Pakistan Economy - News & Updates - Archive

[Pk_Thunder]

Inflation eases Considerably​

RECORDER REPORT
ISLAMABAD (February 01 2009): The SPI inflation has eased considerably during the last three months as it declined from 29.41 percent on November 27 to 22.56 percent on January 27, according to Federal Bureau of Statistics. Federal Bureau of Statistics figures show a continuous decline in the weekly inflation during the last 10 weeks in the SPI, based on prices of 53 essential items from 17 urban areas which is released at the end of every week.

The figures showed that SPI inflation was 29.41 percent on November 27 and came down to 27.75 percent on subsequent week ending on December 4, 2008. On December 11 it declined to 26.88 per cent and 24.76 per cent on December 18. The weekly inflation was decelerated to 23.61 per cent on December 24 and came down to 21.08 per cent on January 1.

On the week ending January 6, the SPI inflation was recorded 19.25 per cent. However in the next two weeks it slightly increased and surged to 22.93 per cent on week ended January 22 over the same period of last year. Again it eased to 22.56 per cent on week ended on January 29 from 22.93 per cent of previous week following decline in the prices of vegetable, LPG, rice, cooking oil etc during the week.

The SPI bulletin revealed increasing trend in the prices of 17 commodities, declining in 14 whereas the prices of 22 commodities remained stable during the week. The price of chicken, eggs, gur, salt powdered, tomatoes, bread plain mid size, sugar, bananas, onion, tea prepared, electric bulb 60 watts, beef, cooked beef plate, moong pulse washed, gram pulse washed, milk fresh and mash pulse increased during the week while the price of potatoes, wheat flour average quality, vegetable ghee loose, garlic, LPG cylinder 11 kg, masoor pulse washed, wheat average quality, vegetable ghee tin, red chillies, kerosene, rice irr-6, rice basmati broken, mustard oil and cooking oil tine declined.

The price of mutton, milk powdered NIDO, curd, tea packet, cooked dal plate, cigarette K-2, coarse latha, lawn, voil printed, shirting, sandal gents Bata, sandal ladies Bata, firewood, match box, washing soap nylon, bath soap lifebuoy, gas charges up to 3.3719 MMBTU, electric charges 1-100 units, petrol diesel and telephone local call remained unchanged during the week.

 

[TopCat]

Inflation eases Considerably​

RECORDER REPORT
ISLAMABAD (February 01 2009): The SPI inflation has eased considerably during the last three months as it declined from 29.41 percent on November 27 to 22.56 percent on January 27, according to Federal Bureau of Statistics. Federal Bureau of Statistics figures show a continuous decline in the weekly inflation during the last 10 weeks in the SPI, based on prices of 53 essential items from 17 urban areas which is released at the end of every week.

The figures showed that SPI inflation was 29.41 percent on November 27 and came down to 27.75 percent on subsequent week ending on December 4, 2008. On December 11 it declined to 26.88 per cent and 24.76 per cent on December 18. The weekly inflation was decelerated to 23.61 per cent on December 24 and came down to 21.08 per cent on January 1.

On the week ending January 6, the SPI inflation was recorded 19.25 per cent. However in the next two weeks it slightly increased and surged to 22.93 per cent on week ended January 22 over the same period of last year. Again it eased to 22.56 per cent on week ended on January 29 from 22.93 per cent of previous week following decline in the prices of vegetable, LPG, rice, cooking oil etc during the week.

The SPI bulletin revealed increasing trend in the prices of 17 commodities, declining in 14 whereas the prices of 22 commodities remained stable during the week. The price of chicken, eggs, gur, salt powdered, tomatoes, bread plain mid size, sugar, bananas, onion, tea prepared, electric bulb 60 watts, beef, cooked beef plate, moong pulse washed, gram pulse washed, milk fresh and mash pulse increased during the week while the price of potatoes, wheat flour average quality, vegetable ghee loose, garlic, LPG cylinder 11 kg, masoor pulse washed, wheat average quality, vegetable ghee tin, red chillies, kerosene, rice irr-6, rice basmati broken, mustard oil and cooking oil tine declined.

