Business

IMF frustrated over govt’s failure to notify revised gas price

Published

1 year ago

Farwa

IMF has directed govt to review gas tariff prices biannually.
PDM govt delayed gas hike due to political reasons, IMF told.
IMF also questions Ogra on why gas tariffs were not notified.

ISLAMABAD: The International Monetary Fund (IMF) has expressed its frustration over the government’s decision to not notify the revised gas price every six months – July 1 and January 1 – in a financial year, reported The News on Wednesday.

The Fund has directed the government to review the gas tariff prices biannually to avoid the accumulation of circular debt in the gas sector.

“The visiting IMF mission flagged the issue of not increasing the gas tariff on a biannual basis by government,” a senior official who was part of the meeting with the Fund told The News.

“The Fund argued failure to hike the gas tariff biannually for the last 10 years since 2013 caused a massive buildup in the gas circular debt.”

The Pakistani officials told the Fund that the caretaker government had notified the unprecedented hike in gas tariff from November 1. They also explained that the government was hoping it would generate Rs980 billion in revenue in eight months. So, the government may not be required to hike the tariff due from January 2024 when the regulator comes up with a determination to be effective from January next calendar year.

The interim government also communicated to the Fund that the Shehbaz Sharif-led government had delayed the increase in gas tariff because of political considerations, and the caretaker regime has to come up with a massive increase, which will end the process of further increase in the circular debt in FY24 that now stands at Rs2,900 billion.

The IMF mission Tuesday also held a meeting with Ogra officials and asked the regulator why it has not notified the gas tariffs after the lapse of 40 days since its determination. The Fund was told the regulator cannot do it on its own, as under Section 21 of the law, it has to seek guidelines from the government.

On Monday, the government informed the IMF that it expects the Current Account Deficit (CAD) to decline by $2 billion to end at $4.5 billion compared to the $6.5 billion projected till the end of June 2024.

A report published in The News on Tuesday stated that the downward projection of CAD indicated that the government was expecting that imports would continue to decline in the remaining period of the current fiscal year.

Amid difficulties in materialising the external dollar inflows up to the desired mark, the Pakistani authorities have no other option but to reduce the CAD to avert a balance of payment crisis.

Pakistan’s external financing requirements stood at $28 billion — foreign debt servicing of $23.5 billion and CAD projection of $4.5 billion.

After the signing of the IMF agreement under the $3 billion Stand-by Arrangement (SBA) programme, the forex reserves saw an improvement in July 2023, but in the last two months, the pace of external loans and grants has slowed down. Now the authorities are expecting that completion of the first review of the IMF programme would push up the dollar inflows from multilateral and bilateral creditors.

Business

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

Published

2 days 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.