Pakistan Economy - News & Updates - Archive

[sohailbutt]

Setting up dyeing, processing units: Sialkot garment industry demands five-year tax holiday​

KARACHI (May 20 2008): The Sialkot-based manufacturers-cum-exporters have demanded tax holiday for five years to establish dyeing, weaving and processing units to increase value-added exports to $500 million from $250 million annually. They said on Monday that the government should include their proposals in the coming budget and the trade policy regarding development of garments industry in Sialkot.

The value-added garment industry is the fourth largest exporting sector with $250 million shares out of $900 million total exports made from the city annually, they claimed.

"Garments sector annual exports amount to one-third of exports made from Sialkot. We demand of the government to provide the investors with five years' tax relief to set up dyeing, weaving and processing units in the city to scale down additional expenses of transportation and labour," said Ijaz Khokhar, a former chairman of Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea).

He demanded of the government to set up vocational institutions for men and women in the city to overcome the dearth of manpower, which is presently at threatening low level. Sialkot is the only city in Asia that alone competes with China in the world market with its martial arts kits, he added. "Some 20 percent martial arts kits of total world demand is produced at Sialkot. Pakistan has direct competition with China, while the manufacturing city is faced with shortage of labour and basic infrastructure," he said.

Japan, he said, has almost diverted to China for meeting its martial art kits demand. Pakistan can earn more for national exchequer by offering incentives like tax concessions to its local investors, he added.

He said that local investors demand a similar tax holiday as the government has provided to investors for establishing industrial units in Gwadar. He added that the ministry of textile can play a vital role and it should evolve policies for the development of industries.

The increasing dependency of Sialkot textile garment industry on other cities for dyeing, weaving and processing their products not only increases cost of production but also brings about delays in exports, he said.

He pointed out that several exporters had lost their deals with foreign buyers for not meeting their export deadlines. About research and development (R&D) assistance, he said that it has played an important role in boosting exports of garments, and demanded of the government to continue it.

"Particularly, R&D assistance helps the exporters bear huge travelling expenses," he said, adding that under the R&D facility, manufacturers have inducted new machinery and carried out successful marketing in the world markets.

Business Recorder [Pakistan's First Financial Daily]

 

[sohailbutt]

Over Rs 157 billion disbursed to agriculture sector in 10 months ​

KARACHI (May 20 2008): Disbursement of credit to agriculture sector by commercial and specialised banks has shown an impressive growth of 34.88 percent, to Rs 157 billion during ten months (July-April) of the current 2007-08 fiscal year (2007-08).

The State Bank of Pakistan (SBP) said on Monday that overall the banks have disbursed total Rs 157.566 billion to the agriculture sector during July-April period against Rs 116.816 billion in the same period of last year, showing an increase of Rs 40.75 billion.

Disbursement by five major commercial banks--Allied Bank (ABL), Habib Bank (HBL), MCB Bank, National Bank (NBP) and United Bank (UBL)--totalled Rs 74.327 billion during the period under review, compared with Rs 54.597 billion during the corresponding period of last year, depicting an increase of Rs 19.73 billion, or 36.14 percent.

Zarai Taraqiati Bank (ZTBL) disbursed Rs 45.773 billion against Rs 38.843 billion of last year, and Punjab Provincial Co-operative Bank (PPCBL) disbursed Rs 3.983 billion against Rs 5.464 billion of last year. Besides, 14 domestic private banks lent Rs 33.482 billion, up 87 percent as compared with Rs 17.912 billion of last year.

The State Bank of Pakistan has set a target of Rs 200 billion for the current fiscal year, up from Rs 160 billion of last fiscal year, showing an increase of Rs 40 billion. During last fiscal year, commercial and specialised banks had disbursed Rs 168.83 billion to the agriculture sector.

Business Recorder [Pakistan's First Financial Daily]

 

[sohailbutt]

Gilani seeks foreign investment in Pakistan's energy sector ​

SHARM EL-SHEIKH (May 20 2008): Prime Minister Syed Yousuf Raza Gilani seeking investment in energy sector on Monday assured the investors that the new democratic government will fully facilitate the foreign investors.