The price of mutton, milk powdered NIDO, curd, tea packet, cooked dal plate, cigarette K-2, coarse latha, lawn, voil printed, shirting, sandal gents Bata, sandal ladies Bata, firewood, match box, washing soap nylon, bath soap lifebuoy, gas charges up to 3.3719 MMBTU, electric charges 1-100 units, petrol diesel and telephone local call remained unchanged during the week.

22% inflation is still way too high for any normal living.. I am surprised PK people have not revolted against the govt yet...

 

[acer]

22% inflation is still way too high for any normal living.. I am surprised PK people have not revolted against the govt yet...

how is inflation in bangladesh sir.?

 

[notorious_eagle]

You are right my friend, inflation above 10% is simply too much. The reason why many poor people are surviving is simply because of generosity of others. These are just temporary measures, once the price of fuel goes up the inflation is going to go up too. The government needs to address this problem correctly, but as Asif Ali Zardari as their chair i have simply no hope.

 

[macintosh]

22% INFLATION with crude prices at 45$ a barrel is quite worrisome and if the foreign currency problem remains then i believe Pak GOV. is going to increase petrol prices which will further escalate the Inflation.Also i read somewhere that Pak gov. has imposed heavy import duty on potato from India.So in short term it will remain high.

 

[Pk_Thunder]

Revolutionary steps for revival of postal services​

ISLAMABAD (February 02 2009): Pakistan Postal Services has bounced back with offering modern facilities to customers, who otherwise had lost hope for the country's once popular service.

As part of these facilities, sources said motorbike-service had been introduced of ordinary mail in Rawalpindi, Islamabad, Lahore, Karachi, Peshawar, Abbottabad, Gujranwala, Jhelum, Multan, Sukkur, Faisalabad, Hyderabad, Kohat and Sukkur.

For this purpose, the sources added 1,032 motorbikes had been provided to the delivery staff at these stations. They said that counter automation system had been put in place, which provided state-of-the-art point of sale terminals equipped with computers, electronic weighing scales, barcode scanners and printers.

Specially designed software, with complex business logic embedded in it, ensures integrated service provision at each counter. Over 100 GPOs including renovated post offices throughout Pakistan have been provided with this facility, the sources added.

Express Mail Track and Trace System (EMTTS) had been introduced, the minister said, which enabled Pakistan Post to track the Express Mail items from end-to-end within the country, providing both customers and management with valuable information relating to the location of items.

In order to expand the network, all 46 District mail Offices (DMOs) have also being linked to the system, the sources informed. Other measures included Electronic Money Transfer system, which was fully computerised and transferred money from over 200 countries and territories to Pakistan within minutes.

Moreover, the sources that surveillance cameras had been installed to monitor the working of operational staff as well as to minimise the cases of abstraction of contents from the postal articles.

 

[Pk_Thunder]

Rs 14,224 million being spent on construction, upgradation of various airports​

ISLAMABAD (February 02 2009): The Civil Aviation Authority (CAA) has awarded contracts of Rs 14,224 million during 2008-09 for construction and upgradation of various airports in the country.

According to official sources, Rs 11,825 million will be spent on airside infrastructure of New Benazir Bhutto International Airport Islamabad, Rs 1,719 million on airside pavement and upgradation of Multan Airport and Rs 680 million on site protection work at New Gwadar International Airport.

In addition to commitment of funds on these projects, the expenditure incurred on major Civil Aviation Schemes during 2008-09 include Rs 1,600 million works schemes and Rs 562 million equipment procurement (for Air Traffic Control system of the airports).

According to the sources, the authority completed major projects besides procurement, technical equipment including flight information system at Karachi airport, runway visibility equipment for Lahore airport, air to ground communication system for various projects, ATC recorders for various airports, repair and upgradation of radar, partial, implementation at Karachi and Lahore airports and electro mechanical equipment for various airports.

They said that air field lighting at Sukkur and Peshawar, improvement of terminal buildings Quetta and D.G. Khan and reactivation/uplifting of Nawabshah, Hyderabad and Sukkar airports were the other projects completed by the Civil Aviation Authority.

 

[Pk_Thunder]

IDA to provide $300 million for poverty alleviation project​

RECORDER REPORT
FAISALABAD (February 02 2009): International Development Association (IDA) will provide $300 million for "Third Pakistan Poverty Alleviation Fund Project", which will be designed to reduce poverty and empower both the poor and poorest of the poor by providing savings support, financial and physical assets, information, skills and opportunities for development, and strengthen inclusive and accountable community organisations.

