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Businessmen upbeat about army chief’s resolve to revive economy

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  • FPCCI president calls meeting with army chief a breath of fresh air.
  • $25bn investment discussed with Saudi Arabia, COAS Munir tells business community. 
  • Government would not go full-fledge for privatisation, he adds.

KARACHI: As the country is faced with a serious economic crisis, Chief of Army Staff (COAS) General Syed Asim Munir told the business community that all-out efforts will be made to bring foreign investment to the country and revive the economy, The News reported Tuesday.

The army chief gave these assurances in one of his recent detailed meetings with the traders where he spoke with the business community candidly. 

Speaking in the Geo News programme “Aaj ShahzebKhanzada Kay Sath” on Monday, Federation of Pakistan Chambers of Commerce & Industry (FPCCI) President Irfan Iqbal Sheikh said that the meeting with the army chief is a breath of fresh air. 

He said the army chief told them that a $25 billion investment had been discussed with Saudi Arabia, which had assured Pakistan of investment in IT, minerals, agriculture and defence. 

COAS Munir told the business community that Saudi Crown Prince Mohammad Bin Salman had agreed that of the $25 billion, $10 billion would be kept in the State Bank of Pakistan (SBP). This will be returned in the form of the Pakistani rupee or goods so that the foreign exchange could increase.

The army chief said that the crown prince has identified bureaucracy obstacles to investment and called for removing them, adding that they have Special Investment Facilitation Council (SIFC) to do away with the bureaucratic hurdles.

Now nobody could disturb them, nor any bureaucrats could undermine them nor would they face any problems with courts. He said the army chief told the business community that Saudi Arabia and the United Arab Emirates (UAE) had held out the assurance that each would invest $25 billion, while $25 billion each would come from Qatar and Kuwait.

Sheikh said that Gen Munir had vowed that the land-grabbing mafia and the extortion mafia would be reined in to control corruption, adding that four task forces are being constituted on the Federal Board of Revenue of Pakistan (FBR), border control, smuggling and social media to improve the situation. 

FPCCI president also stressed that the business community had become disappointed but the army chief had given it courage and hope.

Meanwhile, Business Group Chairman Zubair Motiwala said that every new chief holds meetings with traders. 

Welcoming the meeting, Motiwala said that the body language of the army chief was different this time as compared to the traders’ meetings held with his predecessors. He added that Gen Munir went to Saudi Arabia and the UAE for the revival of the economy, and now he plans to go to Qatar and Kuwait.

Motiwala said COAS Munir directed the corps commander that not a single litre of Iranian diesel should come to Karachi while he also issued directives for retaking encroached lands, ending corruption and improving law and order.

The COAS also said that only registered Afghan refugees can live in Pakistan and the rest of them will have to go back to their country, adding that Saudi’s crown prince complained about corruption and bureaucracy in Pakistan.

Motiwala said they discussed the charter of the economy with the army chief, hoping that such a huge investment would bring improvement to the economic conditions in the country. 

He said they drew the attention of the army chief towards the need for investment.

The business community also told Gen Munir that Rs1,300 billion is going to waste due to state-owned enterprises, stressing that political governments cannot opt for privatisation, he added. 

The army chief said he realised that the government would not go full-fledge for privatisation and would get rid of the burden at all costs.

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Positive IMF negotiations propel KSE-100 Index above 94,000 points

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As a result of investors’ optimism about the reported progress in the continuing talks with the International Monetary Fund (IMF), the Pakistan Stock Exchange (PSX) experienced a robust surge.

The benchmark KSE-100 Index of the PSX, which tracks market sentiment, rose 713 points to a new record high of 94,068 points, breaking above the 94,000-point barrier, as the trading session began.

Early in the day, the stock market began its upward trajectory as the KSE-100 Index steadily rose, gaining 574 points to reach 93,932 points. A possible agreement with the International Monetary Fund (IMF) might lead to more fiscal stability and back Pakistan’s economic reforms, which is why investors are so optimistic about the country’s future.

Officials from the Federal Board of Revenue (FBR) informed the International Monetary Fund (IMF) on Wednesday that the government would not be introducing a mini-budget and would instead continue to aim to collect Rs12,970 billion in taxes each year.

In line with continuing discussions with the Fund, FBR sources revealed that petroleum goods will not be subject to the General Sales Tax (GST).