"I can assure you that the government will provide all facilities to investors, as we have to come in a big way to tackle the energy crisis," he said while addressing a special session "Eye on Pakistan" of the World Economic Forum on the Middle East.

The Prime Minister said it was the PPP's government, led by Shaheed Benazir Bhutto, which brought in the Independent Power Producers (IPPs) in the country and added 4000 to 5000 MW of electricity in the national grid.

He said the country's future prospects can be gauged from its political, economic, security and social fundamentals. On political front Pakistan has successfully endured the struggle for democracy and is on the path of political stability.

On economic front, the Prime Minister said despite critical challenges most of the economic fundamentals have remained on track. Soon the political stability will have visible impact on further improving economic fundamentals, he added. On security, he said Pakistan believes in pursuing peaceful co-existence policy. Domestically Pakistan has some challenges which the government is addressing through dialogue including eradication of the menace of terrorism.

The Prime Minister said despite political and security challenges, economic fundamentals have been strong. "There is a sound economic foundation for the development of country and other financial indicators support this fact."

"Our foreign exchange reserves have increased, stock exchange has shown ten fold increase and 1.5 million Pakistanis have been brought out of the poverty line and public debt has halved. Pakistan's position in terms of rich-poor disparity has improved", he added.

The Prime Minister said Pakistan is a very attractive market for foreign investors. Around 700 foreign companies are operating in Pakistan while foreign direct investment during last year stood at 8.4 billion dollars. He said our manufacturing sector has shown sterling growth, agriculture sector has bounced back and telecommunication and IT sectors have taken a big leap.

State Bank Governor Dr Shamshad Akhtar in her presentation said the quality of economic management in Pakistan has improved. She said along with rest of Asia, the country withstood lot of domestic and external challenges.

She said Pakistan has withstood the domestic democratic transition, disruptions that it faced in one year and there will be a 6 percent GDP growth this year. She said the government is preparing a medium term economic programme which is going to lay out five years of economic frame-work. It will be an attempt to consolidate the fiscal deficit and to manage the external account deficit. She said financial sector in Pakistan has been the best performer, adding, "today the non-performing loans are below three percent."

GILANI MEETS MUBARAK Prime Minister Syed Yousuf Raza Gilani discussed ways and means to further strengthen bilateral relations and co-operation in various fields with Egyptian President Hosni Mubarak.

The two leaders who met on the sidelines of the World Economic Forum on the Middle East discussed issues of mutual interest as well as the prospects of enhanced co-operation in various fields including defence, trade and investment, science and technology, agriculture and tourism. They also discussed the Palestine issue and expressed support for an independent Palestinian state.

President Hosni Mubarak appreciated Pakistan's support for Palestine and said he wants to see a strong Pakistan, that is the source of strength for the entire Muslim world. Prime Minister Gilani said Pakistan was keen to expand its relations with Egypt in all areas.

He said the existing level of economic relationship between the two countries was not commensurate with the level of political co-operation and there was a need to focus on promoting interaction in infrastructure, IT, science and technology, health, tourism, real estate development and food processing sectors.

He said that the vast potential of Pakistan in the tourism sector remains untapped and the government was making co-ordinated and concerted efforts to promote this industry.

Business Recorder [Pakistan's First Financial Daily]

 

[sohailbutt]

Pakistan, Jordan agree to sign FTA​

SHARM EL SHEIKH: Pakistan and Jordan agreed on Monday to sign Free Trade Agreement (FTA) and also to set up a business council to create more space for cooperation between the two countries in trade and commercial fields.

This was decided at a meeting between Prime Minister, Syed Yousuf Raza Gilani and his Jordanian counterpart Nader el Dahabi in Sharm El Sheikh on the sidelines of the World Economic Forum.

“The Jordanian prime minister showed interest to benefit from Pakistan’s civil nuclear industry and said his country would seek help in this area for energy sector,” officials said.

The two leaders also decided to look into the possibility of resuming air flights between Pakistan and Jordan besides cooperating in tourism sector.

PM Gilani said Pakistan was in a position to provide Jordan the requisite expertise and technical know-how to help develop Jordan’s textile sector and welcome Jordan’s interest in Pakistan’s defence manufacturing and research facilities.

He said there was need to tap the available opportunities for promoting trade and investment between the two countries.

