Category: Business

The most important business news, explained in a young, easy to understand way. News that affects young career professionals.

  • SBP raises key interest rate to 16% amid economic difficulties to combat inflation

    SBP raises key interest rate to 16% amid economic difficulties to combat inflation

    The State Bank of Pakistan’s Monetary Policy Committee (MPC) increased the key policy rate by 100 basis points to 16 per cent on Friday, the highest level since 1999.

    The decision, according to the central bank, reflects the MPC’s belief that inflationary pressures have proven to be higher and more persistent than anticipated, according to a statement released following the meeting.

    “This decision is aimed at ensuring that elevated inflation does not become entrenched and that risks to financial stability are contained, thus paving the way for higher growth on a more sustainable basis,” the MPC said.

    The SBP stated that, notwithstanding the continuous slowing in the economy, supply shocks both domestically and globally are increasingly responsible for inflation.

    “In turn, these shocks are spilling over into broader prices and wages, which could de-anchor inflation expectations and undermine medium-term growth,” the statement read, adding that consequently the rise in cost-push inflation cannot be overlooked and necessitates a monetary policy response.

    The MPC also pointed out that the immediate costs of fighting inflation are less than the long-term consequences of letting it persist. In the meanwhile, reducing food inflation through administrative steps to clear supply-chain snags and any required imports continues to be a top focus.

    From September 2021 to November 2022, the central bank raised the interest rate by a total of 900 basis points, bringing it to 16 per cent.

    However, the committee noted that core inflation and rising food costs are now anticipated to raise average inflation for FY23 to 21-23 per cent.

  • Pakistan will pay back $1 billion international bond 3 days before its due date: SBP governor

    Pakistan will pay back $1 billion international bond 3 days before its due date: SBP governor

    State Bank of Pakistan (SBP) Governor Jameel Ahmad said on Friday that Pakistan will pay back a $1 billion international Sukuk bond three days before its due date of December 5, 2022.

    Given that Pakistan is recovering from terrible floods that claimed more than 1,700 lives and experiencing an economic crisis, there has been rising concern about its capacity to satisfy its obligations for external finance.

    SBP Governor stated during a briefing that the bond repayment, which expires on December 5, totals $1.08 billion.

    In order to guarantee that the repayment would not have an impact on foreign exchange reserves, Jameel noted that finance had been arranged from both international and bilateral sources. Next week on Tuesday, the Asian Infrastructure Investment Bank was anticipated to make an immediate infusion of $500 million, he added.

    As of November 18, Pakistan’s reserves at the central bank were just $7.8 billion, which is not enough to pay for a month’s worth of imports.

    However, Jameel stressed that he was optimistic the reserve number will be “far higher” by the end of the financial year in June 2023. Reserve levels will rely on the continuous realisation of anticipated inflows and the rollover of loans from friendly nations.

    He stated at the briefing that he anticipates that the inflows from foreign lenders would allow him to meet his external finance needs on schedule. Despite payments of $1.8 billion in November, he emphasised that reserves were steady.

    The early completion of Pakistan’s flood recovery plan, according to the International Monetary Fund (IMF), is crucial for negotiations and ongoing financial assistance from multilateral and bilateral partners.

    Pakistan is now enrolled in an IMF bailout programme, which it joined in 2019. Despite the fact that Pakistan is fighting a full-blown economic crisis with decades-high inflation and limited reserves, a fixed date for the ninth review to release much-needed cash is still pending.

  • Suzuki resumes Swift GLX CVT bookings ‘for a limited time only’

    Suzuki resumes Swift GLX CVT bookings ‘for a limited time only’

    Production and sales at Pak Suzuki Motor Company (PSMC) are picking up speed. The automaker just announced the reopening of bookings for its overall lineup of vehicles on its official Facebook page.

    The best kei car-selling company is also accepting reservations for the Suzuki Swift’s top and most expensive GLX CVT model, according to Pak Suzuki’s official Facebook page. Without providing a specific date, the automaker claimed that the offer is only valid for a short period of time.

    Sales for PSMC also slightly increased last month. This, along with the aforementioned factors, may signal the company’s turnaround from a protracted slump. Even so, the Swift GLX CVT’s Rs3.76 million price tag makes it difficult to sell.

    The new Swift GL CVT Limited Edition model sits below the GLX CVT model and offers a few extra conveniences over the GL CVT model. These features include a center armrest between the passenger seats and a rear top spoiler.

    The Limited Edition variant of Swift costs Rs3,450,000, which is only Rs30,000 more than the Swift GL CVT standard model. The increased cost represents a premium for the added improvements in the Limited Edition variant.

  • Pakistanis pay about Rs800,000 more for a Suzuki Alto than Indians

    Pakistanis pay about Rs800,000 more for a Suzuki Alto than Indians

    Shockingly, the base variant of the Suzuki Alto costs PKR 922,000 (INR 339,000) in India, whereas Pak Suzuki Motor Company, Pakistan’s Suzuki vehicle manufacturer, offers the older model of the Suzuki Alto for a starting price of Rs1.7 million.

