Tag: Economic Development

  • Pakistan’s exports to China surge to $1223.5 million

    Pakistan’s exports to China surge to $1223.5 million

    In a noteworthy development, Pakistan’s export of goods and services to China experienced a substantial increase of 39.44 per cent during the initial five months of the current fiscal year (2023–24), as reported by the State Bank of Pakistan (SBP).

    According to the latest SBP data, the overall exports to China reached $1223.532 million from July to November (2023–24), marking a significant rise compared to the $877.444 million recorded during the same period last fiscal year.

    On a year-to-year basis, the exports to China showed a remarkable growth of 36.29 per cent, rising from $199.058 million in November 2022 to $271.316 million in November 2023.

    However, on a month-on-month basis, there was a slight decline in exports to China during November 2023, registering a decrease of 14.90 per cent compared to the exports of $318.842 million in October 2023, as per the SBP data.

    Meanwhile, Pakistan’s overall exports to other countries exhibited a commendable increase of 4.99 per cent in the first five months, surging from US $11.915 billion to US $12.510 billion, according to the SBP data.

    In contrast, the imports from China into Pakistan during the reviewed months amounted to US $4741.099 million, reflecting a decline of 6.03 per cent compared to the corresponding period last year (2022–23).

    On a year-on-year basis, imports from China saw a notable increase of 10.71 per cent, rising from US $906.128 million in November 2022 to US $1003.248 million in November 2023.

    On a month-on-month basis, the imports from China recorded a marginal uptick of 0.99 per cent in November 2023 compared to the imports of US $993.401 million in October 2023, according to the data.

    The overall imports into Pakistan witnessed a significant decrease of 16.02 per cent, declining from $25.341 billion to US $21.281 billion, as reported by the data.

  • IMF board’s January meeting to shape future disbursements for Pakistan

    IMF board’s January meeting to shape future disbursements for Pakistan

    The International Monetary Fund’s (IMF) Executive Board is scheduled to convene on January 11 to endorse the Staff-Level Agreement (SLA) with Pakistan, marking the inaugural review of the $3 billion Stand-By Arrangement (SBA).

    In June, the IMF Executive Board granted approval for a crucial nine-month arrangement with Pakistan, aimed at supporting its economic stabilisation programme.

    This approval facilitated an immediate disbursement of $1.2 billion, with the remaining funds to be disbursed over the programme’s timeline, contingent upon two quarterly evaluations.

    Following negotiations between IMF staff and Pakistani authorities on November 15 in Islamabad, the SLA was successfully reached, paving the way for Pakistan to access SDR 528 million (approximately $700 million).

    This latest disbursement brings the cumulative total under the nine-month $3 billion SBA to nearly $1.9 billion.

    While the initial plan had tentatively slated the IMF Board meeting for December 7 to approve the initial tranche, the confirmed date is now set for January 11.

  • Pakistan and Saudi Arabia reach consensus on long-awaited GCC free trade agreement

    Pakistan and Saudi Arabia reach consensus on long-awaited GCC free trade agreement

    Pakistan’s Commerce and Industries Minister, Dr Gohar Ejaz, led an official delegation to Saudi Arabia. The delegation included secretaries from the Ministry of Commerce, the Board of Investment (BOI), and officials from the Attorney General’s Office. 

    They engaged in discussions with the GCC Chief Negotiator to finalise the investment-related aspects of the Gulf Cooperation Council (GCC) Free Trade Agreement (FTA). Technical teams delved into details such as investment protection and facilitation. 

    Dr Ejaz expressed optimism about strengthening economic ties and highlighted the significance of the investment chapter. 

    The GCC FTA is anticipated to enhance trade, investment, and job opportunities between Pakistan and the GCC. 

    Both parties are considering a joint business forum to further promote economic collaboration, and Dr Ejaz expressed gratitude for the warm hospitality extended by the GCC.

  • FBR restructuring: 145 offices set up to add 2 million new taxpayers

    FBR restructuring: 145 offices set up to add 2 million new taxpayers

    In a bid to streamline operations, the Federal Board of Revenue (FBR) has set up 145 district tax offices, aiming to bring in 1.5 to 2 million new taxpayers by June 2024. 

    Highlighting the significance of revenue and the need to increase the number of tax filers, the Prime Minister also stressed these goals in recent meetings.  

    The initiative is geared towards expanding the tax base, ultimately achieving the desired tax-to-GDP ratio. 

    Heading these offices are district tax officers responsible for compelling income tax returns from non-filers and preventing lapses from existing filers.  

