Current Final

Category: Business

  • Pakistan aiming for $25 billion textile exports in this fiscal year

    Pakistan aiming for $25 billion textile exports in this fiscal year

    Dr Gohar Ejaz, the Caretaker Federal Minister for Commerce, Industries, and Production, has set a bigger target of achieving $25 billion in textile exports for the current fiscal year, a substantial increase from the $16 billion target of the previous year. 

    Speaking at a meeting with the Pakistan Textile Exporters Association, led by Khurram Mukhtiar, Dr Ejaz outlined his strategic vision. He pledged to revitalise dormant industries within the nation within a tight one-month deadline, expressing confidence in surpassing last year’s export figure of $16 billion.

    Assuming the role with a bold $80 billion export objective, Dr Ejaz assured a systematic approach to address impediments hampering industrial operations. He expressed eagerness to directly engage with stakeholders, even offering to visit facilities as a symbol of his dedication to the industrial landscape’s rejuvenation. He requested a comprehensive list of inactive industries and their specific challenges to better tackle the issues.

    Furthermore, the minister vowed to promptly resolve pending financial obligations owed to industries by various departments, including the Federal Board of Revenue (FBR) and customs. 

    He extended an open invitation to associations and business leaders, emphasising his readiness to collaborate and find solutions for their concerns.

    With a focus on swift resolutions for challenges related to gas, electricity, energy, and fund allocation, Dr Ejaz reaffirmed his commitment to fostering a thriving and supportive business environment.

  • Economic situation worse than expected, subsidies not feasible: Finance Minister

    Economic situation worse than expected, subsidies not feasible: Finance Minister

    In the midst of Pakistan’s ongoing battle with rising prices, the country’s interim Finance Minister, Shamshad Akhtar, issued a strong warning on Wednesday. She pointed out that Pakistan’s economic situation is even “worse” than expected, and the government can’t afford to provide subsidies to the public due to financial constraints.

    According to DAWN, Akhtar made these comments during a meeting of the Senate’s Standing Committee on Finance. She explained that the current government had inherited a programme from the International Monetary Fund (IMF) that couldn’t be changed.

    This announcement comes at a time when Pakistan is facing high living costs, especially expensive electricity bills that have led to protests across the country.

    The government has struggled to find ways to help while also maintaining good relations with the IMF. The caretaker government, which is temporarily in charge, hasn’t been able to come up with clear solutions to ease the situation.

    In a recent meeting chaired by Caretaker Prime Minister Anwaar ul Haq Kakar, the government expressed that it’s not sure how to solve the issue. They even discussed the possibility of letting people pay their electricity bills in smaller portions over time, but this would need permission from the IMF.

    Interim Information Minister Murtaza Solangi mentioned that discussions are ongoing with the IMF to find relief measures for people struggling with high electricity bills. An official announcement about this is expected soon.

    However, it’s important to note that even if the option of paying bills in smaller portions is pursued, it still needs approval from the IMF. This underscores the IMF’s influence on Pakistan’s economic decisions.

    Minister Akhtar, while speaking to the Senate’s Standing Committee on Finance, highlighted the substantial losses faced by government institutions. She stressed the need to sell off some government-owned assets to alleviate financial pressure. Currently, a large portion of Pakistan’s tax earnings goes toward repaying debt. Moreover, the Pakistani rupee is facing challenges due to a shortage of dollars coming in and a high amount going out of the country.

    Akhtar also expressed concern that if Pakistan doesn’t follow the IMF’s agreement, the country might stop receiving dollars, leading to an even worse economic situation. She admitted that the government has taken actions that weakened the economy. She mentioned that the Federal Board of Revenue is not collecting as much as it should while expenses remain high.

    The finance minister clarified that the caretaker government doesn’t have unlimited power. They are restricted in their actions and must work within those limits.

    She also pointed out that any changes to the existing IMF agreement, made by the previous government, are not possible for the current administration. She mentioned that the government is considering reducing benefits for the wealthy, and a detailed update on the economy will be provided to the committee within a week.

    Before the finance minister’s comprehensive briefing, several committee members expressed concerns about the rising value of the dollar and the high electricity bills. Senator Kamil Ali Agha insisted that taxes added to electricity bills should be removed immediately, arguing that the entire country shouldn’t suffer due to a few people’s actions.

  • Pakistani rupee hits new all-time low of Rs304.445 after declining by Rs1.38 against US dollar

    Pakistani rupee hits new all-time low of Rs304.445 after declining by Rs1.38 against US dollar

    In the interbank session held on Wednesday, the Pakistani rupee (PKR) exhibited a decline of 1.39 rupees against the US dollar (USD). The closing exchange rate for the day stood at Rs304.445 per USD, in contrast to the concluding rate of Rs303.052 per USD observed in the preceding session.

