Business

Pakistan’s debt at ‘unsustainable’ levels, warns finance minister

Published

1 year ago

Farwa

Dr Shamshad Akhtar says economic revival package on the cards.
Says govt to restructure FBR to increase revenue to GDP ratio.
We are trying to bring a equitable taxation system, says minister.

ISLAMABAD: Caretaker Minister for Finance Dr Shamshad Akhtar while admitting debt had reached “unsustainable” levels shared that the government is in talks with the provinces to shift responsibility for Benazir Income Support Programme (BISP), hand over provincial PSDP projects and close down devolved departments for rationalising expenditures, reported The News on Friday.

“Pakistan’s public debt breached the limits of Fiscal Responsibility and Debt Limitation Act since 2013-14 and it has reached unsustainable levels. There is no good news on the debt burden as multilateral institutions did not permit the restructuring of external debt. The G-20 had granted Debt Service Suspension Initiative (DSSI) during the Covid-19 pandemic. So far Pakistan has undertaken a debt arrangement with China of $2.4 billion till 2024-25,” she said while addressing an SDPI conference in Islamabad on Thursday.

Shamshad addressed all the macroeconomic issues confronting Pakistan and said they were moving towards a democratic transition, and an “economic revival package” was on the cards to achieve self-reliance and ensure integration of the economy with regional countries.

She warned that the debt restructuring talks should be dealt very carefully as it will have repercussions. However, she made it clear that Pakistan does not plan to delay repayments of external debt. The larger fiscal deficit pushed up the debt burden, so the country was forced to breach the Fiscal Responsibility and Debt Limitation Act since 2013-14.

On the domestic debt front, she mentioned the government was moving on the path of re-profiling to move from short-term debt to long-term bonds of 3 to 10 years to reduce the cost of borrowing. However, on external debt, she said options were limited as 44% of overall public debt was in the shape of foreign loans.

Dr Shamshad said the government would restructure the Federal Board of Revenue to increase the revenue-to-GDP ratio from 9 to 15% in the first phase.

“We are trying to place a fair and equitable taxation system,” she said and assured that the tax base would be broadened. The customs policy and operation would be separated with the objective of facilitating trade and eradicate smuggling.

The finance czar said that the GDP growth rate would hover around 2% to 3% in the ongoing fiscal year. She added that the business and investors’ confidence had been restored.

Quoting a WB report, she said Pakistan’s size of economy could touch $2 trillion if the macroeconomic stability was ensured till 2047 from existing levels of $300 billion.

The Viability Gap Fund (VGF) would be established whereby a public-private partnership would be developed to execute development projects with the participation of the private sector. All departments devolved under the 18th Amendment would be abolished at the federal level.

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.