According to project update report of World Bank, the Third Pakistan Poverty Alleviation Fund Project will focus on increased inclusion of the poorest of the poor and women in community organisations and their heightened participation in all community and civic decision making processes.

World Bank report revealed that a significant addition for the proposed PPAF III project will be a stronger focus than previous operations on the most vulnerable and the poorest households.

This will be achieved by the adoption of a more participatory and integrated approach that combines strong targeting mechanisms that effectively identifies the extreme poor; and the building of inclusive institutions of the poor with enhanced investments in sustainable livelihood opportunities. These investments will range from skill enhancement, micro-credit, improved access and linkages to markets and local government, community managed grants for social & productive infrastructure.

WB report revealed that the proposed "Third Pakistan Poverty Alleviation Fund Project" concept is based on PPAF's experience and learning of eight years of multi-sector service delivery to the poor. During these eight years, PPAF has adhered to the basic principles of prudence, transparency, efficiency and effectiveness and maintaining its role as an apex institution. Innovation and flexibility will remain PPAF's underlying approach in the next phase.

 

[Pk_Thunder]

Pakistan's economy to turn around: Wajid​

LONDON (February 02 2009): Pakistan's High Commissioner to the United Kingdom, Wajid Shamsul Hasan is optimistic about a quick turnaround of Pakistan's economy by the year's end despite the global downward trend.

The wide-ranging interview with the APP among many other issues-covered Pakistan's economy, post-Mumbai developments, advent of new administration in the United States, greater realisation of Pakistan's overly constructive role in the war on terror and growing understanding of the core issue of Kashmir as a nuclear flash-point.

Intensive interaction with important British functionaries, leaders in trade and industry and enthusiastic entrepreneurs have reassured Hasan of immense keenness in the United Kingdom to help his country develop economically and to strengthen its democratic institutions.

Despite backlog of piled up economic problems inherited by the new democratic government and slow growth in the recent past Hasan feels confident that Pakistan's economy will grow more than 4 per cent by the end of 2009. The High Commissioner referred to the launching of the Friends of Pakistan Club on the initiative of President Asif Ali Zardari and the United Kingdom to provide economic support and offset the huge expenditure being incurred on the war on terror and overcome economic difficulties intensified by the global financial crunch.

"We have been aggressively pursuing a policy of trade and investment diplomacy to pursue British business community to invest in Pakistan", he said. He mentioned about the enthusiastic participation of British trade delegation at the Expo 2008 held in October last year in Karachi and termed the visit as 'very fruitful' in generating interest among the participants in food items, power generation, alternative power resources, textiles, sport goods and surgical instruments.

Responding to a question, the High Commissioner said the British businessmen have been assured the protection of their investments and have been asked to invest 'fearlessly' in Pakistan.

"As a matter of fact, in our exchanges with them, they agreed that the ratio of profit offered by Pakistan and guarantees to their investments are very encouraging to attract investment and they are looking at various fields, carrying on negotiations with Pakistani entrepreneurs as well and government to invest British money in different businesses in Pakistan".

Hasan disclosed that later in March a delegation of Pakistan-Britain Trade Investment (PBTIF) led by its Chairman Sir Thomas Harris will be visiting Pakistan to explore possibilities of newer economic ventures, to consolidate and expand existing business.

Besides, PBTIF delegation's visit to Pakistan, there is going to be equally important participation from Pakistan in the International Spring Fair being held in Birmingham from February 5. So far eight major Pakistani business houses/entrepreneurs have registered for the participation of their companies in the Spring Fair.

 

[Pk_Thunder]

Pak-Lanka trade to be increased to 1 bln dollars​

KARACHI, Feb 2 (APP): There exists a potential to enhance the bilateral trade between Sri Lanka and Pakistan to one billion dollars mark.

This was stated by the Consul General of Sri Lanka in Karachi, Sidath Kumar, here on Monday.

He announced that a Sri Lankan food and dance festival will be organized in the metropolis from February 5 to 8 in connection with the 61st anniversary of the independence of Sri Lanka.

