Tag: inflation

  • Govt announces Rs3 billion subsidy to provide ghee at discounted rate

    Govt announces Rs3 billion subsidy to provide ghee at discounted rate

    The Minister for Information and Broadcasting Marriyum Aurangzeb announced on Monday that the government would provide a Rs3 billion subsidy to lower the price of ghee to assist the masses.

    She told a press conference that the market price of ghee is currently Rs550 per kg, but it is being sold at Rs300 per kg in utility stores across the country, according to AAJ News

    “The government is bearing a cost of Rs250 per kg,” she added, adding that the price of ghee was Rs150 per kg when the Pakistan Muslim League-Nawaz (PML-N) handed over the office to the Pakistan Tehreek-e-Insaf (PTI) in 2018.

    On the other hand, the government has increased the price of ghee and cooking oil at other retailers.

    She further stated that a 10 kg wheat bag could be purchased for Rs400 at any utility store in Pakistan.

    The minister said that on June 6, about one hundred mobile vans were added to the Utility Stores Corporation (USC) network, citing residents of Khyber-Pakhtunkhwa (KP) having difficulty obtaining discounted items due to limited distribution of utility stores.

    9,500 new utility stores

    “In addition, on June 9, 500 new USC stationary stations were set up to deliver wheat, and 100 more items are being added today,” she stated. “Since June 6, the USC network has grown by 700 units”.

    Price control committees have also been established, according to her, to keep hoarding and reselling of USC materials under check. The availability of items at utility retailers, she said, was also being watched.

    The minister stated that Rs17 billion had been set aside to give the public with low-cost sugar, ghee, and wheat.

  • Direct taxes target predicted at Rs2,560 billion for FY 22-23

    In an attempt to meet the Federal Board of Revenue’s (FBR) revenue collection target of Rs7,255 billion for the upcoming fiscal year, the direct taxes target has been predicted at Rs2,560 billion, up from Rs2,182 billion in 2021-22.

    According to Brecorder, the indirect taxes (net) estimates were predicted at Rs4,695 billion in the macroeconomic framework for 2022-23. Direct taxes forecasts included income tax and withholding taxes, whereas indirect taxes projections included sales tax, customs duty, and Federal Excise Duty (FED).

    The indirect tax goal for 2022-23 has been set at Rs4,695 billion, up from Rs3,647 billion in 2021-22, representing a Rs1,048 billion rise. The indirect tax revenue for the fiscal year 2021-22 was Rs3,440 billion.

    The entire collection of indirect taxes in 2020-21 was Rs3,008.2 billion. Direct taxes are expected to reach Rs2,560 billion in the next fiscal year, up from Rs2,182 billion in 2021-22, a Rs378 billion increase.

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

    During the first 11 months of the current fiscal, the FBR collected roughly Rs1.9 trillion in direct taxes. In the fiscal year 2020-21, direct tax collections totalled Rs1,726.0 billion. Withholding taxes account for 72 per cent of the total direct tax collection.

  • Pakistan’s GDP projected to climb by 5-6 per cent in FY 22-23

    Pakistan’s GDP projected to climb by 5-6 per cent in FY 22-23

    Finance Minister Miftah Ismail forecasted that Pakistan’s GDP would expand by 5 per cent to 6 per cent, and that the government would keep inflation under control, while speaking at the pre-budget conference on Tuesday, June 7.

    The Finance minister expressed his ‘high confidence’ in the agreement with the International Monetary Fund (IMF) and revealed that the government had developed a progressive fiscal budget with a deficit of less than 5 per cent, according to Express News.

    “We had to make difficult decisions; it’s difficult for any prime minister to authorise such a hike in petrol costs, but we were losing money.” “Every month, we lost more than 120 billion rupees,” the minister said.

    According to him, the PTI administration signed an IMF agreement that mandated the reduction of fuel subsidies.

    Miftah claimed the administration has re-engaged with China, Saudi Arabia, and the United Arab Emirates (UAE), among other countries, as part of the present government’s successful negotiations.

    “Following a meeting between Foreign Minister Bilawal Bhutto and Chinese Prime Minister [Li Keqiang], China decided to re-roll their $2.4 billion programme. China has lowered its borrowing rate from 2.5 per cent to 1.5 per cent, saving the country money “Miftah said, “Roughly $23 million”.

    He went on to say that the Saudis had agreed to increase Pakistan’s “oil line” and offer the country with a $100 million revolving credit.

    According to Miftah, the current government inherited a country with the world’s third highest inflation rate, 20 million people living in poverty, and widespread unemployment.

    He went on to say that the country’s debt payments had increased tremendously as a result of the amount of loans taken on by the PTI government.

    Pakistan’s economic paradigm, according to the minister, is inherently faulty. “We enrich the wealthy,” he remarked.

