Pakistan’s central bank to hold rates steady as inflation seen easing— poll

A Pakistani man counts Pakistan's rupees at his shop in Karachi on May 16, 2019. (AFP/File)
Short Url
Updated 11 December 2023
Follow

Pakistan’s central bank to hold rates steady as inflation seen easing— poll

  • State Bank of Pakistan is expected to announce its new monetary policy on Dec. 12
  • Median estimate in a Reuters poll of 12 analysts predicts no change in rates on Tuesday

KARACHI: Pakistan’s central bank is expected to hold its key rate steady at a fourth straight policy meeting on Tuesday, with inflation forecast to start easing in coming months paving the way for rate cuts to boost the economy, analysts said. 

The South Asian nation has embarked on a difficult path to economic recovery under a caretaker government after a $3 billion loan program was approved by the International Monetary Fund (IMF) in July that helped avert a sovereign debt default, but contained conditions that complicated efforts to curb inflation. Pakistan’s key rate was raised to an all-time high of 22 percent in June and has stayed unchanged for the last three rate meetings. 

The median estimate in a Reuters poll of 12 analysts predicts no change on Tuesday, with one analyst calling for a 100 basis point cut. The market consensus is for rates to start easing gradually in the first half of next year, depending on the trajectory of inflation.

“Inflation is still too high and negative real interest rates do not justify any easing at this point. Our trading partners like the US are already at positive real interest rates,” said Usman Zahid, director research at AKD Securities. 

Zahid said the 2.7 percent month-on-month jump in November inflation was due to the increase in gas prices among other things but annual inflation is likely to start easing from February 2024. Annual inflation clocked in at 29.2 percent in November, data from the Pakistan Bureau of Statistics (PBS) showed, a slight increase from October but well below a high of 38 percent in May. 

Investors have already priced in a peak in Pakistan interest rates and the expected successful completion of the IMF program has buoyed stock markets and the currency. Pakistan’s benchmark index crossed a psychological barrier of 66,000 points to trade at a new all-time high, up 4,532 points or 7.3 percent in the week ending Dec. 8, the highest ever weekly return in terms of points. 

“Stable currency, low current account deficit and likely fall in inflation in coming months may convince members of committee to adjust rates downwards,” said Mohammad Sohail, CEO of Topline Securities adding that he thinks the key rate could fall by 100 bps on Tuesday itself.


For some Pakistanis, camels make a bigger, better and more expensive Eid sacrifice

Updated 10 sec ago
Follow

For some Pakistanis, camels make a bigger, better and more expensive Eid sacrifice

  • Traders from across Pakistan flock each year to Hala camel market in southern Matiari district
  • Camel sellers and buyers complain of sharp rise in prices compared to last year though Pakistan inflation has slowed 

MATIARI, Sindh: Muslims around the world often slaughter sheep and cows at the annual Eid Al-Adha “feast of the sacrifice” but some Pakistanis are thinking bigger.
Ahead of this year’s Eid holiday, traders from around the country are making their annual trip to the Hala market in the southern Matiari district, which is dedicated to animals for auction — but not sheep or cows, but camels. 
“The biggest camel market in Pakistan is in Hala. Camels are brought here for trading from different cities, districts and divisions,” said Muhammad Akhtar, a trader who had arrived from the southwestern city of Quetta nearly 700 kilometers away to purchase camels ahead of Eid. 
“This market is busy year-round. Camels are supplied here from all over Pakistan.”
Traders at the market listed some of the famous breeds, including Laari, Thari, and Saakrai, with Laari being the most expensive. 
“There are different prices for camels depending on their beauty,” Akhtar said. “The sacrificial [Eid] camels are obviously the most expensive. Laari is the most expensive breed, so its price is higher.”
A Thari breed, weighing 8-9 maunds, can cost up over $3,000 around Eid time, while the Laari and Saakri kinds can go for over $6,000. Another breed, the Sindhi, can sell for up to $4,600. 
“Camels are costlier on the occasion of Eid-ul-Adha compared to before Eid,” Akhtar said. “Due to the arrival of Eid, rates are higher.”
Pakistan’s consumer price index (CPI) in May rose 11.8 percent from a year earlier, the lowest reading in 30 months and below the finance ministry’s projections, though consumers around the country still complain of exorbitant prices of food and energy. 
Pakistan has been beset by inflation above 20 percent since May 2022. Last May, inflation jumped as high as 38 percent as the country navigated reforms as part of an International Monetary Fund bailout program. However, inflation has since slowed down but customers at the Hala market weren’t happy. 
“I come to Hala every year to buy two sacrificial camels for my business. I prefer Sindhi camels, but they are quite expensive,” said Sher Muhammad Lulai, who had traveled hundreds of kilometers from a town in Punjab with a budget of around $2,100, which turned out to be much less than anything available. 
“I will purchase if I find suitable ones, or I will return without buying anything.”
Asghar Ali, another trader from Punjab and a resident of Mian Channu, said he had purchased 15 camels from Hala market to take back to Punjab but prices had been back-breaking. 
“Compared to last year, the cost has increased by Rs100,000 rupees [$350] but I have no choice but to purchase them, as this is my livelihood,” Ali said. “I will sell them back home and trust that God will provide me with sustenance,.”

