Tag: imports

  • ‘Pakistan is not going to default’: Miftah Ismail

    ‘Pakistan is not going to default’: Miftah Ismail

    The pressure on the Pakistani rupee will “vanish” in a few weeks, according to Finance Minister Miftah Ismail, who also stated that Pakistan is not going to default.

    He predicted that dollar inflows into Pakistan will exceed dollar outflows soon, creating a “stable exchange rate”. Additionally, he said that within three months, imports will “organically” decline, and exports will soar as a result of the government’s impending strategic plan.

    “It’s no fun going to the world, to the International Monetary Fund (IMF), to the Chinese, to the Saudis, asking for money,” said Miftah Ismail in an interview with Mosharraf Zaidi, CEO of advisory services firm Tabadlab.

    According to Miftah, the IMF loan influx will be completed within weeks.

    “The only thing is that from August 1 to August 15, the directors of the IMF are on vacation. That’s why the meeting is starting a little later than I’d prefer,” he added.

    The finance minister defended the government’s policy of limiting imports to stop the dollar from leaving the country during the discussion. “Nobody is happy with the surgery, but sometimes it’s necessary,” he added.

    Without mentioning the country, Miftah stated that Pakistani authorities had requested a “friendly country” to shore up foreign exchange reserves through dollar-denominated deposits but it turned down Islamabad’s request, saying the latter never returned the deposits.

    The friendly nation subsequently expressed interest in purchasing shares of publicly traded government-owned companies under a buyback arrangement, giving Islamabad the option — but not the obligation — to repurchase the same ownership at a 5 per cent higher price.

    In addition to stating that “there’s not even (a question of) price discovery,” the minister stated that the country “tried to help Pakistan and is giving a great deal”.

    =Earlier today, the Pakistani rupee again fell to a record low versus the US dollar. During intraday trading on Wednesday at 1:00pm, the US dollar reached Rs239.

  • Hyundai-Nishat announces a hefty price hike following KIA

    Hyundai-Nishat announces a hefty price hike following KIA

    Hyundai-Nishat Motors raised the pricing of its Tucson variants by Rs1.1 million, citing the decline in the currency as the primary cause, following Lucky Motor Corporation’s price increases for its KIA-brand vehicles.

    After an increase of Rs1.1 million price increase for the c, the Hyundai Tucson FWD model is now offered for Rs6.89 million. The price of the AWD version has increased by Rs1.1 million to Rs7.39 million.

    According to a sales representative, the company would accept reservations upon full payment, and delivery is anticipated to occur in August and not take longer than 60 days.

    Prior to that, Lucky Motor announced an increase in the prices of its KIA-brand vehicles starting on July 19, with the rise reaching as high as Rs1.1 million.

    The corporation said that the ongoing depreciation of the rupee versus the dollar was to blame for their need to raise pricing.

    “Kia and Hyundai have taken the initiative to increase car prices but the rest of the automakers will follow too,” said Sunny Kumar, Research Analyst at Topline Securities.

    “The last pricing most of the carmakers did was when the dollar stood at Rs185. It has now crossed Rs225. The price hike was imminent and announcements from other automakers could be expected anytime now.”

    According to Brecorder, the CEO of Lucky Motor Corp, Asif Rizvi, acknowledged that the auto sector primarily employs imported materials and that localised parts also contain a large percentage of foreign components while speaking on the sidelines of the Peugeot 2008 launch in March.

  • Govt unveils Rs9.5 trillion budget 2022-23, focused on sustainable growth

    Govt unveils Rs9.5 trillion budget 2022-23, focused on sustainable growth

    The federal budget for 2022-23 has been revealed with a total outlay of Rs9,502 billion. It includes measures for sustainable economic growth, industrial and agricultural development, and aid for the poor ones.

    Finance Minister, Miftah Ismail began his address by claiming that the PTI administration had left Pakistan’s economy in shambles and harmed investor confidence by often switching finance ministers and monetary policies.

    He slammed former Prime Minister Imran Khan, claiming that he never cared about the poor, claiming that “keeping an eye on potato and tomato prices is not a PM’s duty”.

    He claims that the governing party took control of the country despite the fact that it will have to make difficult decisions to save the economy, which will affect their individual parties’ appeal, but they chose to put the country’s interests ahead of their own.

    Relief for working class and the poor

    He claimed that the budget is geared at providing greater relief to the working class and the poor, as opposed to the wealthy, because the working class prefers to buy local products over foreign ones, boosting the economy.

