Highlights: Pakistan unveils 2022/23 budget, aims for 5% growth

A shopkeeper place a price tag on rice at a shop in Karachi on June 10, 2022. (AFP)
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Updated 11 June 2022
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Highlights: Pakistan unveils 2022/23 budget, aims for 5% growth

  • Budget aims for economic growth of 5% amid pressure to control the fiscal deficit and secure IMF bailout money
  • Targets 5% economic growth for 2022/23 fiscal year after an estimated annual growth of 5.97% for current fiscal year

ISLAMABAD: Pakistan Finance Minister Miftah Ismail on Friday unveiled the budget for the 2022/23 fiscal year starting July, aiming for economic growth of 5% amid pressure to control the fiscal deficit and secure International Monetary Fund bailout money.

These are the highlights from the 2022/23 budget:

GDP/DEFICIT

* Targets 5% economic growth for 2022/23 fiscal year, starting July, after an estimated annual growth of 5.97% for the current fiscal year

* Fiscal deficit target set at 4.9% of GDP for 2022/23 vs revised target of 7.1% in 2021/22

* Tax to GDP ratio set at 9.2% for 2022/23 vs 9% in 2021/22

RISKS TO ECONOMY

* Conflict between Russia and Ukraine poses a risk to Pakistan's economy

* Higher crude oil, food prices could stoke high inflation

* Monetary tightening and fiscal consolidation may slow down economic growth

EXPENDITURE

* Federal expenditure estimated at 9.5 trillion rupees for 2022/23

* Development expenditure set at 800 billion rupees for 2022/23

* Pakistan to spend 699 billion rupees on targeted subsidies in 2022/23

* Defence expenditure set at 1.52 trillion rupees for 2022/23 vs 1.48 trillion rupees in 2021/22

* Budget allocates 90.55 bln rupees for education in 2022/23 vs 90.86 bln in 2021/22

* Pakistan cuts health budget to 19.03 bln rupees for 2022/23 vs 154.49 bln rupees in 2021/22

REVENUE

* Revenue target set at 7 trillion rupees for 2022/23

* Aims to raise 96.41 billion rupees from privatisation in 2022/23

* To impose 2% additional tax on income taxpayers with 30 million rupees annual income

* Expects 300 bln rupees receipts from central bank in 2022/23 vs 474 bln rupees in 2021/22

INFLATION

* Budget forecasts average inflation of 11.5% in 2022/23 vs 11.7% in 2021/22

* Consumer-price-index based inflation rose in May to 13.8% year-on-year, the highest in two-and-half years.

* Pakistan raised petrol and diesel prices by around 20% earlier this month

INTERNATIONAL TRADE

* Pakistan's export target set at $35 billion for 2022/23

* Import target set at $70 billion for 2022/23

* Trade deficit target set at 2.2% of GDP in 2022/23

* Budget forecasts remittances of $33.2 billion in 2022/23

AUSTERITY MEASURES

* Ban on buying new cars for govt officials

* Aims cuts in fuel consumption by govt officials

* Funds for debt servicing estimated at 3.9 trillion rupees in 2022/23

OTHER INITIATIVES

* To raise tax exemption limit for salaried income taxpayers

* Announces to promote special economic zones to boost manufacturing

* Offers 5-year tax holiday for film production industry

* To set up 250 mini-stadiums to promote sports

* To exempt import of solar panels from tax

* Exempts 30 pharmaceutical products from customs duty

* Proposes 15% hike in govt employees' salaries

(This story corrects federal expenditure figure to 9.5 trillion rupees from 9.5 billion rupees)

($1 = 202.00 Pakistani rupees)


Downside risks for Pakistan remain exceptionally high — IMF

Updated 8 sec ago
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Downside risks for Pakistan remain exceptionally high — IMF

  • Lender says while government has indicated intention to continue reforms, political uncertainty remains significant
  • Policy slippages and lower external financing could undermine path to debt sustainability, put pressure on exchange rate

KARACHI: Downside risks for the Pakistani economy remain exceptionally high, the International Monetary Fund (IMF) said on Friday in its staff report on the country, ahead of talks with the fund on a longer term program.

An International Monetary Fund mission is expected to visit Pakistan this month to discuss a new program, ahead of Islamabad beginning its annual budget-making process for the next financial year.

“Downside risks remain exceptionally high. While the new government has indicated its intention to continue the SBA’s policies, political uncertainty remains significant,” said the fund in its staff report following the second and final review under the standby arrangement (SBA).

The fund added that political complexities and high cost of living could weigh on policy, adding that policy slippages, together with lower external financing, could undermine the narrow path to debt sustainability and place pressure on the exchange rate.

The IMF also said higher commodity prices and disruptions to shipping, or tighter global financial conditions, would also adversely affect external stability for the cash-strapped nation.

The fund stressed the need for timely post-program external financing disbursements.

Pakistan last month completed a short-term $3 billion program, which helped stave off sovereign default, but the government of Prime Minister Shehbaz Sharif has stressed the need for a fresh, longer term program.