    This marks a pivotal step in bridging the critical tax gap and incorporating all potential taxpayers into the system. 

    The newly established offices, led by dedicated Inland Revenue Officers in BS-17/18, will leverage third-party data obtained from various departments to track information on asset investments and significant expenditures by potential taxpayers.   

    This approach aims to curtail avenues for individuals evading taxation, particularly in terms of registration and filing returns. 

    The department will invoke the recently introduced Section 114B in the Income Tax Ordinance, 2001, to enforce compliance, enabling it to disconnect utility connections (such as electricity and gas) and block mobile SIMs if returns are not filed in response to issued notices. 

    A new documentation law is also in the works to mandate agencies and departments to provide data to the FBR through an automated common transmission system. 

    The Federal Board of Revenue has sought collaboration with the National Database and Registration Authority (NADRA), and the Chairman of NADRA is ensuring assistance for the expansion of the tax base through data integration. 

    This comprehensive initiative not only strengthens the FBR’s capacity to enforce tax laws but also facilitates taxpayers by establishing dedicated offices, ultimately fostering a more efficient and effective taxation system. 

  • Pakistan exports first batch of Changan Oshan X7 SUVs to Kenya and Tanzania

    Pakistan exports first batch of Changan Oshan X7 SUVs to Kenya and Tanzania

    Pakistan has made a significant foray into the global automobile market, marking a historic moment as it exported a batch of 14 SUV vehicles to Kenya and Tanzania, as reported by ARY News on Thursday.

    In a landmark achievement, Pakistan, through the collaboration of Master Changan Motors, a joint venture between Pakistan and China, has officially joined the league of car-exporting nations. This endeavour has solidified their position as the first automotive company to send SUV vehicles to foreign shores.

    The occasion was celebrated with a ceremonial event held in Karachi, commemorating the milestone of becoming the inaugural Pakistani-Chinese auto entity to export vehicles to two overseas destinations. Notably, the ceremony was attended by the Federal Secretary of Industries and Production, Asad Rehman.

    Rehnan also revealed the government’s intent to urge auto manufacturers to revise their car prices, especially in light of the notable depreciation of the US dollar (USD). He underlined the efforts in this direction by mentioning a recent newspaper advertisement released by an auto company, signaling its commitment to reducing vehicle prices.

    The export of the Oshan X7 SUV is a significant milestone for Pakistan as it ventures into the global automobile market, and this achievement carries even greater importance given the challenging economic conditions the country is currently facing.

    In a groundbreaking move, Pakistan’s collaborative effort with a Chinese automotive company, Master Changan Motors, marked their entry into the league of car exporters. They proudly achieved this milestone by sending the initial consignment of 14 SUV vehicles to Kenya and Tanzania.

    A special ceremony was organised in Karachi to celebrate the occasion, as it signified the first instance of a Pakistani-Chinese automotive company venturing into foreign vehicle exports.

    The Federal Secretary of Industries and Production, Asad Rehman was also present at the ceremony.

    During the ceremony, Asad Rehman conveyed the government’s intention to encourage auto companies to lower their car prices, given the significant decline in the value of the US dollar (USD).

    He also mentioned that an automotive firm had recently placed a newspaper advertisement advocating price reductions.

    Master Changan Motors, the Pakistan-Chinese automotive collaboration, proudly shipped its SUV model, the Oshan X7, to Kenya.

    This achievement is a notable milestone for Pakistan, considering the challenging economic circumstances it faces.

  • Pakistan expected to export cars to Kenya

    Pakistan expected to export cars to Kenya

    Master Changan Motors, a noteworthy Pakistani-Chinese collaboration, has initiated the export of its Oshan X7 mid-size crossover to Kenya.

    The sight of containers laden with Oshan X7 vehicles en route to the port in Karachi has confirmed this export venture.

    Reliable sources affirm that a substantial quantity of Oshan X7 SUVs will soon grace Kenyan roads.

    While the official announcement of this export endeavour is yet to be made, it is anticipated to be unveiled at a ceremony scheduled for October 12, hosted at their Karachi manufacturing facility.

    In the past, Changan Pakistan’s CEO, Danial Malik, articulated the company’s intention to export right-hand drive vehicles initially designed for the Pakistani market to various other regions.

    Historically, the parent company produced left-hand drive vehicles exclusively for its domestic clientele.

    Danial Malik also emphasised that Changan’s Pakistan-assembled vehicles would find their way to distributors in South Africa, Malaysia, Indonesia, and other countries where right-hand drive vehicles are customary.