    Budget 2022-23, according to Miftah Ismail, will concentrate on offering facilities to farmers planting crops that supply cooking oil, such as corn and sunflower, so that the country does not need to import palm oil, which is at an all-time high in the worldwide market.

    Slashing furniture, stationary expenses in govt offices

    Considering the current economic downturn, the administration has decided to restrict operational expenditures to the absolute minimum, and that new furniture and stationary for government offices will be completely prohibited. Other than obligatory diplomatic visits, all government-sponsored foreign trips will be prohibited.

    Education

    The government has set aside Rs65 billion for the Higher Education Commission (HEC) in the current budget. In addition, the HEC has been granted Rs44 billion for development programmes, which is 67 per cent more than the previous year.

    Miftah Ismail said that this is a demonstration of our commitment to the youth. We are encouraging provinces to completely fulfill their obligations in terms of higher education promotion in the coming years, he said. The HEC budget includes 5,000 scholarships for Balochistan and tribal district students. He added that a unique scholarship programme has been introduced for Balochistan’s coastal communities.

    The Finance Minister said that 100,000 laptops would be provided to students around the country on affordable instalments. Funds have also been set aside for the purchase of cutting-edge equipment to improve engineering and technology education.

    15 per cent Increase in govt employees’ salaries

    In Budget 2022-23, Miftah Ismail announced a 15 per cent increase in government employee salaries, as well as the merger of adhoc allowances.

    He said that the tax on savings certificates, pensioners’ benefit accounts, and martyrs’ family assistance accounts had been reduced from 10 per cent to 5 per cent.

    Small merchants will be subject to a new fixed income and sales tax regime, according to the Minister. Electricity bills would be used to collect taxes ranging from Rs3,000 to Rs10,000 under this method. This will be a final agreement, and FBR will have no right to inquire about the tax.

    According to Miftah Ismail, a proposal has been made to increase initial depreciation rates for industries and other businesses from 50 per cent to 100 per cent in the first year.

    Furthermore, he stated that any tariffs imposed on industrial units during the import of raw materials will be considered adjustable in order to protect the business community’s working capital.

    New industrial policy

    He stated that an industrial policy is being implemented in partnership with the Asian Development Bank in order to boost the country’s industrial base. He stated that the Prime Minister has directed that all exporter claims be resolved as soon as possible.

    A sum of Rs40.5 billion is due to them right now, and we will pay it as soon as possible. Regardless of financial challenges, sales tax refunds are issued swiftly. Industrial feeders have been spared from load-shedding, according to him, in order to ensure that the industrial sector has uninterrupted power supply.

    A new strategy for promoting investment in the country is being developed which aims to provide an enabling atmosphere for investors by eliminating the lengthy procedure. The government will overhaul the dispute settlement structure to make it easier for domestic and foreign investors.

    Boosting agriculture sector

    Talking about the agriculture sector, Finance Minister stated that Rs21 billion had been set aside to boost agriculture and livestock productivity. He stated that the Ministry of Food Security, in consultation with the Planning Commission and the provinces, has developed a three-year growth strategy. This plan aims to increase agri-production, increase farmer prosperity, and promote smart agriculture and self-sufficiency.

    National Youth Commission

    The Finance Minister also announced the development of a National Youth Commission to help youth realise their full potential. Various plans for the youth, he noted, have been offered. He stated that a coordinated strategy is being implemented to strengthen the role of educated youth in the growth of the country. According to him, the youth employment initiative will create over two million job chances.

    He added that a scheme to foster youth entrepreneurship will be launched, under which interest-free loans of up to Rs500,000 and loans of up to Rs25 million will be made available on easy payments. He stated that in this lending arrangement, a 25 per cent quota has been been aside for women. He stated that women will be given precedence in hi-tech training in order to achieve economic empowerment. Youth development centres would be set up over the country, he said.

    A green youth movement would be launched to involve young people in environmental initiatives. Funds will be set aside to distribute laptops on a merit-based and instalment basis, as well as the construction of 250 mini-sports stadiums across the country. Miftah Ismail stated that an innovation league would be established in order to improve the youth’s potential. He said that a talent quest and sports drive programme will be developed for youngsters between the ages of eleven and twenty-five.

    Reduction in govt spending

    According to the Finance Minister, the current government’s top focus is austerity. This budget includes a reduction in government spending, and we are taking meaningful moves in that direction. He stated that automobile purchases will be completely prohibited. Apart from development initiatives, procurement of furniture and other products would be prohibited. Cabinet members and government officials will have their gasoline quotas lowered by 40 per cent. There will also be a ban on international tours paid for by the government, with the exception of the most important ones.

