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

“Ten companies express interest in purchasing PIA.”

Published

45 mins ago

Farwa

Ten businesses, including three domestic aviation companies, have put in their bids.

According to the sources, other organizations interested in purchasing the majority of PIA shares include Fly Jinnah, AirSial, Arif Habib Group, Shujaat Azeem Group’s consortium, Tabba, Tariq Group, and Sehgal groups.

In order to provide these businesses more time to complete their bids, the PIA privatization deadline, which was originally set for May 3 (today), has been extended to May 18.

The Federal Minister for Privatization, Abdul Aleem Khan, declared in his announcement that the deadline for submitting statements of interest for national flag carriers will not be extended.

Sources claimed that although the Privatization Commission and the PIA administration ran a number of roadshows, they were not very successful.

An earlier request for a 30-day extension to hold its annual general meeting (AGM) was made by Pakistan International Airlines (PIA).

Citing inadequate financial reports and an audit as reasons for the delay, the national flag carrier has applied to the Securities and Exchange Commission of Pakistan (SECP).

A letter explaining the extension and its rationale to shareholders was also sent by the airline to the stock exchange.

The request for a postponement is connected to PIA’s current privatization process, according to people with knowledge of the situation.

Following the requested delay, they estimate that the AGM will occur by May 30.

Business

Pakistan has $13.316 billion in total foreign reserves.

Published

54 mins ago

Farwa

The central bank’s foreign reserves rose by $25 million to $8,006 million during the week under review, according to a statement released by the SBP here on Thursday.

It also stated that commercial banks reported holding $5,310 million in net foreign reserves. As of the previous week, which ended on April 19, 2024, the nation had $13,280.5 million in total liquid foreign reserves.

Among them, the central bank had foreign reserves of $7,981.2 million, while commercial banks had net foreign reserves of $5,299.3 million.

According to the State Bank of Pakistan (SBP), Pakistan got the much expected $1.1 billion last payment from the International Monetary Fund (IMF) as part of the $3 billion standby agreement on Tuesday.

The Special Drawing Rights (SDR) 828 million, or $1.1 billion in worth, were given to the SBP “after the successful completion of the second review by the Executive Board of IMF under Stand By Arrangement (SBA),” according to the SBP.

According to the central bank, the payment will show up in SBP reserves for the week that ends on May 3, 2024.

Business

Support from the US for Pakistan’s IMF pact

Published

2 hours ago

Farwa

Matthew Miller, a spokesman for the department, stated, “We support efforts to stabilize its economy, including reaching an agreement with the IMF.”

He declared, “Our trade and investment ties, as well as our technical engagements, are all priorities of our bilateral relationship, and we will continue to engage with them through their economic success.”

it is important to note that an International Monetary Fund (IMF) delegation will visit Pakistan this month to talk about a new “long-term and larger” loan package designed to assist the government in paying back billions of dollars in debt that is due this year.

Discussions on a new loan plan have been set between Pakistan and the foreign lender. There will be two stages to the meetings: technical discussions and policy-level conversations.

Prior to the upcoming negotiations, Pakistan must overcome formidable economic obstacles, including the collapse of an IMF-proposed tax amnesty program.

As part of the $3 billion standby arrangement, Pakistan recently got the much awaited $1.1 billion last payment from the IMF.

Special Drawing Rights (SDR) 828 million, or $1.1 billion in worth, were given to the SBP “after the successful completion of the second review by the Executive Board of IMF under Stand By Arrangement (SBA),” according to the SBP.

Pakistan is requesting a new, longer-term loan from the IMF, and according to Finance Minister Muhammad Aurangzeb, Islamabad could get an agreement at the staff level on the new program by early July.