    Throughout the trading day, the currency displayed a fluctuation, reaching an intraday high bid of Rs304.75 while also touching a low ask of Rs304.6.

    On a parallel note, within the open market, Exchange Companies set the buying rate for the dollar at Rs320 and the selling rate at Rs323.

    In the ongoing fiscal year, the Pakistani rupee has experienced a depreciation of 18.45 rupees against the dollar, amounting to a 6.06 per cent decrease. Concurrently, within the current calendar year, the PKR has depreciated by 78.01 rupees, reflecting a substantial decline of 25.63 per cent.

  • No relief in electricity bills without IMF’s approval

    No relief in electricity bills without IMF’s approval

    After country-wide protests against unprecedented hikes in electricity bills, Pakistan’s caretaker government has approached the International Monetary Fund (IMF) to seek approval before announcing any relief for the people.

    According to Geo News, the IMF asked Pakistan to share a written plan for relief on Wednesday.

    On Tuesday, the federal cabinet had a meeting with interim Prime Minister Anwaarul Haq Kakar to take into consideration all possible options but no decision was officially announced.

    The Power Division has shared proposals with the authorities but first, the IMF is to be taken on board as loans from the Fund bear strict conditions.

    In July, a $3 billion loan agreement was signed with the IMF with stringent financial regulations to be followed during the programme.

    Under the bailout package, the former government of Pakistan Democratic Movement (PDM) approved a stark increase in electricity rates, resulting in increased bills.

    As reported by Geo News, Finance Minister Shamshad Akhtar had a virtual meeting with IMF representative Esther Perez to discuss relief measures.

    They were made aware of the current situation and continuing protests across the country.

    While the Pakistan team submitted various proposals for relief in electricity bills, IMF officials requested the relief plan in writing which, according to Geo, will be shared today.

  • Pakistan to import 100,000 tonnes of sugar from Brazil due to high prices, shortage

    Pakistan to import 100,000 tonnes of sugar from Brazil due to high prices, shortage

    With the price of sugar skyrocketing in the market, aided by the exploitative practices of the sugar mill cartel, and the commodity facing scarcity, a decision has been reached to import 100,000 metric tonnes of sugar from Brazil.

    The Trading Corporation of Pakistan has formally communicated its intention to procure sugar from the South American nation. This comes as a reversal of trends, considering that sugar had been exported back in June; however, preparations are now underway for its import in September.

    Nevertheless, there are concerns that the price of sugar might surge further in the market following its import. It is anticipated that sugar could reach a staggering Rs200 per kilogramme.

    Insider sources have disclosed that the country is grappling with a significant shortage of sugar after its previous export. In November 2022, sugar was priced at Rs91, but following its export, the price catapulted to Rs180. The impending import of 100,000 metric tonnes is feared to exacerbate the price increase.

    Speaking on the issue, Food Secretary Zaman Wattoo revealed that the recent surge in sugar prices has collectively burdened the masses with an additional cost of Rs47 billion.

    Meanwhile, the price of sugar persistently climbs, now touching the Rs170 per kilogramme mark in the retail sector. Over a span of just four days, the price has gradually escalated by Rs10 per kilogramme.

    At the wholesale level, sugar is valued at Rs16,400 per 100 kilogrammes. Different sugar mills are offering rates ranging from Rs15,800 to Rs16,600 per 100 kilogrammes.

    According to Samaa, despite the ongoing dynamics, there is still no officially defined market rate for sugar, leaving room for potential further spikes in pricing. Furthermore, considering the current market conditions, the export of sugar has been placed under a temporary prohibition.

  • IMF demands detailed electricity bill relief plan from Pakistan amid nationwide unrest

    IMF demands detailed electricity bill relief plan from Pakistan amid nationwide unrest

    The International Monetary Fund (IMF) has asked Pakistan to provide a written plan for relief in electricity bills amidst ongoing nationwide protests. 

    The caretaker government’s decision to seek approval from the IMF before announcing any consumer relief led to a federal cabinet meeting on Tuesday, chaired by interim Prime Minister Anwaarul Haq Kakar. 

    Despite discussing options, the meeting concluded without unveiling any measures. The Power Division had shared proposals with authorities, but the strict conditions of the IMF loan necessitated involving the lender first. 