Pakistan narrowly averted default last summer, and its $350 billion economy has stabilized after the completion of the last IMF program, with inflation coming down to around 17 percent in April from a record high 38 percent last May.

It is still dealing with a high fiscal shortfall and while it has controlled its external account deficit through import control mechanisms, it has come at the expense of stagnating growth, which is expected to be around 2 percent this year compared to negative growth last year.

Pakistan is expected to seek at least $6 billion and request additional financing from the Fund under the Resilience and Sustainability Trust. 


Gang mastermind, extradited from Pakistan, jailed for life for UK police officer killing

Updated 10 May 2024
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Gang mastermind, extradited from Pakistan, jailed for life for UK police officer killing

  • Piran Ditta Khan fled UK after Sharon Beshenivsky was shot at close range in Bradford in 2005
  • Khan, a former takeaway boss, was said to be the ringleader of the gang involved in the murder 

LONDON: A 75-year-old man who was extradited from Pakistan was jailed for life on Friday for the murder of a British police officer nearly 20 years ago.

Piran Ditta Khan fled the country after Sharon Beshenivsky was shot at close range as she and a colleague arrived at the scene of a robbery at a travel agency in Bradford, northern England, in 2005.

Although he did not pull the trigger, prosecutors at his trial said he was equally guilty of murder as he had planned the raid and knew that loaded weapons would be used.

Judge Nicholas Hilliard at Leeds Crown Court on Friday handed Khan a life sentence with a minimum term of 40 years and told him: “You will inevitably spend the remainder of your life in custody.”

Beshenivsky, 38, had only been an officer with West Yorkshire Police for nine months before her death, which happened on her daughter Lydia’s fourth birthday.

“Every birthday is a reminder of what happened that day,” Lydia said in an impact statement read in court.

“It has recently been Mother’s Day, and while my friends are celebrating with their mums, I sadly can never do that.”

She was “too young and innocent” to understand why her mother did not return from work to celebrate her birthday, the statement added.

Judge Hilliard praised Beshenivsky’s bravery in responding to the call “when she and her colleague had no way of knowing what they would be confronted with when they got there.

“Sharon Beshenivsky’s courage and commitment to duty that day cost her her life,” he added.

The rare fatal shooting of a police officer on duty caused widespread shock and revived calls for British police to routinely carry guns. 

Khan, a former takeaway boss, was said by prosecutors to be the ringleader of the gang involved in the killing on November 18, 2005.

He remained in a lookout car during the robbery, played a “pivotal” role in planning the heist and knew that loaded firearms would be used.

As such he was as culpable of Beshenivsky’s murder “as surely as if he had pulled the trigger on that pistol himself,” prosecutors told his trial.

He claimed he was trying to recoup money owed to him by the owner of the travel agency but lawyers said there was no evidence for this.

The gang escaped with little more than £5,000.

Khan was arrested in Islamabad in January 2020 after years on the run and extradited in April 2023.

He was found guilty of murder as well as firearms offenses. He had admitted robbery.

Six other gang members have previously been jailed over the shooting, which also saw Beshenivsky’s colleague Teresa Milburn shot in the chest.

Milburn, who was 37 at the time, had joined the force two years beforehand.

Three of the men, including one who fled to Somalia but was later extradited, were jailed for life and told they would serve at least 35 years behind bars.

West Yorkshire Police Assistant Chief Constable Patrick Twiggs said members of the force “welcome the life sentence handed down to Khan.

“West Yorkshire Police will continue to honor Sharon’s memory, we still mourn the loss, we still miss her, she will be forever in our thoughts,” he added.


Pakistan shares close weekend trading at all-time high on improving economic indicators, Saudi investments

Updated 10 May 2024
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Pakistan shares close weekend trading at all-time high on improving economic indicators, Saudi investments

  • KSE-100 index went up by 427 points and closed at 73,086 points on investor optimism
  • Analysts say Saudi crown prince’s visit could see stock market cross 85,000 level this year

KARACHI: Pakistan’s key stock index crossed the 73,000 mark on Friday to close the weekend trading session at an all-time high on renewed hopes of an interest rate cut and improving economic indicators as well as optimism about Saudi investments, analysts said.
 
The KSE-100 index went up by 427 points and closed at 73,086 points on investor optimism stemming from an anticipated lower inflation rate this month, which fueled speculation of an interest rate cut in the next monetary policy in June. 

Last month, the Monetary Policy Committee (MPC) of the State Bank kept the key interest rate steady at 22 percent for the seventh straight meeting.
 
“Pakistan stocks exchange made another new high today crossing 73,000 amid expectations that inflation may fall at a faster than expected rate,” Muhammad Sohail, CEO of Topline Securities, told Arab News, adding that optimism about Saudi investments had also played a key role in the bullish trend at the bourse in the last few days.
 
The Pakistan Stock market performed extremely well during the outgoing week and the index increased by around 1180 points.
 
“There are two to three reasons for this surge, first being the gradual improvement in Pakistan’s economic indicators,” Sheheryar Butt, Portfolio Manager at Darson Securities, said. 
 
The South Asian nation has witnessed increasing remittance by 28 percent to $2.8 billion while the central bank’s reserves soared above $9 billion, the highest in 1.5 years.
 