    The finance minister also spoke about one-time Rs2,000 assistance for 14 million families. The amount will be distributed in June at a cost of Rs28 billion to the government.

    Aside from the 7.3 million BISP recipients, the package also covers 6.7 million households with poverty levels of less than 37.

    According to Miftah, the country’s industry and consumers are heavily reliant on imports, causing the current account to be in deficit. He went on to say that Pakistan’s economy focuses on import substitution rather than export development, a paradigm that has been replicated in a number of developing countries.

    Aside from textiles, Pakistan has no big exports because the agriculture sector is failing to remain productive.

  • Gold gains Rs2,800, reaching Rs142,000 per tola

    Gold gains Rs2,800, reaching Rs142,000 per tola

    Keeping in view the rates maintained by the All Sindh Sarafa Jewelers Association, the price of gold per tola jumped Rs2,800 in the local market on Monday, bringing it to Rs142,000.

    Today, at 4 pm, the precious yellow metal was trading at $1,854 per ounce on the international market.

    Pakistan, as a price-taker, follows the trend in the world market for gold and other precious metals. Gold and other precious metals, such as silver, are priced in ounces around the world.

    Chairman of the Pakistan Gems Jewelry Traders and Exporters Association (PGJTEA), Akhtar Tesori, said the gold jewellery market has suffered as gold prices have risen in the country.

    According to him, the country’s commodities prices have reached new highs in recent years due to devaluation of the local currency against the green back and increases in the price of international gold.

  • Plan under consideration to increase govt officials’ salaries by 5 to 15 per cent

    Plan under consideration to increase govt officials’ salaries by 5 to 15 per cent

    In an attempt to lessen the impact of inflation, the government is considering raising salaries by 5 to 15 per cent in the upcoming fiscal year’s budget, according to The News, following the Pay and Pension Commission’s inability to submit a report ahead of the next budget, which led to the prime minister’s decision to grant another extension.

    The deadline for submitting the Commission’s recommendation is being extended to June 30, 2022, as per a statement released by the Finance Division.

    According to top official sources, the former PTI-led government gave a 15 per cent allowance to officials in grades 1 to 19, effective March 1, 2022.

    The new Shehbaz Sharif-led administration, on the other hand, pledged a 10 per cent rise in the pension and a 25,000-per-month minimum wage.

    A Finance Ministry official stated that in the future budget, pay for grades 1 to 19 may be boosted by another 5-10 per cent as an adhoc allowance. Employees in grades 20 to 22 could see a pay raise of 10 per cent to 15 per cent.

    In addition, due to increased inflationary pressures, the government may boost pensions by 5-10 per cent. The Regulation Wing of the Ministry of Finance has completed its internal work in this regard. It was also resolved to form a Pay and Pension Commission, which would make recommendations.

    The commission was established by the PTI-led government in April 2020, and its chairman was former Secretary of Finance Abdul Wajid Rana. He resigned, however, and former bureaucrat Nargis Sethi was named Chairperson of the Pay and Pension Commission. She later quit as well.

    The Pay and Pension Commission was then chaired by Zafar Ahmed Khan, who was chosen by the government. So far, the commission has requested two extensions but has yet to present its recommendations.

    The text box was included in the Pay and Pension Commission’s terms of reference, which included studying the adequacy of the existing basic pay scale system and evaluating the current salaries of government employees.

    Read more: Petrol quota for ministers, govt officials in Sindh lowered by 40 per cent

    It also includes making recommendations for streamlining existing classification from BPS 1-22, studying the separation of existing basic pay scales for dedicated departments, occupations/cadres, reviewing special scales such as management grades, management position scales (MP Scales), special professional pay scales (SPPS); project pay scales, and proposing measures for uniformity and improvement, reviewing admissible regular allowances, special incentives, and all other supplementary pay scales.

    The panel was tasked with identifying current shortcomings in the Pension Scheme and making recommendations for a corrective revision along with ensuring the current model’s long-term viability and recommending a system with clear timelines that is more efficient and sustainable given the available resources.  

  • Govt approves 6 per cent hike in defence budget to mitigate impact of inflation

    Govt approves 6 per cent hike in defence budget to mitigate impact of inflation

    The government boosted the defence budget for the current fiscal year by nearly 6 per cent to more than Rs1.45 trillion on June 4 in order to cater the demands of the military services, along with increase in their salaries.

    As per a report from The Express Tribune, the Economic Coordination Committee (ECC) of the Cabinet okayed an additional Rs80 billion in auxiliary grants, bringing the total approved to Rs182 billion. The Ministry of Defence had requested an additional Rs80 billion for “critical shortfalls” in the defence budget, in addition to budget revisions for expenses on the Jinnah Naval Base, the Naval Base Turbat, and the multi-functional office building in the headquarters.