    The 0.8-liter petrol engine in the Indian Alto 800 produces 48 PS and 69 Nm and is connected to a five-speed manual transmission. When using CNG, the output drops to 41 ps and 60 nm. The vehicle’s quoted mileage is 31.59 km/kg for CNG and 22.05 km per litre for petrol.

    On the other hand, Pakistani Alto is powered by a 3-cylinder 658 cc R06A petrol engine mated to either a 5-speed manual or auto gear shift (AGS) transmission. The variant we are talking about is the manual base variant. The hatchback offers a maximum output power of 39hp at 6500 rpm and a torque of 56 Nm at 4000 rpm. With a compression ratio of 10:1, it comes with a multi-point injection system. The Suzuki Alto offers seating for four adults and a fuel capacity of 27 litres.

    When comparing the Indian Alto to the Pak Suzuki-produced Alto, the Indian Alto appears to have greater power because it has a larger engine, more torque, and costs less.

    It is worth noting that despite its hefty price tag Suzuki Alto is also Pakistan’s most-selling car currently as it is the only mini hatchback sold below Rs2 million from a prominent automaker.

  • Exports from Pakistan witness 35.7% increase in first four months of FY23

    According to data from the Pakistan Bureau of Statistics (PBS), exports from Pakistan increased by 35.77 per cent in rupee terms during the first four months of the current fiscal year (2022-23) compared to the same time previous year.

    According to Geo, exports from July through October (2022-23) were Rs2,131,776 million, up from Rs1,570,136 in the corresponding period the previous year. This represents a growth of 35.77 per cent.

    In comparison to October 2021, when exports were Rs423,063 million, the country’s exports rose by 24.29 per cent to Rs525,831 million in October 2022.

    When compared to the exports of Rs563,714 million reported in September 2022, the exports climbed by 6.72 per cent in October 2022 on a monthly basis.

    The main commodities of exports during October 2022 were:

    Knitwear (Rs86,400 million), readymade garments (Rs60,778 million), bedwear (Rs47,895 million), cotton cloth (Rs37,407 million), rice other than basmati (Rs20,344 million), towels (Rs17,553 million), made-up articles, excluding towels & Bedwear (Rs12,758 million), fish products (Rs12,057 million), rice Basmati (Rs11,375 million) and cotton yarn (Rs10,819 million).

    On the other side, imports increased by 12.87 per cent from July through October 2022 to a total of Rs4,701,648 million, compared to Rs4,165,590 million during the same time previous year.

    Imports totaled Rs1,039,036 million in October 2022 compared to Rs1,232,299 million in September 2022 and Rs1,093,545 million in October 2021, a drop of 15.68 per cent over September 2021 and 4.98 per cent over October 2021.

    The major imports during October 2022 were:

     Petroleum products (Rs100,436 million), petroleum crude (Rs82,124 million), natural gas, liquified (Rs65,485 million), palm oil (Rs59,739 million), plastic materials (Rs47,301 million), iron & steel (Rs38,517 million), raw cotton (Rs29,943 million), iron & steel scrap (Rs26,037 million), electrical machinery & apparatus (Rs24,058 million) and medicinal products (Rs23,234 million).

  • Pakistani workers earn only Rs160 per ball despite producing 70% of the world’s footballs

    Pakistani workers earn only Rs160 per ball despite producing 70% of the world’s footballs

    More than two-thirds of the world’s soccer balls are made in one of Sialkot’s 1,000 factories, including the Adidas Al Rihla, the official ball of the 2022 FIFA World Cup in Qatar, which begins this month.

    Approximately 60,000 people, or 8 per cent of the city’s population, work in the soccer ball manufacturing industry in Sialkot. They frequently put in long hours and sew the panels of the balls by hand.

    In Sialkot, hand stitching is used in more than 80 per cent of the soccer balls produced. This time-consuming method increases the soccer ball’s durability and aerodynamic stability. Compared to stitches made by machines, the seams are deeper and the tension is higher.

    Bloomberg reports that stitchers make about Rs160 ($0.75) each ball. It takes three hours to finish each one. A stitcher can make roughly Rs9,600 per month by stitching three balls per day. The earnings are modest, even for an impoverished area. According to researcher estimates, a living wage for Sialkot is close to Rs20,000 per month.

    Women make up the majority of those who sew the balls. They might sew two balls in a typical day, go home to prepare meals for their kids, and then go back to work in a nearby village in the late afternoon.

    Usually, men prepare supplies or do quality checks at various phases of the production process. The industries in Sialkot employed kids as young as 5 alongside their parents up until labour laws were passed in 1997. According to a 2016 assessment, the sector in Sialkot is threatened by the ban on child labour since it “took away a large slice of a prospective skilled generation,” creating a persistent worker shortage.

    About 40 million soccer balls are purchased annually worldwide, and sales are anticipated to increase during the World Cup.