“Along with this, our currency is maintained at Rs278 against the US dollar and it is also stabilizing in the interbank market. We are also seeing an increase in remittances,” Butt said.
 
Pakistan saw one of the highest inflation regimes last year, with 38 percent inflation recorded in May last year, which eased to 17.3 percent this April. Pakistani analysts expect a further fall in May, renewing optimism of an interest rate cut from the current 22 percent in the upcoming monetary policy.
 
“Inflation in Pakistan is expected to decrease significantly to around 15 percent in May 2024. This substantial drop is a testament to the effective efforts of the government and central bank in curbing inflation,” Sohail added.
 
Talks with the International Monetary Fund (IMF) for a new bailout package and Saudi investment optimism have been key drivers of the stock index in recent days while the expected arrival of the Saudi Crown prince later this month is being seen as another “milestone achieving factor.”
 
“The IMF team is going to visit Pakistan and there are brighter chances for Pakistan to get a longer program with the IMF. Pakistan will easily get a program of $6-8 billion for 2-3 years,” Butt said, adding that the Saudi crown prince’s visit could see the stock market cross the 85,000 level this year.


Pakistan to play Japan in Azlan Shah Hockey Cup final tomorrow

Updated 10 May 2024
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Pakistan to play Japan in Azlan Shah Hockey Cup final tomorrow

  • This is first time Pakistan have advanced to tournament’s final since 2011
  • Pakistan have won the Azlan Shah Cup title thrice, in 1999, 2000 and 2003

ISLAMABAD: Pakistan remained unbeaten in the Azlan Shah Hockey Cup on Friday as their match against New Zealand ended in a tie and will take on Japan in the final tomorrow, Saturday. 

Pakistan are already through to the final which will take place at 5:30pm (PKT) on Saturday at the Azlan Shah Stadium in Ipoh. This is the first time Pakistan have advanced to the tournament’s final since 2011.

Friday’s match ended in a draw, with both teams securing one point each, the Pakistan Hockey Federation (PHF) said.

“Pakistan has managed to make it to the finals with a total of 11 points from five matches on the points table,” PHF said. “Pakistan won the bronze medal in the last event [Thursday] by winning the third place match. The final match between Pakistan and Japan will be played tomorrow [Saturday].”

Six teams are participating in the event, including host team Malaysia, Pakistan, Korea, Japan, New Zealand and Canada. 

Pakistan have won the Azlan Shah Cup title thrice — in 1999, 2000 and 2003 — and came third in the last edition which was also held in Ipoh in 2022. Malaysia are the defending champions of this year’s edition.

Addressing the squad via video link, Information Minister Attaullah Tarar reiterated the government’s commitment to hockey, state-run Radio Pakistan said, adding that the prime minister had ordered focusing on removing obstacles in the development of hockey in Pakistan.

“The entire nation is praying for the victory of Pakistan and is looking forward to welcome a champion team,” Tarar said. 

Pakistan is now 18th in hockey rankings after being consistently among the top four and winning a record four World Cups. The nation has not won a single hockey medal at the Olympics since 1992.


Amid privatization push, Pakistan says profit-making public entities also being considered for sale

Updated 10 May 2024
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Amid privatization push, Pakistan says profit-making public entities also being considered for sale

  • South Asian nation is striving to deliver reforms amid talks with IMF for new bailout loan package
  • Cabinet Committee on Privatization has in principle approved 24 entities for Privatization Programme

KARACHI: The office of Pakistan’s deputy prime minister said on Friday even profit-making state owned enterprises (SOEs) would be considered for privatization as the South Asian nation strives to deliver reforms amid talks with the International Monetary Fund for a new bailout package.

Under the last $3 billion bailout package from the IMF that was critical in averting a sovereign debt default last year, the lender has said state-owned entities whose losses are burning a hole in government finances would need stronger governance. Pakistan is now negotiating with the IMF for a larger, longer program for which it must implement an ambitious reforms agenda, including the privatization of debt-ridden SOEs. 

“CCOP emphasized that even the SOE making profits shall be considered for privatization,” a statement from the deputy prime minister’s office said, referring to a meeting of the Cabinet Committee on Privatization (CCOP). 

Among the top profit-making SOEs are Oil and Gas Development Company Limited, Pakistan State Oil Company Limited, Pak Arab Refinery Company, Pakistan Petroleum Limited, the National Bank of Pakistan, National Power Parks Management, the Government Power Holding Limited, Mari Petroleum and Neelum Jhelum Hydro Power Limited.

“CCOP, while approving 24 entities for the Privatization Programme, in-principle, for the time being, directed Ministry of Privatization to deliberate the phasing of each entity in consultation with the respective Ministries,” the statement added. 

Among the main entities Pakistan is pushing to privatize is its national carrier, PIA. The government is putting on the block a stake ranging from 51 percent to 100 percent. 

The disposal of the flag carrier and other entities like a sprawling steel mill in Karachi is a step that past elected governments have steered away from as it is likely to be highly unpopular, but progress on the privatization will help cash-strapped Pakistan pursue further funding talks with the IMF.