    Miftah Ismail, Federal Minister of Finance, chaired the ECC meeting, which endorsed a Rs80 billion supplementary budget for the armed forces, or the amount of total expenditures incurred. The ministry of finance projected that extra spending in fiscal year 2021-22, which ends on June 30, would be less than Rs80 billion.

    The National Assembly approved an Rs1.373 trillion defence budget for the present fiscal year in 2021. Keeping in view the increase in the spending ceiling, the next fiscal year’s defence budget could be greater than the previously estimated figure of more than Rs1.55 trillion.

    The Ministry of Defence received Rs153 billion in total, which is 11.8 per cent more in this fiscal year than in the previous year’s revised budget, which is identical to Pakistan’s average inflation rate. Defence spending will amount to 2.2 per cent of GDP, excluding armed forces development expenditures.

    The ECC also agreed to impose a 10 per cent regulatory duty on Chinese petrol imports in order to prevent abuse of bilateral free trade agreements. Some oil marketing companies rerouted their imports through China in order to avoid paying 10 per cent customs duty.

    For fiscal year (FY) 2021–22, the Pakistan government had decided a defence budget of Rs1.37 trillion (USD8.78 billion). The allocation represented a 6.2 per cent increase over the initial 2020–21 defence budget of Rs1.29 trillion.

    The defence budget represented approximately 16 per cent of the government’s total expenditure for 2021–22, and it was announced against the backdrop of Pakistan’s improving economy. Despite the Covid-19 pandemic, the country’s GDP is expected to rise by nearly 4 per cent in 2020–21.

    The majority of Pakistan’s defence budget goes to defence services, with a small portion going to defence administration. Employee-related expenses are the largest expenditure in the former appropriation, receiving Rs481.6 billion in 2021–22, a 1 per cent increase year on year.

    The graph below compares how much money the nation spent on defence:

    Here’s a comparison of the national and army budgets as it grows over time:

    The graph depicts how little Pakistan has spent on defence than India. Pakistan’s defence spending is not even close to India’s:

    As shown in the graph below, Pakistan is still among the countries that spend far less than others:

    The graph below demonstrates the average spending of the United States, Saudi Arabia, India, Iran, and Pakistan, which is significantly less than what Iran spends on each soldier:

  • Petrol quota for ministers, govt officials in Sindh lowered by 40 per cent

    Petrol quota for ministers, govt officials in Sindh lowered by 40 per cent

    Sindh Chief Minister (CM) Murad Ali Shah lowered the petrol allotment of ministers and government officials by 40 per cent this week as part of his moderation campaign following another spike in petroleum prices.

    Keeping in view a substantial spike in POL prices within the last few days, the decision was made to limit spending and decrease the strain on the national kitty.

    “The rise in petrol price should not be a burden on the exchequer,” Sindh CM Murad Ali Shah said, increasing the treasury’s load entails intensifying the burden on individuals.

    To meet the International Monetary Fund’s (IMF) conditions, the government has unleashed another big gasoline bomb on the country after another hike of Rs30. In less than a month, the price of petrol has risen by Rs60 to Rs209.86.

    The latest petrol price hike came just hours after the National Electric Power Regulatory Authority (NEPRA) approved a power tariff hike of Rs7.91 per unit.

    The price hike sparked riots in Karachi, with protesters wrecking a petrol pump and torching tyres on University Road. Despite expressing their dissatisfaction with the situation, the general public has requested that the government tightens its belt instead of putting the weight on the populace.

    Senator Mustafa Nawaz Khokar, a top PPP lawmaker, also shared this attitude, suggesting a 50 per cent wage cut for politicians, generals, judges, and senior bureaucrats.

    “Why should common folk shoulder the failures of the political, military and judicial elite? This joke has to end”.

    If the average citizen is compelled to narrow his belt, Khokar believes that politicians, generals, judges, and top bureaucrats’ income should be halved and all amenities, including free utilities, should be removed.

    The administration warned on June 2 that it would raise fuel prices by Rs30 for the second time in ten days, as an attempt to obtain the remaining funds from IMF.

  • Netizens want ‘tangas’ back on roads as petrol hits Rs209.86

    Netizens want ‘tangas’ back on roads as petrol hits Rs209.86

    To meet the International Monetary Fund’s (IMF) conditions, the government has unleashed another big gasoline bomb on the country after another hike of Rs30. In less than a month, the price of petrol has risen by Rs60 to Rs209.86.

    The latest petrol price hike came just hours after the National Electric Power Regulatory Authority (NEPRA) approved a power tariff hike of Rs7.91 per unit.

    In an attempt to save money, a large number of people rushed to nearby petrol pumps to fill up their tanks before midnight. Numerous two-wheelers, as well as sedans and full-fledged SUVs, formed long lines outside gas stations.

    Several traffic bottlenecks were observed in key areas of Lahore, Karachi and Islamabad due to long queues of automobiles.

