received ones according to most estate agents in the localities of PECHS, Gulistan e Jauhar and Gulshan e Iqbal.

Abu Masood Khan of Khan Estate Agency and Ashok of Ashok Builders informed of similar results in Hyderabad. They said that there has been a hike in residential projects and shopping complexes in their city.

“The idea of commercial projects has especially gained momentum and there are increasing number of shopping plazas that have been introduced” Ashok said. Latifabad, Heerabad, Saddar and the area around Isra University have witnessed the maximum projects, Khan shared.

Similarly, Basit Mahmood, a project director of Globiz in Lahore informed that his city is also experiencing a revived interest in empty plots and constructed projects and real estate related advertisements have popped up across the city’s billboard, cable televisions and newspapers.

Meanwhile, an expert dealing with Gwadar expressed that the place continues to remain in doldrums and so far no changes have been witnessed there.

“Let us hope the investment fever that is spreading in the other parts of the country also reaches here to save us from disaster too” he added.

 

[Neo]

Govt expects to net Rs40bn through farm income tax ​

Sunday, November 16, 2008

ISLAMABAD: The government is expecting to fetch Rs40 billion through income tax on agriculture land holdings to comply with the IMF demand.

“The federal government can collect additional revenue ranging between Rs10 to Rs40 billion by imposing controversial tax on the farming community,” reveals an official work out on the proposed measure.

Imposing agriculture income tax is the bone of contention between the central governments and its federating units and the provinces would let the federal government take this tax away from the last several years.

According to estimates of the Federal Board of Revenue (FBR), they are expecting a total revenue collection of Rs60 billion by taxing agriculture whereas total agriculture tax collection during the last fiscal was below Rs1 billion with Sindh contributing Rs200 million and Punjab Rs700 million.

Besides collecting irrigation tax (Aabiana) by the provincial governments, they are also collecting variable tax on fields and orchards.

The farming community is opposing the move as they are already contributing billions of rupees under the implicit tax by the policy makers, a leading farmer told this correspondent.

According to a number of studies by Pakistan Institute of Development Economic (PIDE), the farmers are already paying over Rs100 billion as implicit tax.

Implicit tax is a kind of indirect tax, which the federal government levied on the farm produces, to provide cheap commodities to its urban segments.

The effective imposition of farm tax in the income mode will be fixing the average amount of agriculture rent (Theka) per acre and apply it to the land holdings, said the working.

Likewise of salaried class, the landholders having not more than 12.5 acres would not fall under the agriculture income tax while the landholders possessing more than 12.5 acres would be taxed, it added.

Out of the total cultivated area of 22 million hectares, the working said that nearly 44 per cent (10 million hectares) fall under the category of 12.5 acre, thus leaving 12 million hectare to be taxed for contribution to the national kitty.

Fixing an average Rs8,000 per acre as agriculture rent (Theka), the working further estimates that the total collection at the rate of 5 per cent would be Rs10 billion, it would be Rs20 billion at the rate of 10 per cent, Rs30 billion at 15 per cent and Rs40 billion at 20 per cent.

Pakistan’s total GDP of $160 billion, agriculture sector contributes slightly above 20 per cent ($32 billion).

 

[Neo]

‘Local economy resilient, has survived major shocks in past’ ​

Sunday, November 16, 2008

KARACHI: Restoration of confidence in public is must for economic revival and that is a big challenge for the government at current. Otherwise issues in domestic economy like current account deficit and balance of payments are of very basic nature, which can be resolved with strong economical will.

The experts and stakeholders developed this consensus at a one-day investment forum on ‘Investing in Change: Pakistan and the World’, which was organized by BMA Fund here on Saturday at a local hotel.

Speakers said that the local economy was of resilient nature. It had faced more or less the same challenges in the past as well and had survived major shocks. They were of firm believe that this time too the nation would come out of depression and would successfully set economy back on rails.

Replying to a query from audience, Director Institute of Business Administration, Dr. Ishrat Hussain said the timeframe of recovery in economy was totally dependent on government’s will and sincerity. As quick as it (government) would take decisions it will succeed in overcoming issues.

He, therefore, said that forex reserves in hand would restore the confidence of Pakistan’s economy and if it (country) was not getting it (dollars) from its friends like China, Saudi Arabia, United States and etc then it should go better and quickly to International Financial Institutions (IFIs) without wasting anymore time, he strongly recommended.

