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Inflation in Pakistan could average 33% in first half of 2023 – Moody's economist

This picture taken on January 30, 2023 shows residents buying vegetable at a market in Pakistan's port city of Karachi. (AFP)
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Updated 15 February 2023
Reuters
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Inflation in Pakistan could average 33% in first half of 2023 – Moody's economist

  • Economic analyst says bailout from IMF alone is unlikely to put Pakistan's economy back on track
  • Says South Asian country's economy really needs is persistent and sound economic management
Updated 15 February 2023
Reuters

MUMBAI/ISLAMABAD, Feb 15 : Inflation in Pakistan could average 33 percent in the first half of 2023 before trending lower, and a bailout from the International Monetary Fund alone is unlikely to put the economy back on track, a senior economist with Moody’s Analytics told Reuters.

“Our view is that an IMF bailout alone isn’t going to be enough to get the economy back on track. What the economy really needs is persistent and sound economic management,” senior economist Katrina Ell said in an interview on Wednesday.

“There’s still an inevitably tough journey ahead. We’re expecting fiscal and monetary austerity to continue well into 2024,” she added.

Pakistan government and the IMF could not reach a deal last week and a visiting IMF delegation departed Islamabad after 10 days of talks, but said negotiations would continue. Pakistan is in dire need of funds as it battles a wrenching economic crisis.

An agreement on the ninth review of the program would release over $1.1 billion of the total $2.5 billion pending as part of the current package agreed in 2019 which ends on June 30. The funds are crucial for the economy whose current foreign exchange reserves barely cover 18 days worth of imports.

“Even though the economy is in a deep recession, inflation is incredibly high as (result of) part of the latest bailout conditions,” Ell said.

“So what we’re expecting is that through the first half of this year, inflation is going to average about 33 percent and then might trend a little bit lower after that,” she added.

The consumer price index rose 27.5 percent year-on-year in January, its highest in nearly half a century.

Low income households could remain under extreme pressure as a result of high inflation on account of being disproportionately exposed to non-discretionary items.

“Food prices are high and they can’t avoid paying for that, so we’re going to see higher poverty rates as well feed through,” the economist said.

NO OVERNIGHT FIX

Ell said Pakistan has not has a great track record when it comes to IMF bailouts, so infusing additional funds alone may prove to be of little use.

“If we’re going to see any improvement, it’s going to be very gradual. There’s just no overnight fix,” she said.

The weaker rupee, which is plumbing record lows, is adding to imported inflation while domestically high energy costs on the back of tariff increases and still elevated food prices is likely to keep inflation high.

Moody’s expects economic growth for the 2023 calendar year of around 2.1 percent.

“It is likely that we will see further monetary tightening in Pakistan to try and stabilize inflation and also with the weakness in the FX they might kind of intervene there to try and force in stability, but again it’s not going to be a silver bullet,” Ell said.

Last month, the central bank raised its key interest rate by 100 basis points (bps) to 17 percent in a bid to rein in persistent price pressures. It has raised the key rate by a total of 725 bps since January 2022.

With significant recession-type conditions in Pakistan, skyrocketing borrowing costs could really exacerbate domestic demand struggles, she said.

“You really need to see sustained sound macroeconomic management, and just injecting further funds in there without decent backing is not going to deliver the results that you’re looking for.”

Topics: Pakistan Moody's Inflation Pakistan economy

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Pakistan accuses Iran-backed militants of 17 sectarian killings between September 2023 to February

Updated 26 min 18 sec ago
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Pakistan accuses Iran-backed militants of 17 sectarian killings between September 2023 to February

  • United States Treasury placed Zainabiyoun Brigade on its financial blacklist in January 2019
  • Pakistan’s interior ministry designated Zainebiyoun Brigade a “terrorist” organization in April 
Updated 26 min 18 sec ago
NAIMAT KHAN