He said there was a vast scope to enhance bilateral cooperation in diplomatic, economic, defence, security and science and technology and to activate the existing mechanisms to achieve the desired level of interaction between the investors and traders.

He invited the Jordanian prime minister to visit Pakistan. The Jordanian prime minister said his country was keen to expand cooperation and the doors were open for this purpose.

PM Gilani expressed the hope the ninth session of the Joint Economic Commission due to be held soon would help boost commercial ties between the two countries.

He said, necessary mechanisms in the shape of MoUs and agreements, which already existed, on trade, tourism, maritime trade, avoiding double taxation need to be implemented and energised.

Daily Times - Leading News Resource of Pakistan

 

[sohailbutt]

KSE 100-Index down 18 points to close at 13,903 ​

KARACHI: Karachi Stock Exchange benchmark index closed down 18 points on Tuesday at 13,903.

The day's trade started on gains as investors covered short positions from the previous sentiment. However, negative sentiments created by concerns over the state of the economy once again played on stakeholders' nerves.

100-index lost 18 points to close at 13,903 points.

The broader market was almost square too. Of 339 active scrips, 115 ended on gains, while 201 declined and 23 remained unchanged.

Volumes improved slightly to 167 million shares, from 125 million shares traded yesterday.

KSE 100-Index down 18 points to close at 13,903 - GEO.tv

 

[niaz]

I hate to be harbinger of bad news but economic outlook for Pakistan looks bad. Energy is the lubricant which keeps the economy moving ahead. As of this morning crude oil has crossed $130 per bbl in the Far East markets and fuel oil is up $20 per metric ton. Pakistan imports approx 250 thousand tons of fuel oil per month (called furnace oil), another 250 thousand tons per month gas oil ( diesel) and approx 150 thousand barrels per day of crude oil.

on a very rough estimate, unless crude oil prices drop substantially (highly unlikely); oil import bill alone will exceed $10-billion!!. This is two thirds of our total export earnings. This implies a recession in Pakistan, may be globally as well.

 

[Neo]

Cost of construction rises by 25pc in a year ​

Tuesday, May 20, 2008

KARACHI: The housing and construction industry is facing a mismatch between the annual need of 670,000 housing units and the construction of only 300,000 units per year. Sources and real estate agents claim that a major cause of mounting pressure on housing in urban areas is the rural-urban migration.

The demand for construction raw materials is increasing while international steel and cement prices continue to soar, which a common man is finding difficult to afford. A source explained that the cost of constructing a house now is at least 25 percent more than what it was a year ago. “Billets are one of the most significant raw materials for steel products which had cost less than $200 per tonne a year ago and now have hiked to $1,100 per tonne.”

Similarly cement companies are demanding to sell 50kg bag for Rs300, which is unaffordable for the common man, the source added. According to the FPCCI standing committee on housing and construction, World Bank statistics had reported a backlog of 7.0 million housing units against the backlog of 4.27 million in 1998.

Pakistan may face further housing backlog of 10 million units in the next 20 years beside the backlog of 7.0 million, if the construction industry is neglected continuously, the research further predicted.

Some projections in the report state that Karachi’s population will grow to 20.6 million and Lahore to 10.8 million in the next few years. It has been estimated that more than half of all housing units in Pakistan consist only of one room, shared by an average family at 6.5 people.

On the other hand, a related phenomenon is the mushrooming of slums (kutchi abadis) whose number rose from 471 in 1984 to 1,482 in June 2005. In all major cities, other problems include an increase in the crime rate and the large-scale power and water theft in slums through illegal connections.

Former senior chairman of FPCCI standing committee on housing and construction, Muneer Sultan informed that the government had taken some initiatives in the concerned sector which unfortunately failed with no results.

He informed that the National Housing Policy 2001 was announced but never implemented. He added that the potential to generate employment in this sector has not been taken seriously in the past, nor ever decided to revitalize it as a vehicle for economic revival.

Sultan further added that the last government had been sincere to develop the industry but bureaucracy prevented the growth of construction sector that would have directly benefited 72 allied industries.