Having said that people have short memory, Dr. Hussain reminded that Pakistan had a growth rate of 1.8 per cent in 2000 and it entered into IMF program. The program proved fruitful and helped country getting back on rails.

Pakistan established access to international markets following its entrance into IMF program. As a result of that, it launched European Bond in world markets in 2004 for the first time. Then it launched Islamic Sukuk and then sold 10-years and 30-years bonds in US market at 200bps above the US Treasury rates just two years ago, he recalled.

Moreover, country achieved a GDP growth rate of seven per cent on an average for the first five years. The poverty reduced to 25 per cent from 33 per cent. The unemployment rate slashed to 6.2 per cent from 8.5 over the same period, he added.

Dr. Hussain, former Governor State Bank of Pakistan (SBP), said: “20 per cent core inflation at present is not the result of economic policies, but this is a result of not taking timely decisions, and postponement of decisions on economy owing to shot-term political gains by governments.”

He further said that current account deficit was not going to kill the country.

The difference between the saving of a country and investment in domestic economy and can be managed by non-debt creating tools, he suggested.

He was of the opinion that government business was to facilitate private sector and remain out of conventional business. But in this module of business, the regulatory bodies should be given autonomous power to deal with guilty in the country.

While, private sector in Pakistan will have to change its mindset to compete at world level, as it was yet showing an attitude of approaching, privileging and getting associated with the government in powers for short term gain.

It (private sector in Pakistan) can compete at world level by adopting three-pronged strategy that included enhancing productivity, efficiency, and investing in labour.

Other speakers said that the issues of circular debt can be resolved by sitting stakeholders across the table including WAPDA, KESC, IPPs, PSO, NRL, PRL and Ministry of Finance will have to play its active role in this exercise.

Waqar A. Malik, President, OICCI, urged upon extensively working on institutional building and evolving a policy framework to adopt ahead. He said Pakistan was having a number of challenges, but the biggest opportunity it was having was its 180 million populous.

He said giving subsidies was not a bad practice. The developed countries like US and China also do it. But subsidy should not be given on across the board and be provided to some selective sectors.

He maintained that Pakistan was an agriculture based country and it much provide relief to farmers and also wide it tax net by brining in some new economic sectors and rich people.

S. Ali Raza, Chairman and President, NBP, said that financial managers should think out of box as boom in economy has become history. He said floor at local bourse be removed after getting sure that country was having enough reserves to facilitate foreign investors’ smooth exit.

Tariq Iqbal Khan, Chairman-NIT, said that cut in the disbursement of profits to the shareholders gave birth to bearish sentiment at local bourses. While, higher profitability to them would ensure their return and restore their confidence.

Farrukh H. Khan, CEO, BMA Caital; Muddassar Malik, CEO, BMA Fund; Tawfiq A. Hussain, President & CEO, Samba Bank and many others also spoke on the occasion.

 

[Neo]

Gilani urges China, India to utilise Karachi port​

KARACHI, Nov 15: Prime Minister Yousuf Raza Gilani has said that Pakistani ports could cater for the needs of India’s northern and northwestern states and also China’s Xinjiang province because of proximity.

After inaugurating the third expansion phase of Karachi International Container Terminal (KICT) here on Saturday, the prime minister said that during pre-partition era, Karachi port used to handle a large part of cargo meant for present-day India’s western province, hoping that the same could be done now.

He said as Pakistani ports were nearer to India than other regional hubs, it would be “advantageous for Indian traders to use our ports”.

China’s Xinjiang province could also use Karachi and Qasim ports for trade because they are closer than ports on China’s eastern seaboard.

However, he stressed the need to make Pakistani ports competitive and efficient so that Indian and Chinese traders opted for them.

Mr Gilani said the late Zufikar Ali Bhutto had envisioned an infrastructure that could bring all communities closer and that benefited trade and industry.

The prime minister said it is heartening that a port which made a modest start in 1947 has now embarked on development on modern lines.

At the time of independence the port’s capacity was a meagre 1.2 million tons of dry cargo and one million tons of POL products per annum. On the other hand, the port is now handling over 12 million tons of liquid cargo and 25 million tons of dry cargo, including 1.213 million TEUs.

He said by making Karachi port state of the art, “we could make it a hub of the region”.