  • Workers protest, beaten at biggest iPhone factory in China

    Workers protest, beaten at biggest iPhone factory in China

    Workers at the world’s biggest Apple iPhone factory were beaten and detained in protests over pay amid anti-virus controls, as tensions mounted over Chinese efforts to combat a renewed rise in infections.

    Hundreds of workers may be seen marching down a road in daylight in videos posted on Weibo and Twitter that AFP has confirmed. Some of the workers are being confronted by riot police and those wearing hazmat suits.

    A man with blood on his face was shown in a nighttime video as someone off-camera yelled, “They’re striking people, hitting people. Do they possess morals? Geolocation data that displayed recognisable features, such as a building and barricades close to staff housing on the factory compound, helped AFP verify that video in part.

    In another video, testing booths for Covid-19 were destroyed, and a car was on its side.

    In one daytime video, a loudspeaker could be heard stating, “All workers kindly return to their lodging, do not mix with a small minority of unlawful elements,” as multiple fire trucks were parked near residential buildings and were encircled by police wearing hazmat suits.

    Wide swaths of the population in China have grown weary and resentful as a result of the country’s relentless zero-Covid policy; some have spent weeks being locked up in industries and universities or unable to leave their homes.

    By Wednesday noon, the Weibo hashtag “Foxconn riots” appeared to be blocked, but some text posts discussing extensive demonstrations at the factory were still accessible.

    Requests for comment on the most recent unrest from AFP went unanswered from Foxconn or Apple.

    In the place of the fleeing workers, the firm has offered large bonuses and other incentives for employees who stayed as the local government bussed in fresh labourers in a bid to keep the factory afloat.

    Apple this month admitted the lockdown had “temporarily impacted” production ahead of the holiday season at the Zhengzhou factory, the Taiwanese company’s crown jewel that churns out iPhones in quantities not seen anywhere else.

    Foxconn is China’s biggest private sector employer, with over a million people working across the country in about 30 factories and research institutes.

    China is the last major economy wedded to a strategy of extinguishing Covid outbreaks as they emerge, imposing lockdowns, mass testing and lengthy quarantines despite the widespread disruption to businesses and international supply chains.

    The policy has sparked sporadic protests throughout China, with residents taking to the street in several major Chinese cities to vent their anger against snap lockdowns and business closures.

  • Govt aims to resolve issues of the business community: Finance Minister

    Govt aims to resolve issues of the business community: Finance Minister

    Federal Minister for Finance and Revenue Ishaq Dar said that the goal of the current administration is to facilitate the business community and maintain the trajectory of the nation’s economy.

    According to a press release, he said this while speaking with a team from the Pakistan Sugar Mills Association (PSMA) led by its chairman, Asim Ghani Usman.

    Senior officers from the Finance Division as well as Federal Ministers for Industries and Production Syed Murtaza Mahmud, National Food Security and Research Tariq Bashir Cheema, SAPM on Finance Tariq Bajwa, Chairman FBR, Vice Chairman PSMA Iskander M. Khan, and Vice Chairman PSMA Ahmed Ebrahim Hasham attended the meeting.

    The Finance Minister was informed about the sugar industry’s contribution to the nation’s overall economic development by PSMA Chairman Asim Ghani Usman.

    He also gave a presentation to the group on the problems the sugar sector is having with the GST, stock availability, and sugar export.

    Senator Ishaq Dar, the minister of finance, highlighted the need of sustaining sugar prices and strategic reserves in order to provide the greatest amount of comfort to the general populace.

    He told Chairman PSMA that the current administration is aware of the problems that Pakistan’s sugar sector and sugar cane farmers are now facing.

    Dar promised the group he would deal with their concerns and find a solution as soon as possible. He also offered them his complete support and collaboration.

  • CPEC created 190,000 jobs in less than 10 years: Chinese official

    CPEC created 190,000 jobs in less than 10 years: Chinese official

    A Chinese official said on Sunday that the China-Pakistan Economic Corridor (CPEC), a pilot project of the Belt and Road Initiatives, had generated 190,000 jobs in the previous nine years.

    According to Meng Wei, a representative of China’s National Development and Reform Commission, China and Pakistan created the Joint Cooperation Committee (JCC) on the CPEC in 2013 with an emphasis on collaboration in the Gwadar Port, energy, infrastructure, and industries.

    The two parties have recently increased their areas of collaboration to include agriculture, society, people’s livelihoods, and the information technology industries.

    The Gwadar East Bay Expressway project, the Gwadar Seawater Desalination Project, the Carlot Hydropower Station, China’s assistance to Pakistan’s flood-affected areas, and more may be seen as examples of the cooperation’s success, according to the China News Service.

    The spokesman said, “The two sides will next work together to put the leaders’ agreement into action, speed up their cooperation in areas including agriculture, mining, information technology, society, and people’s livelihood, and support the CPEC’s high-quality building.”

    CPEC is kicking off a new age of collaboration and exchanges between the two nations in a variety of fields, including energy, industry, culture, and trade and business.