    This development unfolds against a backdrop of considerable economic challenges confronting Pakistan, including soaring inflation and the burdensome cost of conducting business. Exacerbating the situation, interest rates are presently at historic highs, resulting in decreased demand for automobiles.

    Furthermore, car prices within Pakistan have surged significantly, amplifying the financial strain on hard-pressed consumers.

    In response, the government has been strongly encouraging the automotive sector, which is heavily reliant on imported materials, to bolster its exports. The initial objective was to achieve 2 per cent of the total imports, a target unmet in FY23.

    According to Samaa, in May 2022, Pakistan marked a milestone by exporting its first vehicle crafted by Master Changan Motors under the newly implemented Auto Industry Development and Export Policy (AIDEP 2021-26). Notably, Pakistan stands as the sole country outside China to manufacture the latest Changan Oshan X7 model.

    Concurrently, the Pakistan Automotive Manufacturers Association (PAMA) disclosed on October 11 that car sales in Pakistan had risen by 10 per cent in September compared to the preceding month, with a total of 8,312 units sold. 

    Nevertheless, this apparent short-term upturn can be attributed to improved access to raw materials, whereas the year-on-year data indicates a substantial 26 per cent decrease in sales for the corresponding period.

  • Pakistan plans to establish 5,000 e-working centres to empower freelancers 

    Pakistan plans to establish 5,000 e-working centres to empower freelancers 

    Dr Umar Saif, the Caretaker Federal Minister for Information Technology and Telecommunications, has announced a significant government initiative to establish 5,000 collaborative e-working centres designed specifically for freelancers.  

    In a recent statement, Minister Saif unveiled plans to provide interest-free loans for the creation of these joint E-Working Centres, with the primary goal of facilitating freelancers and, in turn, generating millions of job opportunities throughout the country.  

    A press release from the Ministry, issued on Thursday, also highlighted Minister Saif’s commitment to attracting global investors to support startup ventures. Additionally, he mentioned an upcoming visit to Saudi Arabia to further these discussions.  

    Furthermore, Minister Saif emphasised a positive dialogue with Caretaker Finance Minister Shamshad Akhtar, focusing on a comprehensive 5-point agenda centred on the IT sector. One key topic of discussion was the issue of retaining dollars within the IT industry.   

    According to Geo News, the Ministry believes that addressing this matter will not only repatriate overseas IT accounts to Pakistan and restore investor confidence but also enhance the inflow of foreign currency into the country, consequently boosting the volume of IT exports.  

    Separately, Minister Saif stressed the need for the Pakistan Software Export Board (PSEB) to redefine its role. He proposed that the PSEB should actively assist IT companies in securing international clients and expanding their businesses on the global stage, ultimately promoting the image of Pakistan in the international market.  

    During the 58th meeting of the PSEB, Minister Saif underlined Pakistan’s unique strengths in terms of IT professionals and its favourable time zone. He emphasised the importance of presenting Pakistan’s IT/ITeS products to the world effectively. He suggested that the PSEB should collaborate with Pakistan’s trade and commerce missions in embassies worldwide to support the growth of exports by Pakistani IT companies.  

    In a directive to the PSEB, Minister Saif urged the expedited implementation of all necessary measures to train 200,000 IT professionals, with the goal of contributing $5 billion to the country’s IT exports. The meeting also delved into discussions concerning the IT industry and strategies for increasing investment within Pakistan. 

  • Pakistan’s foreign exchange reserves boosted by $2 billion deposit from Saudi Arabia

    Pakistan’s foreign exchange reserves boosted by $2 billion deposit from Saudi Arabia

    Pakistan’s central bank has received a significant financial boost of $2 billion from Saudi Arabia, as announced by Federal Minister Ishaq Dar. This infusion of funds will greatly bolster the country’s low foreign exchange reserves.

    During a media briefing on Tuesday, Dar expressed gratitude, stating, “Our brother nation, Saudi Arabia, has deposited $2 billion into the account of the State Bank of Pakistan (SBP).” He further emphasised that this contribution will directly enhance Pakistan’s foreign exchange reserves.

    At the close of last week, the SBP’s forex reserves grew by $393 million to reach $4.463 billion, primarily due to official government inflows. Over the past two weeks, the SBP’s reserves have surged by $937 million. However, it is important to note that these reserves still only cover approximately a month’s worth of imports.

    Dar stated, “These $2 billion will be reflected in the SBP’s reserves by the week ending 14th July.” The finance minister also commended the Saudi government, specifically King Salman and Crown Prince Mohammad bin Salman, for their instrumental role in this gesture of support. Dar extended heartfelt appreciation to the leadership of the Kingdom of Saudi Arabia for depositing $2 billion with the SBP and expressed optimism about future positive economic developments. He declared that Pakistan’s economic situation has nearly stabilised and is poised for growth.