Praising ongoing development projects and future expansion plans, including a deep sea container terminal, the prime minister said other large public sector organisations should “emulate the KPT”.

Earlier KPT chairperson, Ms Nasreen Haque, gave details about major projects being undertaken by the port to meet future challenges. She said that the Deep Sea Terminal Port, having a draft of 18 metres, would be constructed at Keamari, which can handle “post-Panamax vessels”.

She said a project for developing a cargo village on the port’s western backwaters and another for deepening all existing berths to 16 metres would be undertaken soon.

Sindh Chief Minister Qaim Ali Shah and acting Governor Shehla Raza were also present on the occasion.

 

[DarkStar]

Maybe Pakistani govt. should actually first start using the port itself. There has hardly been a ship docking there, as vested interests have manouvered to make sure that Karachi remains the only viable trading port. The govt. should start using the port itself, and offer concessions and enducmements to pvt. firsm to do the same.

 

[Neo]

Current account deficit at $5.9 billion​

KARACHI: External current account deficit during the first four months of the current fiscal year stood at $5.9 billion, up by $2.5 billion or 98.56 percent from $2.993 billion during the same period last year.

The current account deficit rose to such a high level despite proceeds from workers' remittances and exports of $2.3 billion and $7.1 billion respectively, chiefly because the import bill rose to $12.9 billion.

Underlying this sharp growth in imports by 35.2 percent was the rising oil bill that reached $4.9 billion, which was close to $1.23 billion per month as the international oil prices for this period averaged $123 per barrel, well above the FY08 average of $87.4 per barrel. Consequently, the share of oil bill in the total import bill has increased to 38 percent as compared with 30 percent in FY08.

Non-food-non-oil imports also grew by 6.8 percent during Jul-Oct, FY09, adding to the pressures. With financial inflows slowing down by $1.1 billion only in Jul-Oct, FY09, the external current account deficit had to be financed by draw down of SBP's foreign exchange reserves - this involved depletion of reserves by $5 billion since the beginning of this fiscal year up to November 10, 2008.

The recent decline in international oil and other commodity prices bodes well for the external sector, but a sustained decline in overall import demand is critical to avoid further reserve loss after its expected build up and after the government receives loans from the IMF.

 

[Neo]

Pakistan to get $7.6bn from IMF​

* Tareen says formal request will be made next week
* First tranche likely this month
* IMF says loan is 500 percent of Pakistan’s quota​

WASHINGTON/KARACHI: Pakistan and the International Monetary Fund (IMF) have reached an initial agreement on key elements of an economic programme supported by a $7.6 billion loan to meet the country’s serious balance of payments difficulties, Finance Adviser Shaukat Tareen and IMF Managing Director Dominique Strauss-Kahn announced separately on Saturday.

The 23-month Stand-By Arrangement is subject to the approval by the IMF Executive Board, which is expected to meet to discuss the programme shortly, under the Fund’s emergency financing mechanism.

The IMF said the proposed loan amounted to some 500 percent of the country’s quota in the Fund. In a press statement, the IMF said Pakistan’s programme had two main objectives: to restore the confidence of domestic and external investors by addressing macroeconomic imbalances through a tightening of fiscal and monetary policies; and to protect the poor and preserve social stability through a well-targeted and adequately funded social safety net.

The IMF managing director said both objectives are an integral part of IMF support for Pakistan. “This support is part of a broader package that includes financing from other multilateral institutions and regional development banks. I would like to call on the donor community to work together and act quickly to support Pakistan’s programme in order to mitigate the impact of the current economic difficulties on the poor and ensure an adequate level of spending on development programs,” Strauss-Kahn added.

Tareen: In Karachi, Shaukat Tareen said the government would formally apply for the loan with a letter of intent next week and the first tranche is expected this month.

The interest rate is 3.51 to 4.51 percent, he said. Repayments will begin in 2011 and end in 2016. khalid hasan, mushfiq ahmad and sajid chaudhry

 

[Neo]

Highlights of bailout package​

* 23-month stand-by arrangement is subject to approval by IMF Executive Board

* Interest rate set at 3.51 to 4.51 percent

* Repayments will begin in 2011 and end in 2016

* High interest rates to control core inflation

* No borrowing from central bank between October ’08 and June ’09

* GDP growth target will be revised