KARACHI: The Counterterrorism Department (CTD) in Pakistan’s southern Sindh province said on Thursday the Iran-backed Zainabiyoun Brigade had carried out at least 17 sectarian killings in Karachi between last September to February this year, which were previously believed to be incidents of street crime.
The US Treasury placed the Zainabiyoun Brigade on its financial blacklist in January 2019 as part of a “pressure campaign to shut down the illicit networks the (Iranian) regime uses to export terrorism and unrest across the globe.” 
Many of the group’s fighters are believed to have been recruited from Pakistan by Iran’s Islamic Revolutionary Guard Corps and its Basij militia, and trained for operations in the Syrian civil war, which broke out in 2011. 
Some of the recruits have since returned to Pakistan, especially during COVID-19 pandemic closures, authorities say, prompting them to step up their crackdown on the group’s activities. Islamabad banned the group last month, saying it was a potential threat to security. 
“In the last few months of 2023 and the first few months of 2024, there was a sudden increase in targeted killings in Karachi, which initially appeared to be deaths due to resistance in street crimes,” a CTD statement released on Thursday said.
“When the CTD investigated these incidents, it was found that from September 2023 to February 2024, in addition to street crimes, there were nearly 17 sectarian targeted killings … Upon further technical and forensic investigation of the network involved, it was revealed that terrorists from the banned organization Zainabiyoun were involved in these acts of terrorism.”
The CTD said local militants belonging to the group were getting their targets, funds and other facilities from a man named Syed Hussain Mousavi alias Muslim who used one group to perform reconnaissance and another to take out targets. 
According to the CTD, sectarian killings carried out by the group had stopped in the city after two Zainabiyoun militants, Waqar Abbas and Hussain Akbar, were jailed following their arrest in a case involving the possession of illegal weapons.
Another team of sectarian killers originally from Gilgit-Baltistan had gone underground since the arrest of their accomplices, the statement said. 
In January, the CTD in Sindh said it had arrested a “trained terrorist” belonging to the Zainabiyoun Brigade in Karachi who was accused of an assassination attempt on a top Pakistani cleric.
Mufti Muhammad Taqi Usmani, a former Pakistan top court judge and a permanent member of the Organization of Islamic Cooperation’s International Islamic Fiqh Academy, narrowly escaped the assassination attempt in the port city in March 2019. The attack had killed two of Usmani’s guards and wounded a fellow religious scholar, Maulana Amir Shahabullah.
Karachi, a metropolis of 20 million that hosts the stock exchange and central bank, has for decades been beset by armed violence. 
While an armed campaign by the military, with help from police, paramilitary Rangers and intelligence agencies, against armed gangs and suspected militants in the city brought down murder rates after 2013, street crimes have been on the rise again since last year, with shooting deaths in muggings and robberies once again becoming a daily headline.

Topics: Pakistan Iran Pakistan Iran border

Pakistan says offering ‘most cost-effective’ Hajj package in region

Updated 44 min 48 sec ago
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Pakistan says offering ‘most cost-effective’ Hajj package in region

  • Pakistan has a Hajj quota of 179,210 pilgrims this year
  • 63,805 people to undertake pilgrimage on government scheme
Updated 44 min 48 sec ago
Arab News Pakistan

ISLAMABAD: Zia-ur-Rehman, the director of the Pakistan Hajj Mission in Madinah, has said the government was offering its citizens the ‘most cost-effective’ Hajj package among regional countries through its official scheme, state media reported on Thursday.
Pakistan has a Hajj quota of 179,210 pilgrims this year, of which 63,805 people will perform the pilgrimage under the government scheme while the rest will use private tour operators. This year’s Hajj is expected to run from June 14-19.
“This [Pakistan] package is priced at 14,300 Saudi Riyals, which includes meals, whereas comparatively neighboring India’s package costs 15,000 Saudi Riyals without meals,” Rehman said in an interview with the APP news agency.
“This price difference highlights the efforts of the Pakistani government to make the Hajj pilgrimage more accessible and affordable for its citizens. The package duration is 40 days, and there is a minimum expense of 1,400 Riyals per pilgrim.”
Rehman said the Pakistan Hajj Mission had made “elaborate food arrangements” for intending pilgrims who would perform Hajj under the government scheme and were currently staying in Madinah.
Seven top catering companies operating in Madinah had been selected to provide three meals a day to the guests after a competitive bidding process which 29 companies took part in.
“The hiring process, initiated in November last year following approval from the federal cabinet, was completed in due course of time, ensuring quality food and hygiene standards at a rate of 35 Saudi Riyal per person,” Rehman said.
“Designated officials have been deployed in the kitchens of the catering companies to closely monitor the entire process, from storing meals to transporting food in refrigerated units for distribution to pilgrims at their residences, under close scrutiny.”
Pakistan’s religion ministry has confirmed that over 15,000 pilgrims from the country had already arrived in Saudi Arabia ahead of the Hajj pilgrimage since a Hajj flight operation started on May 9. The government has also set up two control rooms, one each in Makkah and Madinah, to facilitate pilgrims.