The fact that Pakistan’s tax-to-GDP ratio has increased from 8.8% to 10.3%, a 1.5% gain viewed as a favorable sign of Pakistan’s fiscal policies, has reportedly pleased the IMF, who has voiced satisfaction at Pakistan’s recent economic performance.

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Provinces must inform IMF team of the postponed legislation for 45% agricultural tax.

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The visiting International Monetary Fund (IMF) delegation is scheduled to meet with provincial government leaders today to examine progress in implementing a tax on agricultural income of up to 45% and discuss the execution of other fiscal policies.

The agricultural income tax was to go into effect on January 1, 2025, after the provincial governments were given until October 31 to pass the necessary legislation. Nevertheless, the deadline was missed by every single province.

Rumor has it that neither Sindh nor Balochistan have moved forward with the tax on agricultural income bill, despite approval from the Punjab government and a draft being developed in Khyber Pakhtunkhwa.

All four provinces have signed the National Fiscal Pact as per the conditions set by the IMF. The reason(s) for the delays will be explained to the IMF delegation.

Federal spending on things like healthcare, social security, and regional infrastructure development is expected to be transferred to the provinces under the IMF agreement, according to sources from the Ministry of Finance. Provincial governments have been singled out by the IMF delegation as key players in tax and economic reform efforts.

Reviewed Here: FBR Excludes Mini-Budget and GST on Petrol from IMF Negotiations

The provincial budget surplus targets will also be briefed to the IMF delegation, according to the sources. The four provinces were supposed to achieve a total surplus of Rs342 billion in the first quarter, but they only managed to manage Rs182 billion. A large portion of the deficit was caused by the Rs160 billion budget deficit in Punjab.

The government’s pledge to retain the annual tax target of Rs12,970 billion was reaffirmed by the Federal Board of Revenue (FBR) on Wednesday, who also confirmed that no mini-budget will be implemented.

In line with continuing discussions with the IMF, FBR sources have also said that petroleum goods will not be subject to the General Sales Tax (GST).

According to sources, the International Monetary Fund has voiced its approval of Pakistan’s recent economic performance, highlighting the country’s improved fiscal policies, which have led to a 1.5% increase in the tax-to-GDP ratio, from 8.8% to 10.3%.

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Petrol prices are expected to experience another increase in Pakistan.

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The inflation-affected nation is expected to encounter another increase in petrol prices, with recommendations indicating a rise of Rs. 2.58 per litre for petrol and Rs. 5.91 per litre for high-speed diesel.

Sources indicate that, if sanctioned, petrol prices will ascend to Rs. 250.96 per litre, whereas high-speed diesel will be priced at Rs. 261.05 per litre.

Sources indicated that the suggested increase is due to the elevated premium on petroleum products in the worldwide market and rising import expenses.

The premium on imported petroleum products has increased, leading the government to contemplate pricing modifications effective November 16, sources indicated.

On October 31, the federal government published the prices of petroleum products for the upcoming fortnight, increasing the prices of petrol and high-speed diesel.

A notification announced an increase in petrol price by Rs 1.35, raising it to Rs 248.38 a litre. The price of high-speed diesel was fixed at Rs 255.14 per litre after an increase of Rs 3.85.

Also read: Pakistan’s weekly inflation jumps to 15.02pc

Simultaneously, the costs of light diesel and kerosene oil were reduced. The statement states that kerosene oil is priced at Rs 148.5 per litre following a reduction of Rs 4.92.

The cost of light fuel was reduced by Rs 2.61 to Rs 147.51 per litre.

The rampant hike in the prices came at the time when the weekly inflation, measured by the Sensitive Price Indicator (SPI), witnessed an increase of 0.28 percent for the combined consumption groups during the week ended on October 17, the Pakistan Bureau of Statistics (PBS) reported.

According to the PBS data, the SPI for the week under review in the above-mentioned group was recorded at 319.79 points as compared to 318.91 points during the past week.

In comparison to the same week last year, the SPI for the combined consumption group during the reviewed week experienced a 15.02 percent increase.

The weekly SPI with the base year 2015-16 =100 covers 17 urban centres and 51 essential items for all expenditure groups.

Likewise, SPI for the lowest consumption group of up to Rs 17,732 witnessed increase of 0.27 percent and went up to 313.74 points from last week’s 312.91 points.

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