“All over the world, the housing and construction sector contributes greatly to national GDP but in Pakistan, the government fails to recognize the sector’s importance which would eventually have dire consequences in the future,” he concluded.

http://www.thenews.com.pk/arc_news.asp?id=3

 

[Neo]

EAC to identify priority areas for reviving economy ​

Tuesday, May 20, 2008

ISLAMABAD: The Economic Advisory Council in its maiden session on Monday decided to identify seven to eight priority sectors on which they would give advice to the incumbent regime for reviving the derailed national economy.

“We will be able to identify seven to eight priority areas in next three to four days for meeting the enormous challenges being faced by the national economy,” Shaukat Tareen, Convener of the Economic Advisory Council (EAC) told The News on Monday night.

Earlier, Federal Minister for Finance, Naveed Qamar said that the government would focus on poverty alleviation in the next budget and give due attention to agriculture sector for achieving higher growth.

“The economic challenges are enormous and we will do our best to address economic woes in the budget,” Finance Minister said talking to reporters after the Economic Advisory Council (EAC) meeting held here on Monday.

Shaukat Tareen, who is also convener of the EAC said that the committee was deliberating upon options to provide relief to the masses stricken by POL, electricity and commodities prices.

Economic Advisory Council convened its first meeting with Finance Minister Syed Naveed Qamar in chair at the Finance Division, Islamabad. The Minister stated that the Council has to deliberate upon the solutions to the macro economic problems faced by the country. There is a need to focus on food security, energy crisis and other budgetary issues affecting the common man.

He expressed the hope that the committee will be able to advise short term and medium term measures to improve and invigorate the economy as well as ensure that the common man can be provided relief against current economic pressures.

The terms of reference of Economic Advisory Council are to provide independent advice to the Prime Minister and the government on the formulation and implementation of economic policies and reforms agenda.

Economic Advisory Council (EAC) comprising 11 members includes the Finance Minister, Deputy Chairman Planning Commission, Special Assistant to Prime Minister on Economic Affairs and Finance Secretary from the government sector. The private sector members who today deliberated on the economic issues were Bashir Ali Muhammad, Tariq Saigol, Saqib Sherani, Farooq Rahmatullah, Salim Raza and Shaukat Tarin.

Tarin is the Convener of the committee and leads the deliberations as per TORs assigned to the EAC. He assured that the EAC would try to identify measures to address the current economic situation and would also deliberate upon medium and long term initiatives for improving the economic structure of the country. The Deputy Chairman Planning Commission expressed the view that the EAC should address the immediate problems of the common man.

Finance Secretary gave a presentation on the overall economic situation and forthcoming budget being prepared by the Finance Division. The meetings of the EAC would continue during the current week.

http://www.thenews.com.pk/arc_news.asp?id=3

 

[Neo]

Shaheen’s UK flight succumbs to high cost ​

Tuesday, May 20, 2008

KARACHI: Private airline Shaheen Air has decided to suspend its flights to England from next month after becoming the latest casualty of soaring fuel costs, industry officials told The News on Monday.

The three weekly flights to Bradford from Islamabad have been discontinued from June 1 only after three months since the service was first launched amid much fanfare. “With oil prices at record highs, the very survival of airlines is at stake,” said Haider Jalal, Chief Operating Officer (COO) of Gerrys, one of the largest travel agencies of the country. “It is time to take some drastic cost-cutting steps.”

At least one Pakistani airline has already resorted to measures adopted by other international airlines to control costs and remain competitive in a tight market. Airblue has reconfigured its fleet of six aircraft to all-economy class models in order to accommodate more passengers and avoid sending flights with empty business-class seats.

By the conversion Airblue, which has given a run to PIA and Shaheen for market share when it was launched in 2004, will enhance seat capacity by 23 per cent. Airblue is also mulling over a proposal to stop serving meals on its aircraft as part of cost-cutting measures to ease some burden of escalating fuel prices, its Managing Director Syed Nasir Ali had told The News in an interview last month.

“The idea of removing meals from flights is difficult to implement because Pakistani people will not welcome the move,” he had said. “But with oil prices going up continuously, this will have to be done.”

While Shaheen has been cautious about giving an official version on the suspension of flights to England, industry officials say the revenue from the flight was not enough to meet the high cost impact of a leased A310 aircraft and fuel.

