Business

Minister warns of further hike in electricity, gas tariffs in Jan

Published

1 year ago

Farwa

Finance minister says urgent action needed to curtail circular debt.
Islamabad hopeful of unlocking forex inflows after IMF review.
Says IMF to grant approval for second tranche within a month.

ISLAMABAD: It seems there will be no respite for the masses from high electricity and gas tariffs as interim Finance Minister Dr Shamshad Akhtar has said that the caretaker government plans to hike the prices of these utilities in January to curtail the circular debt issue, reported The News on Friday.

Addressing a press conference at the Q Block on Thursday, the federal minister said that under the International Monetary Fund’s (IMF) Stand-By Arrangement (SBA) the government has agreed to cut down the costs in the energy sector and restore efficiency.

“The circular debt of the power and gas sectors has crossed 4% of Gross Domestic Product. Urgent action is needed to bring it down. We have started work in this regard and electricity and gas rates have been adjusted accordingly,” she added.

Sharing more details about her talks with IMF, the finance minister said that she had informed the global lender about tariff revisions in the energy sector and the intention to impose extra taxes on various sectors, including real estate and retailers. However, she clarified that no final decision has been taken as of yet.

“Pakistan requires a fresh short-term IMF programme as the country cannot run without it keeping in view of the fragile macroeconomic stability,” Dr Akhtar said. She added that Islamabad would have to go for another medium-term programme probably under Extended Fund Facility (EFF) once the SBA ends.

On the question of the external financing gap, Finance Secretary Imdad Bosal was hopeful that the successful IMF review would unlock programme and project loans from multilateral lenders, including the World Bank (WB), Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), and Islamic Development Bank (IsDB). He hoped that a reduction in the current account deficit would scale down the external financing requirement.

“There is no gap on the external financing front as processing of the programme loans from WB and ADB as well as co-financing from AIIB were at advanced stages and would now be approved in December this year,” he added.

The secretary added Islamabad was expecting Pakistan’s ratings to improve after the review which would help the government generate the desired dollar inflows in the shape of foreign loans.

The finance minister said the World Bank was expected to disburse $2 billion in loans during the current fiscal year. The foreign exchange reserves, she said, would build up next month after approval for $700 million tranche from the IMF, so the total disbursement would go up to $1.9 billion out of $3 billion under the SBA.

Dr Akhtar said the IMF’s Executive Board is expected to grant approval for the second tranche within a month.

‘Caretaker govt building market confidence’

Meanwhile, speaking at The Future Summit in Karachi, Dr Shamshad Akhtar said the caretaker government has taken a lot of proactive measures to stabilise the economy and build market confidence.

At the core of the government stabilisation efforts is the $3 billion SBA programme approved which led to an initial disbursement of $1.2 billion by the IMF, she added.

While talking about the Special Investment Facilitation Council (SIFC), the finance czar said a transaction pipeline has been established to accelerate investments in critical infrastructure, encompassing projects such as the $10 billion Saudi Aramco Refinery.

“The transaction pipeline also incorporates leasing of 85,000 acres of agricultural corporate farms to potential foreign investors,” she added.

About structural weaknesses of state owned enterprises (SOEs) and reducing the drain on the budget, she said the caretaker government is focused on activating the Centralised Monitoring Unit (CMU), which will monitor the SOEs and publish regular reports on financial performance and contingent liabilities.

“We are in the process of finalising a SOE policy under the SOE law as agreed with the IMF. The focus of policy is on improving governance and financial efficiency of loss-making SOEs,” she said.

Business

With its second-largest surge ever, PSX approaches 114,000 points.

Published

6 hours ago

Farwa

Driven by renewed activity from both private and government financial institutions, the Pakistan Stock Exchange (PSX) saw its second-largest rally in history on Monday.

The market regained many important levels in a single trading session as it rose with previously unheard-of momentum.

Intraday trading saw a top increase of 4,676 points, and the PSX’s benchmark KSE-100 Index gained 4,411 points to settle at 113,924 points. This impressive rebound demonstrated significant investor confidence by reestablishing the 100,000, 111,000, 112,000, and 113,000-point levels.

The market also saw the 114,000-point limit reestablished during the trading session.

The positive tendency was reflected when the market’s heavyweight shares touched its upper circuits. Among the most busiest trading sessions in recent memory, an astounding 85.78 billion shares worth a total of Rs55 billion were exchanged.

Experts credited the spike to heightened institutional investor activity and hope for macroeconomic recovery. Considered a major market recovery, the rally demonstrated the market’s tenacity and development potential.

Business

In interbank trade, the Pakistani rupee beats the US dollar.

Published

1 week ago

Farwa

In the international exchange market, the US dollar has continued to weaken in relation to the Pakistani rupee.

The dollar fell to Rs278.10 from Rs278.17 at the beginning of interbank trading, according to currency dealers, a seven paisa loss.

In the meantime, there was a lot of turbulence in the stock market, but it recovered and moved into the positive zone. The KSE-100 index recovered momentum and reached 116,000 points after soaring 1,300 points.

Both currency and stock market swings, according to analysts, are a reflection of ongoing market adjustments and economic uncertainty.

Business

Phase II of CPEC: China-Pakistan Partnership Enters a New Era

Published

1 week ago

Farwa

The cornerstone of economic cooperation between the two brothers and all-weather friends is still the China-Pakistan Economic Corridor, the initiative’s flagship project.

In contrast to reports of a slowdown, recent events indicate a renewed vigour and strategic emphasis on pushing the second phase of CPEC, known as CPEC Phase-2, according to the Ministry of Planning, Development, and Special Initiatives.

According to the statement, this crucial stage seeks to reshape the foundation of bilateral ties via increased cooperation, cutting-edge technology transfer, and revolutionary socioeconomic initiatives.

Planning Minister Ahsan Iqbal is leading Pakistan’s participation in a number of high-profile gatherings in China, such as the 3rd Forum on China-Indian Ocean Region Development Cooperation in Kunming and the High-Level Seminar on CPEC-2 in Beijing.

His involvement demonstrates Pakistan’s commitment to reviving CPEC, resolving outstanding concerns, and developing a strong phase-2 roadmap that considers both countries’ long-term prosperity.

At the core of these interactions is China’s steadfast determination to turn CPEC into a strategic alliance that promotes development, progress, and connectivity.

Instead of being marginalised, CPEC is developing into a multifaceted framework with five main thematic corridors: the Opening-Up/Regional Connectivity Corridor, the Innovation Corridor, the Green Corridor, the Growth Corridor, and the Livelihood-Enhancing Corridor.

With the help of projects like these, the two countries will fortify their partnership, and CPEC phase-2 will become a model of global economic integration and collaboration that benefits not just China and Pakistan but the entire region.