    A medium-term macroeconomic framework has been established to put the economy on a road of development, according to the Finance Minister. He emphasised his belief that by implementing this framework, we will be able to steer the economy in the right way. Our biggest problem, he remarked, is to expand without a current account deficit. As a result, a minimum of 5 per cent will be obtained without disrupting the balance.

    Improved fiscal and monetary policy

    He said that the GDP will increase from Rs67 trillion to Rs78.3 trillion in the coming fiscal year and the government is attempting to lower inflation through improved fiscal and monetary policy. During the next fiscal year, inflation will be decreased by 11.5 per cent.

    He predicted that the tax-to-GDP ratio will rise to 9.2 per cent in the coming fiscal year, up from 8.6 per cent now. He noted that in 2017-18, we had kept this ratio at 11.1 per cent. He stated that the overall deficit, which is currently at 8.6 per cent, will be steadily reduced. In the coming fiscal year, this will be reduced to 4.9 per cent. Similarly, the overall primary balance, which presently stands at -2.4 per cent of GDP, will be reduced to 0.19 per cent.

    Import and export

    Imports, which are estimated to be $76 billion this fiscal year, would be lowered to $70 billion the following fiscal year, according to the Finance Minister. Exports are currently $31.3 billion, but will increase to $35 billion in the coming fiscal year. The current account deficit will be decreased from -4.1 per cent of GDP to -2.2 per cent of GDP.

    Remittances, which are predicted to continue at $31.1 billion this fiscal year, are expected to grow to $33.2 billion next fiscal year.

    Key allocations in Budget 2022-23

    Rs1,523 billion allocated for defence

    Rs800 billion allocated for Public Sector Development Program (PSDP)

    Rs699 billion allocated for targeted subsidy

    Rs364 billion allocated for Benazir Income Support Program (BISP)

    Rs64 billion allocated for Higher Education Program

    Rs25.99 billion allocated for Atomic Energy Commission

    Rs24 billion allocated for Health

    Rs21 billion allocated for Benazir Nashunuma Program

    Rs11 billion allocated for Agriculture

    Rs10.12 allocated billion for food security 

    Rs9.60 billion allocated for Climate Change

    Rs530 billion allocated for pension funds

    Rs3.46 billion allocated for Maritime Affairs

    Key announcements

    The GDP growth target has been set at 5 per cent.

    Remittances are expected to total $33.2 billion.

    Inflation will be held at 11.5 per cent.

    FBR has set a revenue target of Rs7,004 billion.

    Non-tax revenue objective is set at $2 billion.

    The goal set for imports is $70 billion.

    The target for exports is $35 billion.

    Government employees will have a 15 per cent raise in pay.

    Under a new employment scheme, youngsters will be eligible for interest-free loans up to Rs500,000.

    Distributors and manufacturers will no longer be subject to an 8 per cent withholding tax.

    On national saving systems, the profit rate dropped from 10 per cent to 5 per cent.

    Cinema owners and film makers are exempt from income tax.

    On cars with engines larger than 1600cc, the advance tax will be raised.

    Pharmaceutical materials are exempted from any customs duties.

    This is a developing story..

  • Pakistan’s textile sector witnesses a significant downturn in growth

    Pakistan’s textile sector witnesses a significant downturn in growth

    Pakistan’s Economic Survey 2021-22 reveals that the textile industry expanded by 3.2 per cent during July-March in fiscal year 2021-22, compared to 8 per cent in the same period last year, demonstrating a considerable setback in progress.

    The poundage of the textile sector has declined from 20.9 to 18.16 per cent in QIM 2015-16, but it remains the highest among all LSM sectors, according to Brecorder.

    Woolen segment production grew the most, with a 38.9 per cent increase in blankets, a 27.9 per cent increase in woollen and carpet yarn, and a 19.1 per cent increase in woollen worsted cloth. Yarn and cloth production increased by 0.7 per cent and 0.3 per cent, respectively.

    Congruent production units, invariant capacity and elevated cotton prices owing to demand and supply gap disruptions have moderated the growth momentum of the cotton sector, stated the Economic Survey 2021-22 document, unveiled by Finance Minister Miftah Ismail.

    “Depreciation of PKR restrained the production of jute, as most of the raw material is imported from Bangladesh. However, surge in imports of textile machinery, rising demand for concessionary financing from textile firms and high exports of this sector showing a sizable improvement in the textile sector,” it added.