“Shaheen was using a wet-leased A310 aircraft, which must be costing at least $4,500 per hour,” industry officials said. “Now add to that the soaring fuel cost and you can figure out the reason for suspending the flights.”

One of the officials said it was naive on the part of Shaheen’s management to launch a long-route operation on fuel-guzzling aircraft that too on wet-lease, a type of lease only allowed for a maximum period of four months.

Jalal of Gerrys said Airblue is on the right track in bringing down the auxiliary costs associated with the airline business. “Luxuries and frills have to be stopped,” he said, adding: “Stopping meals on flights would create uproar in the start but this unpopular decision is inevitable.” He suggested serving some type of low-cost snacks instead of meals.

Meanwhile, national flag carrier Pakistan International Airlines (PIA) is also working on a plan to contain its expenditure and enhance revenue. However, Aijaz Haroon, the new Managing Director, refused to go into details saying they will be released shortly. But he did confirm one thing: “There is no plan to stop serving meals.”

http://www.thenews.com.pk/arc_news.asp?id=3

 

[Neo]

EC asked to consider permanent market access for Pakistan ​

Tuesday, May 20, 2008

ISLAMABAD: Pakistan has asked a visiting delegation of the European Commission (EC) to examine permanent market access for Islamabad under the GSP-plus scheme for a win-win situation for both sides.

In the third meeting of the EC with Pakistan’s sub-trade group, Islamabad urged the Commission to consider its request for neutralising the adverse impact of the market access provided to the countries of South Asia such as Bangladesh and Sri Lanka, revealed agreed minutes of the meeting, held in Islamabad recently, available with The News.

Pakistan also informed the delegation that it has signed 27 conventions relating to human rights, good governance and sustainable development while three are under the process of ratification and implementation. Pakistan said its exports to the EU region were less than one per cent, which qualified it for the GSP-plus scheme.

Taking note of Pakistan’s concerns, the EC team asked it to file an application for the GSP-plus scheme for examination before the date of entry for the new GSP regulation in Jan 2009.

Pakistan also expressed concern that the proposed softening of EC’s preferential Rules of Origin for textile and garments may encourage shifting of the value-added industry to Least Developed Countries (LDCs), due to their duty-free access to the EU market.

Regarding anti-dumping duty on bed-linen import, Pakistan requested for suspension or withdrawal of the duty and assurance that it would not be re-imposed. The EC notified that they would follow all WTO obligations.

To comply with EC standards, the commission made it clear that the re-listing of Pakistani seafood exporters will be initiated if corrective measures as per the EC guidelines are taken, and that the commission’s inspection is a must for Pakistan’s re-entry into the EU market.

Briefing on rice and its registration as geographical indication (GI) under TMO, 2001, Pakistani officials requested the visiting delegates for correcting the list of Basmati varieties mentioned in the EU regulation as the commercial property of Pakistan only.

About export tax on raw hides and skins and wet blue, Pakistani officials told the EC that the duty has been imposed to ensure adequate supply of raw material to the value-added domestic industry. The domestic industry is demanding a complete ban on the export of raw skins and hides as it is not helpful in discouraging exports.

The EC team informed their Pakistani counterparts that they are studying to assess the impact of trade policies on Pakistan’s preferential access to the EU market and it is expected to be completed in the autumn of 2008.

The EC also requested Pakistan to co-sponsor the joint EC-US-Sri Lanka Non-Tariff Barrier (NTB) proposal on textile labeling, address the issue of export taxes and emphasised the importance of protecting GIs.

Shahid Bashir, Senior Joint Secretary of Ministry of Commerce headed the Pakistani side, whereas Jan De Kok, head of EC delegates, Islamabad, represented the EU side at the two-day negotiations.

http://www.thenews.com.pk/arc_news.asp?id=3

 

[Neo]

Pakistan-Jordan to sign FTA, set up JBC ​

Tuesday, May 20, 2008

SHARM-EL-SHEIKH: Pakistan and Jordan on Monday decided to rapidly move towards signing a Free Trade Agreement (FTA) and setting up of Joint Business Council (JBC) to promote trade and investment between the two countries.