    Pakistan’s $3 billion loan agreement with the IMF in July involved adhering to stringent financial discipline. The current surge in electricity rates, approved by the previous government, is reflected in bills. 

    According to Geo, Finance Minister Shamshad Akhtar held a virtual meeting with IMF representative Esther Perez, discussing relief measures and the ongoing protests. While the Pakistani team submitted various relief proposals, the IMF officials requested a written plan, expected to be shared soon. 

    Additionally, the Federal Board of Revenue (FBR) engaged with the IMF on tax collection in July, with plans for further discussions in the coming days. 

  • Toyota resumes production after system malfunction halts operations 

    Toyota resumes production after system malfunction halts operations 

    Toyota Motor is set to resume production at its assembly plants in Japan on Wednesday after a recent system malfunction forced a halt in domestic production. The disruption not only affected the world’s largest-selling automaker but also caused disruptions across its supply chain.

    Toyota’s plans to restart operations across 25 production lines in twelve plants within its home market are scheduled to begin on Wednesday morning. The last two plants will come back online in the afternoon.

    The automaker is currently investigating the root cause of the system failure, which prevented Toyota from procuring the necessary components for its production.

    This setback impacted approximately one-third of Toyota’s global production capacity. Toyota’s domestic production was in the process of recovering from output cuts attributed to semiconductor shortages.

    Toyota experienced a 29 per cent increase in output during the first half of the year, marking its first such growth in two years.

    Industry experts have pointed out the challenge Toyota faces in making up for the production loss due to the system outage. One potential strategy could be running extra shifts, although the automaker was already operating at full capacity.

    The system failure also had a cascading impact on other companies within the Toyota Group. Toyota Industries, a group firm, reported partial suspension of operations at two engine plants due to the automaker’s system glitch.

    This incident shed light on Toyota’s reliance on just-in-time inventory management, which aims to minimize costs but leaves the company vulnerable to supply chain disruptions.

    While the exact cause of the malfunction is still being investigated, it underscores the sensitivity of modern manufacturing processes to unforeseen interruptions.

    The broader context in Japan includes reports of harassing phone calls received by businesses and government offices, possibly due to geopolitical factors. These calls have been linked to China and the decision to release treated radioactive water from the damaged Fukushima nuclear power plant into the Pacific Ocean.

  • Pakistani rupee plunges to fresh record low of Rs303 against US Dollar

    Pakistani rupee plunges to fresh record low of Rs303 against US Dollar

    In a worrisome turn of events, the Pakistani rupee has continued its steady descent, hitting a new record low against the US dollar and raising concerns among economic analysts and policymakers. The local currency settled at Rs303.05 in the inter-bank market on Tuesday, marking a significant drop from its previous standing.

    According to the State Bank of Pakistan (SBP), the rupee experienced a decline of Rs1.05 or 0.35 per cent by the time the market closed on Tuesday. This decline follows closely on the heels of Monday’s record low, where the rupee closed at Rs302 against the US dollar.

    This decline is followed by the recent agreement secured with the International Monetary Fund (IMF). While this arrangement was expected to bring some stability to the currency, the rupee has instead faced renewed pressure.

    Falling foreign exchange inflows have posed a challenge, causing unease among financial circles. Moreover, apprehensions have grown due to a widening current account deficit, a situation exacerbated by the lifting of import restrictions by authorities.

    The international scene has also played a part in this precarious situation. On the global stage, the US dollar showed signs of hesitancy on Tuesday, as traders demonstrated caution by refraining from significant bets ahead of a series of anticipated economic data releases throughout the week. Meanwhile, the Japanese yen found itself grappling with levels that had triggered intervention in the past year.

    With multiple factors at play, including IMF negotiations, foreign exchange dynamics, and global economic trends, the coming days will likely prove crucial in determining the rupee’s trajectory and Pakistan’s economic landscape.

  • Installment plans introduced for power consumers struggling with full bill payments

    Installment plans introduced for power consumers struggling with full bill payments

    In a strategic move aimed at addressing the protests triggered by soaring electricity bills and alleviating the burden on citizens, Dr Muhammad Amjad Khan, Chief Executive of the Islamabad Electric Supply Company (IESCO), has issued a comprehensive directive. This directive mandates all IESCO offices to introduce installment plans tailored to assist customers who are facing challenges in paying their electricity bills in full.

    Against the backdrop of mounting public outcry, Dr Khan’s proactive step aims to alleviate the financial burden on power consumers. These installment plans are envisioned to provide customers with a respite, allowing them to manage their electricity bill payments more effectively while maintaining their financial stability.

