*1/n Pakistan’s Economy Shows Momentum as Virus Cases Taper Off*
By Faseeh Mangi
_Covid-19 worries dim as cases drop, 96% patients recovered_
_Cement sales rise close to record, gasoline at all-time high_
2/n Pakistan is showing signs of business activity picking up at a faster clip, as worries about new coronavirus infections fade in an economy that contracted for the first time in seven decades.
3/n Evidence of momentum returning can be seen from growing cement-to-fuel sales and demand for home appliances to cars. That’s happening even as Pakistan added fewer than 2.9k cases last week compared with 35k cases in a week in June, and 96% of the total 300k infected recovered
4/n
“It has surprised everybody,” said Muzzammil Aslam, chief executive officer at Tangent Capital Advisors Pvt., who expects economic expansion at 4%-5% in the year started July, higher than the government’s 2.1% target. “The growth is led by an aggregate demand push.”
5/n Here’s a look at sectors where activity is ticking and why:
Construction Boom
Cement sales rose 38% from a year ago to 4.8 million tons in July, and near a record level seen in October.
6/n A government program to give amnesty to tax evaders, provided they fund construction projects, is expected to fuel activity -- and demand for cement -- as work resumes after the lockdown.
7/n “We expect dispatches to continue their rising run because of tax measures,” said Saad Khan, at IGI Securities Ltd. “Substantial decline in interest rates & mandatory targets given for banks to increase housing & construction financing to at least 5% of private sector credit”
8/n Cement sales eased to 3.5 million tons in August, mainly because of torrential rains across the country.
Fuel Sales
Gasoline sales in June rose to a record high as people return to work after lockdown measures eased in May, according to A. A. H.
9/n Soomro, managing director at KASB Securities Pvt. Sales have stayed elevated in July and August.
Fuel for power generation has increased as well. Fuel oil sales rose in June to the highest in a year while LNG spot cargo purchase resumed in June after a six-month hiatus.
10/n Car Sales
Local car deliveries have recovered to about 10,000 units after four months as the end of lockdown ushered in new demand.
Kia Motors Corp.’s local unit is planning to add a second shift at its factory in Karachi from January.
11/n Manufacturing
output improved for a second consecutive month in June. The overall recovery in large-scale manufacturing will likely be stronger in the October-to-December quarter with worldwide demand picking up, said Khaqan Najeeb, a former adviser to finance ministry.
12/12 Home appliances are also seeing “robust demand,” said Haroon Ahmad Khan, chief executive officer at Waves Singer Pakistan Ltd.
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•The country current account has corrected massively since February
•This is despite huge build up in energy price imports and commodity prices in general
•Importantly, non-oil current account balance is now in surplus (1/n)
As per SBP, the CAD came in at $1.02bn in March, up from $519mn in February
•The increase in March CAD mainly due to repatriation of CPEC related energy payments roughly by $300mn
•Important to note, the country is riding on all time high monthly and yearly exports (2/n)
•Exports gone pass US$3b billion in March first time in the history and reported a growth of 27% to US$23.6 billion in first nine months of current fiscal year
•Exports of services is another silver lining in PTI term (3/n)
Finance Supplementary Bill, 2021 laid in Parliament. The bill is open for debate. The bill is carefully crafted to protect the food basket of common people. Education books, imported parts of computer & laptops. Reduce GST for agriculture inputs, used clothing & footwear
Withdrawal GST exemptions on large ships, imported bicycles, imported formula milk, live animals, imported meat, journals & periodicals, pharma raw martials
GST withdrawal on power machinery, renewable energy like solar, wind etc,
Government of Pakistan
Finance Division
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Islamabad: November 27, 2021
CLARIFICATION
In response to news item published in daily The Express Tribune titled “Rs40b irregularities detected in PM’s Covid package”,
it is clarified that the Covid related expenditure report was part of the overall audit report prepared by Auditor General office for FY2020, which has already been laid in Parliament. As such the report is already in public knowledge.
The IMF had provided $1.4 billion last year as rapid financing instrument. The Auditor General conducted a special audit of the Covid related expenditure.
As we all know the ‘fake news’ is the biggest challenge to this government. There is fake news circulating related to ‘Adviser to Finance’ meeting with Chinese Economist comments in Joint session. This is absolutely rubbish social media message no such interaction took place
The objective of this message would be to spread despondency. Advisor to Finance, Shaukat Tarin, took strong notice of this fake news and decided to file complain with FIA for proper investigation to identify the source and strict action according to law
Below the is the fake message “ Chinese economist slaps Pak Finance Minister over a joint session yesterday at Isb...
Stop blaming America and instead blame the Japanese and yourself.
SBP takes measures to curb undesirable foreign currency outflow 1/n
In order to enhance transparency in the foreign currency transactions by exchange companies and to curb undesirable outflow of cash foreign currency, the State Bank of Pakistan has introduced following regulatory measures: 2/n
i.Persons travelling to Afghanistan will be allowed to carry only USD1,000/- per person per visit with a maximum annual limit of USD6,000. 3/n