    This development follows the recent announcement by the International Monetary Fund (IMF) that its staff and Pakistani authorities have reached an agreement on policies backed by a $3 billion, nine-month Stand-By Arrangement (SBA). The staff-level agreement is pending approval by the IMF Executive Board, with a decision expected on 12th July.

    Read more: Pakistan commits to 4% annual profit on $2 billion deposit from Saudi Arabia

    Nathan Porter, IMF Mission Chief to Pakistan, stated, “The new SBA builds upon the authorities’ efforts under Pakistan’s 2019 EFF-supported program, which expires at the end of June.” The new IMF arrangement, viewed as highly favorable for the government and economy amidst the ongoing crisis, extends Pakistan’s commitment to the lender well into the second half of fiscal year 2023-24. Moreover, it represents an upgrade from earlier expectations of receiving $1.1 billion following the ninth review.

    Experts have consistently emphasised the critical nature of resuming the IMF bailout package for Pakistan, a cash-strapped South Asian economy grappling with a balance of payments crisis. In addition to mitigating risks of potential default, the funding from the international lender is expected to pave the way for additional inflows from Pakistan’s multilateral and bilateral partners.

  • Khunjerab Pass reopens to boost bilateral trade between Pakistan and China

    Khunjerab Pass reopens to boost bilateral trade between Pakistan and China

    In a press release issued by the PM Office Media Wing, Prime Minister Muhammad Shehbaz Sharif expressed his pleasure over the reopening of the Khunjerab Pass on Sunday. He stated that this development would help to increase bilateral trade between Pakistan and China, and described it as a welcome occasion for boosting trade with “Iron brother China.”

    The prime minister emphasised that the reopening of the Pass had removed a hurdle that would further expedite the pace of work on the China Pakistan Economic Corridor (CPEC). He added that the restoration of the trade route between the two countries, after a span of three years, was a matter of great rejoicing.

    Furthermore, the prime minister noted that the journey towards CPEC had started way back in November 2019 and recommenced in the year 2023. He expressed his resolve to move ahead on CPEC with dual speed in comparison to 2018.

    He said that CPEC is a gift of progress and prosperity given by Muhammad Nawaz Sharif and the Chinese leadership for the region and the people. The prime minister also mentioned the affection and cooperation from the Chinese leadership for the people of Pakistan, which he described as unforgettable.

    The prime minister expressed his disappointment over a “foreign funded person” who had created controversy over CPEC. However, he appreciated the relevant authorities of the two countries and the team members over the restoration of trade and travel facilities.

  • Pakistan received over $48 billion in bailout loans from China between 2008-2021

    Pakistan received over $48 billion in bailout loans from China between 2008-2021

    A study published on Tuesday revealed that China has spent $240 billion rescuing 22 developing countries between 2008 and 2021. This amount has increased in recent years as more countries struggled to repay loans taken for the building of “Belt & Road” infrastructure.

    The researchers, from the World Bank, Harvard Kennedy School, AidData, and the Kiel Institute for the World Economy, found that almost 80 per cent of the rescue lending was made between 2016 and 2021, primarily to middle-income countries such as Pakistan, Argentina, and Mongolia. However, lending has decreased since 2016 as many projects failed to generate expected financial dividends.

    The report also highlighted that Beijing’s ultimate objective was to rescue its banks, which is why it engaged in the risky business of international bailout lending. Chinese loans to countries in debt distress increased from less than 5 per cent of its overseas lending portfolio in 2010 to 60 per cent in 2022.

    Argentina received the highest amount of bailout money with $111.8 billion, followed by Pakistan with $48.5 billion and Egypt with $15.6 billion, while nine countries received less than $1 billion.

    According to Reuters, the People’s Bank of China (PBOC) swap lines accounted for $170 billion of the rescue financing, including in Suriname, Sri Lanka, and Egypt. Bridge loans or balance of payments, supported by Chinese state-owned banks, amounted to $70 billion. Rollovers of both types of loans totaled $140 billion. However, the study criticized some central banks for potentially using the PBOC swap lines to artificially pump up their foreign exchange reserve figures.

    China is currently negotiating debt restructurings with several countries, including Zambia, Ghana, and Sri Lanka. However, it has been criticized for holding up the processes. In response, it has called on the World Bank and International Monetary Fund to offer debt relief as well.