Business

UK economy shrank record 11% in 2020, worst since 1709

Published

2 years ago

Farwa

UK recorded its biggest fall in output in more than 300 years in 2020.
Gross domestic product fell by 11.0% in 2020.
Revision in GDP reflects lower contributions from healthcare, retailers.

LONDON: Britain recorded its biggest fall in output in more than 300 years in 2020 when it faced the brunt of the COVID-19 pandemic, as well as a larger decline than any other major economy, updated official figures showed on Monday.

Gross domestic product fell by 11.0% in 2020, the Office for National Statistics said. This was a bigger drop than any of the ONS’s previous estimates and the largest fall since 1709, according to historical data hosted by the Bank of England.

British statisticians regularly update GDP estimates as more data becomes available.

The ONS’s initial estimates had already suggested that in 2020 Britain suffered its biggest fall in output since the “Great Frost” of 1709. But more recently the ONS had revised down the scale of the fall to 9.3%, the largest since just after World War One.

Even before the latest revisions, Britain’s economic slump was the largest in the Group of Seven, and the latest downward revision makes it greater than Spain’s, which recorded a 10.8% fall in output.

However, the ONS cautioned against direct comparisons with other countries as most – with the exception of the United States – had not yet undertaken the same type of in-depth revisions as Britain had.

The downward revision in GDP reflected lower contributions from healthcare and retailers than previously thought.

“The health service faced higher costs than we initially estimated, meaning its overall contribution to the economy was lower,” ONS statistician Craig McLaren said.

The ONS had already factored in a fall in routine care provided by Britain’s National Health Service as it focused on treating COVID-19 patients and limiting the spread of the disease in hospitals.

A closer look at the increased costs faced by individual retailers also led to a downward revision of the sector’s contribution, while factory output was revised up to take account of lower raw material costs.

Britain’s economy bounced back sharply last year and recovered its pre-pandemic size in November 2021. But fast-rising inflation means the Bank of England expects the economy will slip back into recession later this year.

The ONS will publish updated growth figures for 2021 and the first half of 2022 on September 30.

Business

Gold prices in Pakistan approach an all-time high.

Published

19 hours ago

Farwa

Following a substantial surge the prior day, gold prices in Pakistan are ascending to unprecedented levels with an additional gain on Thursday, coinciding with a rise in global precious metal rates.

The price of 24-karat gold in the local market rose by Rs700 per tola, reaching Rs277,900, as reported by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).

Likewise, the cost of 10 grams of 24-karat gold increased by Rs600, currently priced at Rs238,254.

Globally, gold prices exhibited an upward trend, increasing by $7 throughout the day. The APGJSA reports that the international gold price was $2,682 per ounce.

Notwithstanding the increase in gold prices, the silver market exhibited stability, with the price of silver maintained at Rs3,050 per tola.

In the previous month, gold prices in Pakistan reached an unprecedented high of Rs 277,000 a tola, driven by substantial gains in the worldwide market.

Business

World Bank: Power industry subsidies soar by 400% in just five years.

Published

19 hours ago

Farwa

Ninety-four percent of domestic customers will benefit from the budgetary subsidy in 2024, according to a World Bank report, which credits the increase in protected consumers with contributing to the weight of subsidies.

In the current fiscal year, the electricity sector subsidy has increased by an astounding Rs. 954 billion, from Rs. 236 billion in the 2020 fiscal year to Rs. 1190 billion.

Notwithstanding changes, the circular debt has averaged Rs. 400 billion yearly over the last four years due to the incapacity to minimize losses and inadequate recovery of electricity payments.

According to the World Bank, the government must solve the fundamental problems in the power industry in order to lower the burden of subsidies and circular debt, as rising electricity prices and inadequate tax collection will only serve to worsen the circular debt crisis.

The rise in Pakistan’s power sector circular debt has raised worries from the World Bank (WB) despite an unprecedented increase in energy pricing.

Within the last six years, the debt has grown by 1241 billion rupees, according to the World Bank’s study. Between 2019 and 2021, the debt climbed by 1128 billion rupees.

The electricity sector’s circular debt has been increasing at an alarming rate, according to a World Bank analysis. Between 2022 and 2024, there was a substantial increase of 113 billion rupees.

Pakistan’s electricity industry has 2393 billion rupees in total circular debt as of 2024.

Restructuring is required to solve the circular debt issue, according to the World Bank.

Business

Final settlement: Govt to pay five IPPs Rs 72 billion.

Published

20 hours ago

Farwa

On October 10, Prime Minister (PM) Shehbaz Sharif declared that the agreements with five IPPS would be terminated in the first phase. Sources claim that the government will give Rs 15.5 billion to Rousch Power and Rs 36.5 billion to Hubco.

In a same vein, the federal government would pay Lalpir Power Rs 12.8 billion, Atlas Power Rs 15.5 billion, and Sapphire Power Rs 6 billion.

The sources state that late payment fees are not included in the settlement. With effect from October 1, the agreements with the five IPPs will be considered officially ended.

PM Shehbaz earlier remarked that the termination was carried out with the owners of the IPPs’ mutual permission while presiding over the federal cabinet meeting in Islamabad.

The Prime Minister notified the Cabinet that the only money that will be paid, interest-free, to these IPPs is the outstanding balance.

According to him, the national exchequer will gain over 411 billion rupees from the termination of these contracts, while power customers will save roughly sixty billion rupees.

According to Prime Minister Shehbaz Sharif, it was the result of the arduous teamwork of the entire government. In this regard, he also acknowledged the contributions and assistance of the associated parties. He specifically mentioned General Asim Munir, the Chief of Army Staff, who showed a personal interest in the situation.

The prime minister characterized the development as the start of a trip that will ultimately lead to the advancement and prosperity of the populace.

PM Shehbaz Sharif also brought up the assistance that the Punjabi and Federal governments gave to power users over the summer.