    With a weight of 6.08 in the LSM, wearing garments has been detached from the textile sector. It grew by 34 per cent compared to 35.6 per cent compression.

    The sector has been growing traction both locally and internationally, with garment production increasing by 34 per cent during the time frame. Garment exports have also increased by 33.9 per cent in aspects of volume.

    Textile is Pakistan’s most valuable manufacturing sector, with the widest production chain and intrinsic value addition ability at each point of the process, from cotton to ginning, spinning, fabric, dyeing and printing, made-ups and garments.

    This sector accounts for well almost one-fourth of industrial value addition and employs approximately 40 per cent of the industrial workforce. Textile products have maintained an average share of about 61.24 per cent in national exports, excluding seasonal volatility.

    In the meantime, knitwear exports decreased by 4.8 per cent in quantity while increasing by 34.1 per cent in value during the period under review. Towel exports totaled $819.6 million, up from $692.1 million, representing an increase of 18.4 per cent in value and 5.1 per cent in quantity.

    The ready-made garment industry has surfaced as a crucial small-scale industry in Pakistan, and it is a good source of providing employment opportunities to many people with a very low capital investment. Exports increased by 33.9 per cent in quantity and 26.2 per cent in value from 27.8 million dozen to 37.3 million dozen worth $2.8 billion, up from $2.27 billion in the same period last year.

    Meanwhile, Pakistan exported synthetic textile fabrics worth $343.59 million in comparison to $269.20 million in the same period last year, representing a 27.6 per cent increase. In terms of volume, synthetic textile exports fell by 33.6 per cent.

    The ceremony was also attended by Ahsan Iqbal, Minister of Planning, Development, and Special Initiatives, Khurram Dastgir, Federal Minister of Power, and Aisha Ghaus Pasha, Minister of State for Finance and Revenue.

    Furthermore, the survey underscored the key features of the government’s policies aimed at restoring macroeconomic stability and putting the economy on a growth path. Addressing the launch event, Miftah Ismail stated that the government has avoided a default due to the difficult decisions made by the current administration. He said that the country is now on the path of stability.

  • PM Shehbaz directs to eliminate taxes on raw materials used by export industries

    PM Shehbaz directs to eliminate taxes on raw materials used by export industries

    Prime Minister (PM) Shehbaz Sharif, urged authorities to abolish all taxes on raw materials used in the export industry and to set up task teams to attract investment in a variety of local industries.

    The new government has been attempting to put in place a long-term plan to resuscitate Pakistan’s struggling economy, with the premier reaffirming his plea for increased exports to alleviate the country’s growing cash constraint yesterday.

    The premier met with a team from the American Business Council, which included officials from the pharmaceuticals, food processing, IT, e-commerce, retail, textile, sports, and logistics sectors, according to APP.

    Federal ministers Syed Naveed Qamar, Makhdoom Murtaza Mahmood, and Marriyum Aurangzeb were also present at the meeting.

    Task groups were constituted by the prime minister to solicit investments in a variety of areas. Tourism, pharmaceuticals, information technology, e-commerce, large-scale manufacturing, and agriculture will all have task teams constituted.

    He reminded the team that the government was working hard to guarantee that high-quality agricultural products were produced for export. The government was pushing for policy consistency for the first time, he said, because “subjects of the national economy and public welfare are above politics”.

    Shehbaz Sharif also asked the secretary of trade and the secretary of the Board of Investment to guarantee that the investors’ concerns were addressed immediately, and he requested a compliance report within a week.

    Business representatives, on the other hand, told state media that government initiatives had helped them regain investor confidence, and that the pre-budget dialogue with stakeholders was a “positive step”.

    PM Shehbaz has called all stakeholders to get together on Tuesday, ahead of the budget declaration on June 10, to finalise a long-term plan to rebuild the ailing economy. Top businessmen, agriculturists, and economists attended the day-long pre-budget meeting, where they offered advice on how to lift the country out of its unparalleled economic crisis.

    During the meeting, the premier pledged that their suggestions would be taken into consideration and that separate plans for agricultural, industrial, and financial expansion would be developed.

    PM Shehbaz also stated that political stability cannot be attained without economic stability and that it was past time for the elite class to make sacrifices and for non-productive assets such as real estate to be taxed. He advised businesses to invest in renewable power rather than relying on the country’s vast coal reserves for power generation.

    The prime minister also emphasised the importance of reducing imports while increasing exports, assuring attendees of the government’s full support in expanding local business and eradicating any barriers.