The Consul General pointed out that the existing bilateral trade between Sri Lanka and Pakistan is to the tune of 250 million dollars and that it would be enhanced to one billion dollars in near future.

He pointed out that the two countries have already signed the free trade agreement (FTA).

Sidath Kumar said that there also exists a great deal of potential to promote tourism between the two countries in view of our deep friendly ties which are increasing further with the passage of time.

He also pointed out that the growth rate of Sri Lanka remained 6.8 last year. The per capital income was 2,000 US dollars and the literacy rate was 94 percent.

 

[Pk_Thunder]

ECC may raise duty on hundreds of luxury items: mini-budget likely today​

MUSHTAQ GHUMMAN
ISLAMABAD (February 03 2009): The Economic Co-ordination Committee (ECC) of the Cabinet, scheduled to meet on Tuesday under the chairmanship of the Advisor to Prime Minister on Finance, Shaukat Tarin, is expected to approve a mini-budget, revising duties on hundreds of items which the government believes are luxury items and non-essential, sources in Federal Board of Revenue (FBR) told Business Recorder.

The main purpose of revision in duties is to achieve the revenue target set in the agreement with International Monetary Fund (IMF). The ECC is also expected to impose regulatory duty (RD) on dozens of new items, the list of which has been kept secret, and would be circulated before the start of the meeting.

Sources said the list had been finalised on Monday at an inter-ministerial meeting, attended also by Secretaries of different ministries who gave their viewpoint on the proposal. They said that the Commerce Ministry had received representation from FBR in which it had been proposed that duty on different items should be changed to RD. The FBR is facing an uphill task in achieving the enhanced revenue collection target of Rs 1,360 billion in 2008-09.

The revised target envisages growth of 60.57 percent over 2006-07collection of Rs 847.2 billion. This enhanced target of Rs 1.36 trillion is extremely challenging for the tax machinery. The overall collection might be lower than the revised target, which could be around Rs 1.31 to Rs 1.32 trillion, sources added.

The revenue target has been increased from Rs 1.250 trillion to Rs 1.360 trillion under IMF programme, based on projected GDP growth of 5.5 percent and inflation at 23.2 percent, and the combined effect to be 28.7 percent. However, overall average annual inflation is expected to be 20 percent, and GDP growth to remain at 3.5 percent.

The FBR would generate additional amount of customs duty by levying RD on import of various kinds of luxury goods, including some iron and steel items, sources said. Recently, the Advisor to Prime Minister on Finance had stated that the government would not impose any new tax before the next budget, but had admitted that certain measures would have to be taken to increase revenue, that would include an upward revision of duty on luxury and non-essential items.

The government had imposed regulatory duty, ranging from 15 to 50 percent, on import of around 379 luxury items, including vehicles and mobile phones, with effect from August 28, 2008. The Cabinet had also enhanced customs duty on a number of items, including foreign food items/perfumes, etc, to discourage import of non-essential and luxury items.

There is a possibility that withholding tax rate may be enhanced on all luxury items specified in the customs notification relating to regulatory duty. In this way, the FBR would raise withholding tax on all non-essential items already liable to higher rate of customs and regulatory duties.

A wide range of items was subjected to additional customs duty to discourage imports. Vehicles of 1801 cc to 3000 cc capacity would be subjected to 50 percent RD. Mobile phones were subjected to regulatory duty at the rate of Rs 250 per set, and 30 percent RD has been imposed on import of landline telephone sets.

 

[Pk_Thunder]

New housing schemes for Overseas Pakistanis to be launched: Sattar​

ISLAMABAD (February 03 2009): Federal Minister for Overseas Pakistanis, Dr Farooq Sattar has said that new housing schemes will be launched and educational network will be expanded for the overseas Pakistanis. Their problems will be solved on priority basis and maximum welfare projects will be started for them.

The Minister expressed these views while talking to a meeting held here on Monday to brief him about the activities, projects and performance of the Overseas Pakistanis Foundation (OPF). The briefing was given by the Managing Director, OPF, Nayer Hasnain Haider.