Topics: Hajj 2024 Pakistani Hajj pilgrims

Climate change effects reduce Pakistan mango production for third consecutive year — union

Updated 16 May 2024
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Climate change effects reduce Pakistan mango production for third consecutive year — union

  • Export target for mangoes reduced from last year’s 125,000 metric tons to 100,000 
  • Union calls on government to develop new mango varieties compatible with climate change
Updated 16 May 2024
KHURSHID AHMED   

KARACHI: The All Pakistan Fruit and Vegetable Exporters Association said on Thursday there was a “significant reduction” in mango production for a third consecutive year due to climate change, which meant the country may not be able to meet its export targets.
The Association has set a target of 100,000 metric tons of mango exports in the current season, with exports expected to start from May 20 with a focus on China, America, Turkiye, Japan, Iran, Afghanistan and Central Asia.
“The impact of climate change is having a pronounced negative impact on mango orchards in Pakistan, leading to a significant reduction in production and due to non-availability of export quality mangoes, the export target could not be attained last year as well,” Waheed Ahmed, patron-in-chief of the All Pakistan Fruit and Vegetable Exporters Association, said in a statement. 
“This year the export target has been set at 100,000 metric tons, whereas last year the export target was 125,000 metric tons but the export of mango remained at 100,000 metric tons.”
Pakistan produces around 1.8 million metric tons of mangoes annually, of which 70 percent are produced in Punjab province, 29 percent in Sindh and one percent in Khyber Pakhtunkhwa. 
“This year, due to weather effects, the production of mango in Punjab is 35-40 percent, while in Sindh it is less than 20 percent and thus the total production is feared to be reduced by 0.6 million metric tons,” Ahmed said. “This estimate was made at the start of production and is likely to increase further as the season progresses.”
With an export target of 100,000 metric tons of mangoes during the current season, Pakistan could earn foreign exchange of $90 million, Ahmed said, adding that the sector, including mango processing, packaging and warehousing, was an over Rs100 billion industry that provided employment to millions of people. 
“The sector is facing problems due to significant increases in costs of electricity, gas, transportation, garden maintenance, pesticides and water management, making it difficult to compete for exports,” Ahmed said.
“The effects of climate change have emerged as the biggest threat to mango production, which can well be gauged from the fact that mango production has declined for the third year in a row.”
Ahmed said long winters, rains and hail, combined with severe heat waves, had changed the pattern of agricultural diseases in Pakistan:
“There is certainly a lack of serious efforts at the federal and provincial levels to protect the agricultural sector from the effects of climate change, particularly through research enabling the orchards of mangoes and other fruits to develop sufficient endurance to sustain against the tough weather conditions and reduction in disease resistance. Research-based solutions must be found urgently to address this, otherwise mango production and export will be at risk.”
The association called on federal and provincial agricultural research centers to work on an emergency basis to help farmers deal with the effects of climate change.
“In order to continue the production and export of mangoes, it is imperative to develop new varieties of mangoes that are compatible with the climatic changes in Pakistan,” Ahmed said.
“Similarly, prevention of diseases and supply of suitable agricultural pesticides are also needed to minimize the effects of climate change.”

Topics: Pakistani Mangoes pakistan climate change

As Pakistan deputy PM visits Beijing, Islamabad vows to track masterminds of attack on Chinese workers

Updated 25 min 55 sec ago
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As Pakistan deputy PM visits Beijing, Islamabad vows to track masterminds of attack on Chinese workers

  • Ishaq Dar reaffirms Pakistan’s commitment to the regional connectivity initiative launched by China’s Xi Jinping
  • The two countries express satisfaction at their expanding space cooperation and agree to build on it further
Updated 25 min 55 sec ago
SAIMA SHABBIR