    To further enhance customer convenience, IESCO has also taken the initiative to extend the due dates for electricity bill payments. This calculated move underscores the company’s commitment to accommodating the unique challenges faced by its customers.

    Dr Amjad Khan underscored the importance of open communication, urging IESCO’s patrons to engage with the relevant Sub-Divisional Offices, Revenue Offices, or Customer Service Centers for any concerns related to their bills. This approach underscores IESCO’s dedication to ensuring customer satisfaction and resolving any uncertainties promptly.

    Nevertheless, this considerate move coincides with ongoing protests across the nation, ignited by grievances against inflated electricity bills. Demonstrators, who have congregated outside the IESCO office in Rawalpindi for the past four days, have now rallied in various cities, including Sargodha, Hafizabad, Vehari, and Hyderabad.

    In response to the heightened tensions, IESCO officials have taken precautions by involving the local police to bolster security measures. This step is aimed at safeguarding the well-being of both the demonstrators and IESCO’s employees.

    The protestors have been resolute in their demands, seeking a reduction in the substantial charges or even pledging to withhold bill payments until their concerns are heard. These demonstrations, set against a backdrop of broader economic challenges and escalating inflation, reflect the mounting frustrations of citizens grappling with financial hardships.

    The protestors hail from diverse backgrounds, encompassing members of civil society, men and women alike, traders, farmers, and representatives from legal and business sectors. This broad participation underscores the pervasive concern and unified front against economic difficulties and price hikes.

    As electricity prices continue their upward trajectory and taxes weigh heavily on citizens, these widespread demonstrations emphasise the pressing need to address economic grievances.

  • High interest rates and taxes lead to 20.90% drop in car financing in Pakistan

    High interest rates and taxes lead to 20.90% drop in car financing in Pakistan

    In a notable shift, the landscape of automobile financing in Pakistan has undergone a substantial transformation, with figures from the State Bank of Pakistan (SBP) indicating a significant decline. The data, released by SBP, unveils a marked decrease in car financing, plummeting to Rs285.19 billion in July 2023. This represents a notable 20.90 per cent year-on-year (YoY) decrease and a 2.91 per cent month-on-month (MoM) decrease when compared to the figures from July 2022, which stood at Rs360.55 billion, and June 2023, which registered at Rs293.73 billion.

    The primary contributors to this downward trajectory are multi-faceted. Firstly, the imposition of higher interest rates has played a pivotal role in reshaping the car financing landscape. Additionally, the surge in car prices has also contributed significantly to this downturn. Moreover, regulatory restrictions governing the acquisition of loans have created a notable barrier, further impacting the market. Furthermore, the imposition of elevated taxes on the import of automobiles and their integral parts has compounded the challenges faced by the automobile financing sector.

    Contrastingly, in a separate but related sphere, consumer financing for house building displayed a contrasting narrative. SBP’s data reveals that by the conclusion of July 2023, consumer financing for house building registered at Rs211.11 billion, marking a commendable 4.82 per cent YoY increase. According to Mettis Global, this uptick can largely be attributed to SBP’s proactive measures to stimulate the housing and construction sector within the nation. However, in terms of monthly changes, the figures remained relatively static, with a minor decline of 0.57 per cent.

    Meanwhile, financing for personal use, amounting to Rs250.24 billion, experienced a marginal 0.09 per cent YoY decrease. Similarly, on a monthly basis, financing within this category saw a slight downturn of 0.95 per cent. Consequently, the cumulative credit extended to consumers in various segments reached Rs851.22 billion during the assessment month. This overall credit value reflected a notable 4.70 per cent YoY decline and a 0.99 per cent MoM reduction.

    Furthermore, the credit scenario within the private sector depicted a nuanced picture. Outstanding credit to the private sector encountered a minor 0.06 per cent YoY decrease and a slightly more pronounced 1.12 per cent MoM reduction, resting at Rs8.19 trillion in July 2023. In contrast, loans granted to the manufacturing sector exhibited an encouraging 1.12 per cent YoY increase, amounting to Rs4.48 trillion during the review period. However, on a monthly scale, the loans within the manufacturing sector dipped by 1.44 per cent MoM.

    In summation, the marked decline in car financing, as evidenced by SBP’s recent data, underscores the multifaceted challenges that the automobile financing sector in Pakistan is currently grappling with. While interest rates, car prices, and regulatory curbs have contributed to this downward trend, other sectors such as house building and manufacturing loans have demonstrated distinct trajectories. As the nation navigates through these financial dynamics, stakeholders remain vigilant in monitoring and adapting to these evolving circumstances.