Commenting on launching new housing schemes for the overseas Pakistanis, the Minister said that District Governments in all the provinces would be asked to launch new housing scheme while the Ministry will facilitate them. The data of universities in private sector will be collected to make contacts with them for getting 50 per cent concession in fee for the children of overseas Pakistanis. He said land will be get allocated in the new industrial zones being set up in different cities for Overseas Pakistanis so they can also invest their money.

Earlier briefing the Minister, the MD, OPF said 7 housing schemes for overseas Pakistanis in Lahore, Gujrat, Larkana, Dadu, Peshawar, AJK (Phase-I, II) and Turbat have already been completed, while 2 schemes namely OPF Valley Zone-V, Islamabad and Mirpur (AJK) Phase-III are under development and added the work on Zone-V in Islamabad has been started after the lapse of 14 years.

Frontier Works Organisation (FWO) has been awarded the contract, which has completed 10 per cent work on the project. The work on housing scheme in Mirpur has completed 70 per cent. Housing Schemes on Raiwind, Lahore, Phase-I & II and Rawat, Rawalpindi being planned to launch soon.-PR

 

[Pk_Thunder]

Provision of level playing field for development of entrepreneurship proposed​

RECORDER REPORT
KARACHI (February 03 2009): Participants at a business policy roundtable on Monday suggested that the government should provide level playing field and ensure the rule of law to augment the efforts in the area of entrepreneurship development. It was also suggested that promotion of mentorship culture was also required.

The roundtable was jointly organised by the Centre for International Private Enterprise (a nonprofit affiliate of US Chamber of Commerce), MIT Enterprise Forum, and Karachi Chamber of Commerce and Industry (KCCI) at a local, where issues and opportunities in the area of entrepreneurship in Pakistan were discussed.

Dr Ishrat Hussain, Director, Institute of Business Administration, briefed the meeting about IBA's initiative for development of a specialised Centre for Entrepreneurship Development at the institute. He said that the centre would provide a unique opportunity to graduates by exposing them to highly challenging entrepreneurial skills and research.

Advisor to Sindh Chief Minister Zubair Motiwala said that the KCCI is the right platform for collaboration with IBA, MIT Enterprise Forum and CIPE to jointly promote the skill-set required for entrepreneurship development in the country.

Farrok Captain, chairperson of MIT Enterprise Forum, said that the organisation was actively involved in developing a network of potential entrepreneurs and angle funds. He suggested that the sustainability of its efforts could only be ensured if enabling environment was created for developing consistent funding streams through venture capital, private equity and banking system.

Mohammad Azam Roomi, an international expert on entrepreneurship development, in his presentation said that research shows that there is a strong co-relation between the economic growth and entrepreneurship development and, in the era of globalisation, entrepreneurship becomes vitally important to challenge the ever-growing competition.

He suggested that a cohesive approach by the stakeholders ie, the government, business support organisations, academic institutions, media and the civil society was required to reap the benefits of entrepreneurship development in Pakistan.

Citing a recent example of Sateyam case in India, Mohammed Jaffer, chairman of CIPE Pakistan Project Advisory Committee, emphasised the integrity and personal values being the two most important ingredients of entrepreneurship. CIPE's Country Director Moin M Fudda briefed the audience about his organisation and said that its main focus is institutional capacity building and promotion of market-oriented reforms.

He said that since its inception in Pakistan in early 2006, CIPE with its international expertise of working in over 100 countries has been supporting the private sector policy advocacy initiatives in the area of chambers and association development, economic journalism, corporate governance and women entrepreneurship development.

Additionally, in the last three years, CIPE had provided financial grants to ten chambers and associations for specific project initiatives. Ms Shahida Saleem, Member, CIPE Pakistan Project Advisory Committee, and Hammad Siddiqui, Senior Program Manager, CIPE, presented recommendations to the audience.

 

[Pk_Thunder]

FBR tax collections exceed Rs.628 bln ​

ISLAMABAD, Feb 3 (APP): Federal Board of Revenue (FBR) collected Rs.628.22 billion of revenues during first seven months of the current fiscal year, showing an increase of 22.6 per cent over the corresponding period of the last year.

The tax collections during July‑January of financial year 2007‑08

were recorded at Rs. 512.616 billion.

According to the provisional figures, FBR collected Rs.234.595

billion as direct tax during these seven months as against Rs.191.665 billion collected during the last year, showing an increase of 22.6

percent.