Talking to Prime Minister of Jordan Nader-al-Dahbi here on the sidelines of the World Economic Forum for Middle East, Syed Yousuf Raza Gilani said there was vast scope of bilateral cooperation in areas of diplomacy, economy, defence and security, tourism, energy and science and technology.

The two leaders held discussions on issues of mutual interest in bilateral, regional and international spheres. The two leaders who have earlier served as ministers of tourism in their respective countries discussed prospects of increased cooperation in this field.

Prime Minister Gilani said Pakistan and Jordan enjoy close brotherly ties and there was a need to tap the excellent available opportunities for promoting trade and investment between the two countries.

He said the two sides need to activate the existing mechanism to achieve the desired level of interaction between investors and traders belonging to the two countries. Prime Minister Gilani expressed the hope that the ninth session of the Joint Economic Cooperation, due to be held soon will help strengthen commercial ties between the two countries. He said the memorandum of understanding on the strategic dialogue signed between Pakistan and Jordan will be pursued vigorously to institutionalise the existing relations.

http://www.thenews.com.pk/arc_news.asp?id=3

 

[Neo]

Call to tap engineering sector’s potential ​

Tuesday, May 20, 2008

LAHORE: Member National Assembly and Pakistan Muslim League (N) leader, Ahsan Iqbal has said that the engineering sector has huge potential, which needs to be tapped. However, only those businesses would be able to advance that would be knowledge-based.

Ahsan Iqbal was speaking at a ceremony held in connection with the first anniversary of Etimaad Engineering Plc here the other day. He stated that the world has now become a global village and the level of competition is galloping fast with every passing moment. Therefore, the success of every nation lies in how they transfer their individual excellence into a collective one.

He stated that “we have to work for enhancing exports especially in the field of engineering as it has a lot of potential, and work for the promotion of a quality culture in the country.” Speaking on the occasion President & CEO of Etimaad Engineering, Mazharudin Ansari said “we are already playing our humble role in overcoming the power shortage through our involvement as construction contractor of 160MW Attock Gen Limited in Rawalpindi and 220MW Orient Power plant at Balloki.”

He said that their company offers total commitment to play its part in overcoming the current power shortage in the country. Thereby, acting as an engineering, construction and a project management company owned and managed by experienced professionals should.

He noted that his company is working on collaborations with reputable international companies to utilise expertise and verify design parameters. His company also offers in-house engineering, procurement and construction (EPC) capabilities to offer fast track solutions to meet Pakistan’s power in a cost effective way and to put up fast track power projects.

http://www.thenews.com.pk/arc_news.asp?id=3

 

[Neo]

Credit flow to farm sector rises by 35pc​

KARACHI, May 19: Credit flows to agriculture witnessed a tremendous rise of 35 per cent during in the first 10 months (July-April) of the current fiscal year, but the sector is yet to improve its performance.

The State Bank of Pakistan said on Monday that credit disbursement to the sector went up by Rs40.75 billion to Rs157 billion in the July-April period.

The credit flows increased during the last five years, mainly because of the involvement of commercial banks, but the country is still facing shortage of wheat, pulses and other green products.

Total credit disbursement to the sector in the financial year 2003 was just Rs27.5 billion which multiplied each year as commercial banks have now greater share of credit disbursement than specialised banks, like Zarai Taraqiati Bank.

Overall credit disbursement by major commercial banks, including Allied Bank Limited, Habib Bank Limited, MCB Bank, National Bank of Pakistan and United Bank Limited, stood at Rs74.327 billion during the first 10 months of the current fiscal year compared with Rs54.597 billion during the corresponding period last year, depicting an increase of Rs19.73 billion or 36.14 per cent in absolute terms.

The Zarai Taraqiati Bank, the largest specialised bank, disbursed Rs45.773 billion during the July-April period compared with Rs38.843 billion last year, while disbursement by the Punjab Provincial Co-operative Bank Limited stood at Rs3.983 billion, compared with Rs5.464 billion last year.

Fourteen domestic private banks also loaned a combined Rs33.482 billion during the July-April period, up 87 per cent when compared with Rs17.912 billion disbursed last year.It is surprising that despite high credit growth, the nation is still facing a shortage of agriculture products and the country is compelled to import even wheat and pulses.

