Business

Economic loss from floods in Pakistan reaches $18b

Published

2 years ago

Farwa

Economic losses have gone up further, says Centre.
Increase is mainly because agricultural crops have been destroyed.
New estimate states 8.25m acres of crops destroyed.

The rapid assessment cost on projected economic losses following floods as calculated by the Centre and endorsed by the provinces has gone up further to the tune of $17-$18 billion.

The economic losses have further increased mainly because agricultural crops have been destroyed across 8.25 million acres as compared to an initial assessment of 4.2 million acres. Cotton, rice, and minor crops have been damaged severely and if de-watering is not done properly, it can cause serious problems for wheat sowing.

Cotton crop has evaporated in most parts of the country and now wheat sowing is under threat.

The Ministry of National Food Security has been assigned to come up with a summary to increase the minimum support price of wheat for the coming crop. The authorities have held meetings with international donors and assured them that Pakistan would place an effective monitoring and evaluation system to utilise each and every penny to mitigate the flood losses in a transparent manner.

“The UN secretary-general is due Friday (today) for a three-day visit and Islamabad is going to share the rapid assessment cost with him. The international donors under the supervision of the World Bank are making their separate study on Damage and Need Assessment and then these figures will be reconciled,” official sources told The News Thursday.

The Ministry of Planning is undertaking an exercise to slash down the Public Sector Development Program (PSDP) by Rs250 to Rs300 billion to bring it down from Rs800 billion to Rs500 to Rs550 billion for the current fiscal year. These resources will be diverted toward the flood-affected areas.

When contacted, Minister of State for Finance Aisha Ghaus Pasha and inquired about the latest rapid assessment cost, she refused to share the exact information and said that the cost had escalated and efforts were underway to finalise it by giving a cut-off date.

Under the rapid assessment exercise, the government had initially envisaged the cost of economic losses to the tune of $10 to $12.5 billion but the revised estimates suggested that the accumulated cost of economic losses had escalated up to $17 to $18 billion.

The per capita income is projected to slow down in the wake of the reduced GDP growth. The government had envisaged a GDP growth rate of 5 percent for the current fiscal year. The IMF had recently projected that the GDP growth would be standing at 3.5 percent for the current fiscal year. However, the floods damaged the agriculture sector and the industrial sector also gave an indication of slowing down, so the GDP growth might be below two per cent.

Business

Over 500 points are lost by PSX stocks during intraday trading.

Published

10 hours ago

Farwa

The market saw a bearish trend as it dropped more than 500 points, just hours after Pakistan’s Stock Exchange (PSX) reached a new milestone by reaching the 73,000 mark.

As compared to the previous close of 72,742.75 points, the KSE-100 index dropped to 72,177.22 points, or 565.52 points, or 0.78% lower.
Expectations of an interest rate drop of up to 100 basis points during today’s Monetary Policy Committee (MPC) meeting, according to Intermarket Securities director of research CFA Muhammad Saad Ali, are driving market confidence.

The market is also being driven, he continued, by favourable news flow on upcoming negotiations with the International Monetary Fund (IMF) for a new programme.

Last Friday, the late-session purchasing fueled a 1% advance in the stocks, which helped them close close to 73,000 points. Dealers reported this.

Closed at 72,742.75 points on Friday, the benchmark KSE-100 index saw a gain of 771.35 points, or 1.07%.

Notwithstanding the turbulent session, according to Chase Securities analyst Muhammad Rizwan, “the market rebounded with a strong start and achieved a new all-time high.”.

“This impressive performance was driven by significant contributions from various sectors: fertiliser added 386 points, commercial banks contributed 174 points, the power sector provided 112 points, and cement added 93 points, collectively reversing the previous negative close and boosting market sentiment.”

Business

Despite global tides, Pakistan’s economy is recovering, according to Governor SBP

Published

10 hours ago

Farwa

Ahmad, who was speaking at the ICMA Pakistan Members Convocation, emphasised the country’s economy’s outstanding development while also highlighting the difficult macroeconomic environment of the previous year, which was marked by rising inflation, depleting foreign exchange reserves, pressure on exchange rates, and increased uncertainty.

Nonetheless, in the present times, the PKR has stabilized and the stock market is rising to unprecedented heights, reserves have increased to around US$8 billion despite large debt repayments, and inflation is dramatically decreasing.

Ahmad gave the government and SBP credit for their unwavering commitment to addressing macroeconomic difficulties head-on for this reversal.

Ahmad emphasized that the government’s efforts to reduce spending and achieve fiscal consolidation, together with the need for unpopular but necessary actions like the SBP’s increase of the policy rate to 22%, are producing beneficial results.

As global shocks like climate change, technology improvements, and cyber threats become more complex, he emphasises the significance of new viewpoints and creative solutions in tackling long-standing economic concerns.

Congratulating the graduating accounting professionals, Ahmad emphasized the importance of having a thorough understanding of accounting, finance, and economics in order to create workable solutions. He also urged the professionals to take a proactive approach to addressing new difficulties.

Ahmad emphasized the value of leadership abilities in policymaking and urged graduates to positively impact Pakistan’s economic landscape by working hard, being devoted to excellence, and contributing their full effort.

Along with giving a hearty welcome to Governor Jameel Ahmad and other SBP dignitaries, ICMA Pakistan President Shehzad Ahmed Malik also praised the SBP team’s efforts to stabilize the currency. With that, Ahmad presented the graduating CMAs with their degrees.

Business

The IMF board is anticipated to approve Pakistan’s $1.1 billion payout today.

Published

10 hours ago

Farwa

The IMF executive board meeting is scheduled to go until May 3, according to specifics. Based on the sources, it is expected that the international lender will approve Pakistan’s $1.1 billion payout today.

The State Bank of Pakistan is anticipated to obtain the final tranche from the IMF tomorrow, following approval, they added.

On July 12, 2023, Pakistan took advantage of a $3 billion loan package offered by the International Monetary Fund (IMF).

Thus far, Pakistan has been granted two installments totaling $1.9 billion: $1.2 billion in July and $700 million in January 2024.

On the last assessment of a $3 billion loan plan, Pakistan and the International Monetary Fund (IMF) came to a staff-level agreement last month.

Following their week-long visit to Islamabad, which ended on March 19, the IMF delegation made the announcement.

Global lender expressed its optimism that the incoming caretaker administration and central bank of Pakistan would persist in their efforts to stabilize the country’s economy, complimenting them on their “strong program implementation.”

In order to further solidify economic and financial stability, the new government is dedicated to carrying out the policy initiatives that were initiated under the existing Stand-By Arrangement for the balance of this year, the IMF official stated.

In June of last year, the IMF granted Pakistan’s economic stabilization program support through a critical nine-month agreement.