The Indirect Taxes registered increase of 22.5 percent during the

time under review by increasing from 320.951 billion during July‑January (2007‑08) to 393.226 billion in July‑January (2008‑09).

Sales tax collection witnessed 25.1 percent increase by increasing

from Rs.199.222 billion in 2007‑08 to Rs.249.161 billion in 2008‑09.

FBR collected Rs.69.515 billion as Federal Excise Duty during

July‑January (2008‑09) as compared to collection of Rs.44.396 billion collected during the corresponding period of last year, showing an

increase of 30.7 percent.

The customs collection also witnessed increase of 10.8 percent as

the FBR collected Rs.83.551 billion customs duties in first seven months

of current financial year against the collection of Rs.75.423 billion

during the same period of last financial year.

During the month of January FBR collected revenue of Rs.74.39

billion, including Rs.24.65 billion direct taxes and Rs.49.731 billion indirect taxes.

During the month under review, FBR collected Rs.31.982 billion as

Sales Tax, Rs. 6.955 billion as Federal Excise Duty and Rs. 10.791 as Customs Duty, according to FBR figures.

 

[Pk_Thunder]

SBP issues guidelines on Islamic financing for agriculture ​

KARACHI, Feb. 03 (APP): State Bank of Pakistan on Tuesday issued the guidelines on Islamic financing for agriculture to help banks develop specific Shariah compliant products in order to meet the financing needs of the farming community.

These Guidelines have been developed in consultation with stakeholders while keeping in view the potential and demand for Islamic banking products in the field of agriculture, says SBP statement here.

The Guidelines broadly cover Islamic modes of financing like Murabaha, Ijara, Musawamah, Salam, Istisna, Musharaka, Diminishing Musharaka, Mudaraba, MuzaraÆa, Musaqat, and Mugharasa that can be used for meeting the financing requirements of farm and non farm sector activities including livestock, fisheries, poultry, orchards etc. In addition to these financing needs, IBIs may also refer to SBP guidelines and instructions for crop and non crop sector activities like guidelines on livestock, fisheries, poultry, horticulture, etc to make further progress on this front. Moreover, the Guidelines have also explained the application and procedure of the Islamic modes of financing.

The State Bank has advised all the banks to use these guidelines for developing their own Shariah compliant products for extending finance to agriculture sector according to their policy and operational and market requirements, subject to compliance with SBP regulations and approval from their Shariah Advisor.

The Guidelines will facilitate Islamic Banking Institutions (IBIs), particularly those who are extending their branch network and outreach in the rural areas, to develop their own products to meet the financing needs of agri/rural community in a Shariah compliant manner. The conventional banks with Islamic Banking Branches may offer these products through Islamic Banking Windows by using their conventional branch network.

Under the Guidelines, individuals/ partnership concerns and all types of legal entities engaged in agriculture related activities, having sufficient knowledge and relevant experience are eligible to get financing under the Islamic financing scheme. As per Prudential Regulations for agriculture financing, these guidelines shall not include financing to traders and intermediaries engaged in trading/ processing/ grading/packaging/marketing of agricultural commodities. Such financing

will fall under Corporate/ Commercial or SME financing and will be

subjected to compliance of corporate/ commercial/ SME regulations.

However, financing under the guidelines can be extended to entities

(including corporate firms, partnerships, and individuals) engaged in farming activities as well as processing, grading, packaging and marketing of

mainly 75% of their own horticulture produce. Financing facilities may be extended, provided IBI is satisfied with the capacity of the customer /sponsor to manage and run the horticulture activities subject to the following conditions:‑

· Customer should be a holder of computerized NIC while usual requirements for corporate clients would apply.

· Customer should not be a defaulter of any IBI / financial institution. This condition may be relaxed in case the IBI is satisfied with creditworthiness of the customer and that earlier default was

circumstantial and not willful.

· IBI is satisfied and feels comfortable with the farmer and guarantors (where applicable) identity character, reputation and creditworthiness.

It is advisable that IBI should have detailed understanding and

information about the customer, his/her capacity to effectively use and repay the debt from the projected cash flow, and/ or any other possible income streams, according to the Guidelines.