However, the central bank in its last annual report had indicted that loan disbursement was limited to a few large borrowers while small farmers were deprived of credit. This was the reason that yields of important crops did not increase significantly.

“It should be noted that in contrast to the increasing agriculture credit disbursement, the number of borrowers witnessed a decline for the second consecutive year in FY07,” said the SBP annual report for financial year 2007.

“This meant that the average size of agriculture loan increased and suggests that small farmers did not avail the financing facilities at the same pace as in previous years,” said the SBP.

A senior banker said that higher credit to agriculture sector also reflects rising cost of inputs, like fertiliser, pesticides and other ingredients.

The central bank has set an indicative target of Rs200 billion for the current fiscal year, up from Rs160 billion in the last fiscal year.

Credit flow to farm sector rises by 35pc -DAWN - Business; May 20, 2008

 

[Neo]

ADB interested in manufacturing sector​

ISLAMABAD: A six-member delegation of Asian Development Bank (ADB) on Monday showed special interest in development of manufacturing sector in Pakistan.

The delegation met with senior officers of the Engineering Development Board (EDB) today. They were briefed about the salient features of industrial, tariff, taxation and fiscal policies of Pakistan. The ADB’s delegation informed the meeting about details of their various programmes and inquired requirements of the country so that the specific needs could be met.

The delegation was also informed about new role of the EDB as facilitator to the engineering industry rather than regulator. It was emphasised that the Board had introduced the concept of consultation with stakeholders in policy making. In this regard, the example of Auto Industry Development Programme (AIDP) was given which could be followed in other sectors. Details of the trucking policy formed by the Board were also provided to the delegation in response to their query about National Trade Corridor Programme.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Pakistan likely to miss revised GDP growth target of 6pc​

* Initial estimates suggest GDP growth at 5.5pc
* Growth in agriculture at 1.7pc against target of 4.8pc
* Large-scale manufacturing in industrial sector at 4.8pc against 12.5pc​

ISLAMABAD: Pakistan is likely to miss the downwards-revised growth target of gross domestic product (GDP), with estimates suggesting that the GDP growth will remain less than 6 percent in the current fiscal year 2007-08, official sources told Daily Times on Monday.

The National Accounts Committee, which met to finalise the growth estimates for the current fiscal year, was informed about the performance of various economic sectors, said an official privy to the meeting.

After a detailed review of the performance of the each economic sector during the period from July to March, the committee estimated the GDP growth at 5.5 percent.

However, the meeting decided that the latest performance figures of services sector provided by the State Bank of Pakistan would be also be included in the review.

Keeping in view the central bank’s request, GDP estimates for the current fiscal year would be finalised on Tuesday (today), which are expected to be around 5.7-5.9 percent, the official added. Actual GDP growth target for the current fiscal year was 7.2 percent, which was lowered to 6 percent because of the poor performance of agricultural and industrial sectors.

Agricultural growth: The agricultural sector has registered an overall growth of 1.7 percent against the target set at 4.8 percent. Major crops registered a negative growth of 1.7 percent, while minor crops made a negative growth of 2.4 percent in the outgoing fiscal year.

Industrial growth: Industrial production also showed less than the projected growth. Large-scale manufacturing (LSM) grew at a meagre rate of 4.8 percent against the annual growth target of 12.5 percent. Foreign direct investment also witnessed a negative trend of over 30 percent during the current fiscal year, the official said.

Commodity producing sectors were also not able to maintain their growth momentum and recorded a 3.7 percent growth rate against the annual target of 7.4 percent.

However, the services sector again projected a growth of 7.4 percent against the target of 7.1 percent — mainly because of the good performance of the banking, insurance and telecommunication services sectors, the official added.

The official said that growth in services sector suited to mature economies, but not the emerging economies like Pakistan. Although the growth in services sector during the last few years helped the government to show handsome growth, it also resulted in increasing demands and high inflation because of negative trend in commodity sectors, he added.

The official said that an emerging economy like Pakistan could only sustain itself through continuous growth in the agricultural and manufacturing sectors, which ensure food security and help the country enhance its exports for foreign exchange earnings.

He believed that the government would not be able to project a higher GDP growth target for the next fiscal year 2008-09 because of low GDP growth this year.

Daily Times - Leading News Resource of Pakistan