    Netizens expressed their displeasure on social media platforms, alleging that petrol had become out of reach for the general public.

    Despite hefty price increases that would unleash a strong wave of inflation, Pakistan is still far from reaching an agreement with the IMF which requires a budget agreement for fiscal year 2022-23.

    Petrol now costs Rs209.86 per litre, high-speed diesel (HSD) costs Rs204.15, kerosene oil costs Rs181.94 and light diesel oil costs Rs178.31, thanks to the rise.

    The Finance Minister, Miftah Ismail went on to say that the government is holding talk with the IMF on a daily basis. “We cannot accede to all of their requests, but we must agree on certain aspects”.

    He insisted that the petroleum subsidy announced by former Prime Minister Imran Khan had to be rescinded to avoid financial losses.

    Journalist Kazmi Wajahat described the chaotic scene outside gas stations just before the higher rates went into effect at 12 am.

    The decision to remove the gasoline subsidy should have been made sooner, according to economists, who also warned that the worst is still to come.

    One-unit price of electricity has increased from Rs16.91 to Rs24.82 as a result of the new raise. The hike has been reported to the federal government by Nepra. According to a statement, the increased tariffs will take effect after the government issues its final notification. Recent hike in tariffs has been attributed to the rupee’s depreciation and increased oil prices on the foreign market.

  • Pakistan records 13.8 per cent inflation in May

    Pakistan records 13.8 per cent inflation in May

    The latest data provided by the Pakistan Bureau of Statistics (PBS) on June 1, inflation continued to rise in May 2022, with the Consumer Price Index (CPI)-based reading coming in at 13.8 per cent year on year, up from 13.4 per cent the previous month and 10.9 per cent in May 2021.

    In May 2022, inflation climbed by 0.44 per cent month over month, compared to 1.6 per cent the previous month and 0.1 per cent in May 2021. This brings average inflation in 11MFY22 to 11.29 per cent year over year, up from 8.83 per cent in 11MFY21.

    Rising prices have emerged as a major source of concern for the economy of the South Asian country, which is grappling with dwindling foreign exchange reserves and a growing import bill.

    The State Bank of Pakistan (SBP) hiked the main interest rate by 150 basis points to 13.75 per cent last month in an attempt to combat economic headwinds.

    The existing administration, on the other hand, has indicated that it will partially remove subsidies by raising petroleum product tariffs by Rs30 per liter, a move that is projected to raise inflation.

    As per a report from Brecorder, on a month-on-month basis, Inflation in Urban areas increased by 0.3 per cent in May 2022 as compared to an increase of 1.6per cent in the previous month and increase of 0.2per cent in May 2021.

    In the meantime, CPI inflation in urban areas grew 12.4 per cent year over year in May 2022, compared to 12.2 per cent the previous month and 10.8 per cent in May 2021.

    It climbed by 0.3 per cent month over month in May 2022, compared to a 1.6 per cent increase the previous month and a 0.2 per cent increase in May 2021.

    In rural areas, CPI inflation climbed by 15.9per cent year over year in May 2022, compared to 15.1 per cent the previous month and 10.9 per cent in May 2021. It climbed by 0.6 per cent month over month in May 2022, compared to an increase of 1.6 per cent the previous month and a fall of -0.03 per cent in May 2021.

    In May 2022, the SPI inflation grew by 14.1 per cent year over year, compared to 14.2 per cent a month earlier and 19.7 per cent in May 2021. On a month-over-month basis, it climbed by 0.6 per cent in May 2022, compared to 1.5 per cent a month earlier and 0.8 per cent in May 2021.

  • Inflation in France hits record-high since 1990s

    Inflation in France hits record-high since 1990s

    Preliminary EU-harmonised statistics indicated that inflation in France surged more than projected in May to a new high, putting additional pressure on President Emmanuel Macron before upcoming legislative elections.

    Consumer prices rose 0.7 per cent in May, for a 12-month inflation rate of 5.8 per cent, up from 5.4 per cent in the last month and the highest rate since France started working on European Union methodology to generate the numbers in the early 1990s, as per the INSEE statistics.

    Inflation was predicted to grow to 5.6 per cent on average, considering a poll of eight economists in a report by Reuters.

    High inflation is at the top of France’s political agenda, and following the elections, Macron’s government has promised a new wave of measures to protect buying power.

    Apart from Malta, France has managed to maintain the inflation lower than the rest of the EU due to a 25 billion euro package of measures that includes, among other things, hefty price limits on gas and electricity.

    Annual inflation in France, as measured by the national consumer price index, climbed to 5.2 per cent in May from 4.8 per cent in April, reaching its highest level since September 1985, according to INSEE.

    This month, economists surveyed by Reuters projected an average growth rate of 5.0 per cent. In France, the national index is regularly monitored, whilst outside the country, the EU-harmonised index is used to assess inflation rates among euro-area nations.