“MARKET IS DOWN”

It’s not just buyers who are complaining. Sellers too said they were struggling to find customers this season. 
Sher Khan, a trader from Usman Shah Huri in Sindh’s Tando Allahyar district, said he had brought two camels to the market to sell but failed thus far to find buyers.
“I am demanding RS1.8 million ($6,392) for my two camels, but despite being here for the last four days, I have not found a customer,” he said. “The market is very down, perhaps due to inflation.”
Saadullah Brohi, another trader from Quetta, said he had been coming to Hala to sell for 22 years but had never seen the market “this slow” before.
“In the past, the market was good, but it’s not good anymore,” Brohi told Arab News. “However, we cannot do anything except adjust ourselves to survive as I have to feed my family.”


Pakistani pilgrims transition from Arafat to Muzdalifah, marking key rituals of Hajj journey

Updated 15 June 2024
Follow

Pakistani pilgrims transition from Arafat to Muzdalifah, marking key rituals of Hajj journey

  • Pilgrims attended the annual Hajj sermon in Arafat where they were urged to pray for people of Palestine
  • After spending the night in Muzdalifah, pilgrims will perform symbolic stoning of the devil in the morning

ISLAMABAD: Pakistani pilgrims began moving to Muzdalifah on Saturday evening after spending the day in Arafat, where they had gathered in the morning to attend the annual Hajj sermon and engage in prayers and self-reflection, as confirmed by the country’s Ministry of Religious Affairs.
The Day of Arafat holds tremendous significance as it commemorates the moment more than 1,400 years ago when Prophet Muhammad (PBUH) delivered his Farewell Sermon, calling for unity, equality and justice among Muslims.
After spending a reflective night under the starry sky in Muzdalifah, pilgrims will move to Mina in the morning to perform the symbolic stoning of the devil at Jamarat, an act signifying the rejection of evil.
“After completing the standing at Arafat, all Pakistani government Hajj pilgrims, along with other pilgrims, set off toward Muzdalifah,” the ministry said in a statement. “The Pakistani pilgrims departed for Muzdalifah under the guidance of their sector representatives.”
“The pilgrims seemed satisfied with the arrangements made by the Saudi authorities, and they continued to congratulate each other happily after completing their stay in Arafat,” the statement added.
Earlier, pilgrims from across the world attended the Hajj sermon delivered by one of the prayer leaders of the Grand Mosque in Makkah, Sheikh Maher bin Hamad Al-Muaiqly, who urged them to pray for the Palestinians who had been “harmed and hurt by their enemy.”
He noted the people of Palestine had been deprived of “food, medicine and clothing.”
Asked about their Hajj experience, Pakistani pilgrims said they were fortunate to be in Arafat to perform one of the greatest rituals in Islam.
“The experience in Mina and Arafat has remained very good,” Ilyas Kabir from DG Khan said in a video circulated by the ministry. “It is a great blessing to have the opportunity to perform Hajj. I urge the pilgrims to be patient.”
An elderly woman in a wheelchair, who said she had been performing Hajj with her son, informed that she had been praying for the entire Muslim world.
“I pray for all Muslims,” she said. “Good wishes, good intentions, especially for Palestine. May there be peace and tranquility. May Allah grant them freedom.”
The stoning ritual at Jamarat in the morning will be followed by the traditional animal sacrifice, leading to Eid Al-Adha celebrations across the world.
With input from AP


PM Sharif pledges next IMF bailout to be Pakistan’s last in 100-day progress address

Updated 15 June 2024
Follow

PM Sharif pledges next IMF bailout to be Pakistan’s last in 100-day progress address

  • The prime minister envisions leaner governance structure, promises solid results within two and a half months
  • He says the government will send 300,000 Pakistanis for IT training to China, make exports more competitive

