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ADB, Pakistan sign $1.2 billion loan agreement

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  • Agreement to ensure funding for budget financing in Pakistan.
  • Projects on domestic resource mobilisation will also get funds.
  • World Bank also approves $350 million in financing for Pakistan.

The Asian Development Bank signed a $1.2 billion loan agreement with Pakistan, the ADB officials confirmed on Wednesday.

The agreement, which was signed last Friday (December 15), comprises funding for budget financing and projects focused on domestic resource mobilisation, while a total of six projects will work towards making women financially independent. 

At least one-third of the funds will be disbursed as budget financing and make way for jammed financing pipelines following a deal with the International Monetary Fund (IMF).

The Economic Affairs Division (EAD) and ADB signed the loan agreements last Friday. An EAD official also confirmed the agreement and highlighted that ADB will allocate $400 million from the total fund for budget support via two different agreements.

World Bank approves $350 million in financing

Meanwhile, the executive directors’ board of the World Bank also approved $350 million in financing today for the Second Resilient Institutions for Sustainable Economy (RISE-II) Operation to strengthen fiscal management and promote competitiveness for sustained and inclusive economic growth.

Najy Benhassine, the World Bank country director for Pakistan, said Pakistan needs urgent fiscal and structural reforms to restore macroeconomic balance and lay the foundations for sustainable growth.

“RISE-II completes a first phase of tax, energy and business climate reforms geared to raising additional revenues, improve the targeting of expenditures and stimulate competition and investment,” he added.

The operation contributes to better fiscal management by improving fiscal policy coordination, enhancing debt transparency and management, strengthening the taxation of property, and improving the financial viability of the power sector.

The World Bank operation also aims to foster growth and competitiveness by reducing the cost of tax compliance, improving financial sector transparency, encouraging the use of digital payments, and promoting exports by lowering import tariffs.

“Based on the foundations laid through RISE II and parallel support by other IFIs, Pakistan has the opportunity to tackle long-standing structural distortions in its economy after the upcoming general elections. Failing to use this opportunity would risk plunging the country back into stop-and-go economic cycles,” said Derek HC Chen, task team leader of the operation.

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Islamic Sukuk Bonds: Government Is Expected To Begin Bond Auction Next Week

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There is now more positive economic news for the people of Pakistan. The government is anticipated to begin the Sukuk Islamic Bond auction next week, after the central bank’s announcement of a large drop in the policy rate.

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SIFC Encourages Green Tourism: Reforming Visas to Increase Investment

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Enhancing investment in the tourism sector, Green Tourism Pakistan’s initiative has received backing from the Special Investment Facilitation Council.

Visa-On-Arrival for 126 countries, Visa-Free Entry for Gulf Cooperation Council nations, and 24-hour expedited visa processing are some of the main features of the Green Tourism Visa Policy.

It is anticipated that these endeavors will draw in about 80 million dollars in foreign direct investment and 8.3 billion rupees in domestic investment.

Green Tourism Private Limited has introduced hunting resorts in Naltar, Hunza, and Skardu, along with four- and five-star city hotels, to improve the tourism experience.

In the first phase of the project, 17 of the 78 areas have seen the start of development activity.

Approved is a central authority for Green Tourism that will supervise the growth of Air Operations.

To promote Religious Tourism, extra precautions have been taken to guarantee the security of visitors from all religions, including Sikhs and Buddhists.

Furthermore, in order to improve the quality of the tourist experience, the green guide quality program has been introduced to supply top-notch tour guides.

There is now a deluxe bus excursion from Islamabad to Peshawar that promotes local culture.

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July 2024 export data from Pakistan shows a significant rise.

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The Strategic Investment Facilitation Council (SIFC) has been instrumental in improving Pakistani products’ access to international markets, as seen by the significant surge in exports from the country at the start of the 2024–25 fiscal year.

With a 7.26% rise over the same month the previous year, July 2024 exports to the US were $476.017 million. After increasing by 7.74% annually, the United Arab Emirates emerged as the second-largest export destination.

The third and fourth places were occupied by exports to the UK ($183.303 million) and China ($60.100 million). A substantial increase in exports to Afghanistan was recorded in July of this year, rising from $46.262 million to $88.065 million, largely due to successful anti-smuggling efforts.

With a combined export volume of $553.951 million, more important export destinations included Germany, the Netherlands, Italy, Spain, Saudi Arabia, and Turkey.

A bright future for the national economy is suggested by the growing confidence major international markets have in Pakistani exports. Through the efforts of SIFC and the government, this greater access to global markets has been made possible.

Pakistan’s economy is predicted to remain stable as a result of the export growth that SIFC has enabled.

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