ISLAMABAD: Prime Minister Shehbaz Sharif on Saturday vowed to make the next International Monetary Fund (IMF) program the last one needed to cure his country’s ailing economy during a televised address that summarized the 100-day progress of his administration, which came into power after the general elections in February.
Sharif delivered the speech just a few days after his government presented its first $67.76 billion federal budget, setting highly ambitious revenue generation targets without specifying significant cost-containment measures.
Pakistan is also engaged in negotiations with the IMF for a longer-term bailout of around $8 billion, following a short-term loan of $3 billion that helped the country avert a sovereign debt default in June last year. Federal Minister for Finance and Revenue Muhammad Aurangzeb announced in a post-budget news conference this week that the country was hopeful to sign a staff-level agreement with the international lending agency in July.
The prime minister said in his speech his government had taken measures to attract foreign investment and enhance trade with other countries to end the borrowing cycle and find a way out of the debt trap.
“Pakistan will gradually escape the life of debts,” he said during the address. “It is difficult, but not impossible. There are examples in the modern world where many countries approached the IMF only once, and then never returned to it for the rest of their lives.”
“We have gone there 24 or 25 times,” he continued. “Today, I promise you that, God willing, if we strictly follow our program and fully commit to the goals we have set, then this program we are taking might be the last IMF program in the history of Pakistan. After this, we will stand on our own feet and surpass our neighboring countries in the race for development.”
The prime minister said his administration had already brought down inflation from 38 to 12 percent.
Sharing his vision for rapid economic progress, he said the government would not run businesses or enterprises but facilitate the private sector to take the lead. He also noted that his administration was working toward a leaner governance structure and reduced expenses.
“It is the primary duty of my government to eliminate royal expenditures,” he said. “All such ministries and institutions that have become a burden on the nation instead of serving it, and have not only incurred unjust expenses but have also become centers of corruption, their elimination has now become inevitable,” he continued. “It is my foremost duty to abolish them. Therefore, a ministerial committee has been formed on this matter, and I assure you that, God willing, I will bring you positive results within the next two and a half months.”
Sharif said his government was working to create a business-friendly environment and had arranged for 300,000 young Pakistanis to receive information technology training in China every year.
He also noted it had brought down the power tariffs for industries by Rs10.50 per unit to bring down production costs and make Pakistani exports more competitive in international markets.


Pakistan PM advocates digital governance, eyes cost cuts and transparency with E-Office initiative

Updated 15 June 2024
Follow

Pakistan PM advocates digital governance, eyes cost cuts and transparency with E-Office initiative

  • The E-Office plan is part of a broader initiative to make the governance structure leaner and more efficient
  • The PM also held a meeting to discuss the rationalization of state expenses before the budget presentation

ISLAMABAD: Prime Minister Shehbaz Sharif said on Saturday the digitization of government ministries and subordinate departments would save Pakistan billions of rupees and ensure transparency while presiding over a meeting to review the transition to electronic-office (E-Office).
This initiative is part of a broader plan to make the governance structure leaner and more efficient, held shortly after discussions on the rationalization of state expenses before Wednesday’s federal budget presentation.
“The main purpose of using E-Office is to provide the public with better services and bring transparency to the government system,” Sharif told at the meeting. “The use of paper will be minimized, which will also have positive effects on the environment. The transition to E-Office will save billions of rupees for the national treasury.”
The prime minister instructed relevant authorities to make E-Office user-friendly and secure.
He also urged speeding up progress on a cooperation agreement with the Chinese technology company Huawei in this connection, which he discussed during his recent five-day visit to China.
These meetings to reform government structure and operations come at a critical time when Pakistan faces large and persistent fiscal deficits that contribute to macroeconomic instability.
The issue is significant as the government seeks another International Monetary Fund (IMF) bailout, where reducing government expenses could help reallocate funds to more pressing economic issues.


Body of one missing Japanese climber found on Spantik peak, search continues for second

Updated 15 June 2024
Follow

Body of one missing Japanese climber found on Spantik peak, search continues for second

  • The two Japanese climbers were reported missing on Monday while trying to summit the 7,027-meter peak
  • Authorities say the rescue team comprising two helicopters are ‘working tirelessly in challenging weather’

KHAPLU, Gilgit-Baltistan: The body of one of the two Japanese climbers was found at the 7,027-meter Spantik peak on Saturday, confirmed local officials, after they were reported missing by another group of mountaineers earlier in the week, prompting authorities in the northern Gilgit-Baltistan region to launch a rescue operation.
Pakistan is home to five of the world’s tallest mountains that loom above 8,000 meters, including K2 and Nanga Parbat, known for their treacherous climbs.
Spantik, more popularly called the Golden Peak, is largely viewed as more accessible and straightforward. The Japanese climbers, Ryuseki Hiraoka and Atsushi Taguchi, were attempting to summit it in the Karakoram Range when they went missing on Monday, June 10.
“The dead body of a Japanese climber has been found and the search for the other one is underway,” Naiknam Karim, CEO of Adventure Tours Pakistan, told Arab News in a text message.
The deputy commissioner of Shigar district, Wali Ullah Falahi, informed over the phone that the body of Hiraoka was traced during a helicopter search.
He added that a nine-member rescue team had also left the base camp at 5 AM to look for the missing mountaineers.
“The body was found 300 meters below Camp-3,” he added.
Earlier, a statement circulated by his office confirmed that the body had been retrieved while the search for the second climber was going on.
“The search team, comprising two Pakistan Army helicopters and crewed by high-altitude climbers and experts, has been working tirelessly in challenging weather conditions to locate the missing climbers,” it said.
The statement also noted the Pakistani authorities were keeping the Japanese embassy officials informed about the developments.
According to official figures, over 8,900 foreigners visited the remote Gilgit-Baltistan region in 2023 where the summer climbing season runs from early June to late August.