ISLAMABAD: Pakistan vowed to pursue the masterminds behind a suicide attack that claimed the lives of five Chinese engineers earlier this year while reaffirming its commitment to the regional connectivity initiative launched by President Xi Jinping’s administration during Deputy Prime Minister Ishaq Dar’s three-day visit to Beijing.
According to a statement issued by the foreign office of Pakistan on Thursday, Dar, who is also the foreign minister, began his trip to China on May 13 where he co-chaired the Fifth Round of China-Pakistan Foreign Ministers’ Strategic Dialogue with his counterpart Wang Yi before concluding his visit.
During his stay in Beijing, the two sides discussed multiple global and regional challenges, including the second phase of the multibillion-dollar China-Pakistan Economic Corridor (CPEC).
The foreign office said both countries condemned the March 26 suicide attack on the Chinese workers who were on their way to the Dasu Hydropower Project in the northwestern Khyber Pakhtunkhwa province.
“In keeping with its ironclad friendship with China, the Pakistani side would hunt down the perpetrators and bring them to justice, take more effective security measures, and make all-out efforts to ensure the safety of Chinese personnel, projects and institutions in Pakistan,” the statement said while providing details of the discussions between both countries.
Pakistan’s military spokesperson, Maj. Gen. Ahmed Sharif, said last week the attack was planned in “terrorist sanctuaries” in neighboring Afghanistan while addressing a news conference.
His assertion came amid accusations from officials in Islamabad that the administration in Kabul was not doing enough to prevent groups like banned Tehreek-e-Taliban Pakistan (TTP) from launching cross-border attacks.
“The two sides reiterated their commitment to combating terrorism in all its forms and manifestations with a ‘zero tolerance’ attitude, and agreed to further strengthen cooperation in counter-terrorism and security through a comprehensive approach,” the foreign office continued.
Pakistan also agreed to work with China to support high-quality Belt and Road cooperation and forge an upgraded CPEC version by jointly building growth, livelihood, innovation and green corridors and aligning them with Pakistan’s development framework and priorities.
“The two sides agreed to accelerate progress on major connectivity projects including upgradation of ML-1 [railway infrastructure], the Gwadar Port, realignment of Karakoram Highway Phase II, strengthen cooperation in agriculture, industrial parks, mining, information technology and other fields according to local conditions, and enhance Pakistan’s capacity for sustainable development,” the foreign office informed.
“The two sides believe that the Khunjerab pass plays an important role in promoting bilateral trade and people-to-people exchanges, and agreed to speed up efforts to make sure that the Khunjerab Pass can function all year round,” it continued.
The two sides also agreed to strengthen communication and coordination over issues related to Afghanistan, calling for concerted efforts of the international community to help deal with the humanitarian situation in that country.
They agreed to play a positive and constructive role in helping Afghanistan achieve stable development and integrate into the international community.
Additionally, Pakistan and China expressed satisfaction at their expanding space cooperation and agreed to further build on it for a peaceful and mutually-beneficial exploration of space.
Earlier this month, Pakistan sent an imaging device in outer space as part of China’s Chang’e-6 lunar mission.

Topics: Pakistan china

Pakistan establishes Hajj control rooms in Makkah, Madinah to facilitate pilgrims

Updated 16 May 2024
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Pakistan establishes Hajj control rooms in Makkah, Madinah to facilitate pilgrims

  • Around 15,819 Hajj pilgrims have arrived in Saudi Arabia weeks before Hajj 2024 kicks off 
  • Hajj control rooms in Makkah and Madinah are open 24 hours a day, says Pakistani official
Updated 16 May 2024
SAIMA SHABBIR

ISLAMABAD: Pakistan has established two control rooms, one each in the holy cities of Makkah and Madinah to facilitate Hajj pilgrims, the religion ministry confirmed on Wednesday, as thousands of Pakistanis continue to arrive in Saudi Arabia ahead of the annual Islamic pilgrimage. 
Pakistan’s Ministry of Religious Affairs (MoRA) has confirmed that around 15,819 pilgrims from the country have arrived in Saudi Arabia weeks before the Hajj begins. 
This year, 179,210 Pakistanis will perform Hajj under government and private schemes. Pakistan kicked off a month-long flight operation last week. Five airlines— PIA, Saudi Airlines, Airblue, Serene Air, and Air Sial— will operate 259 flights from eight major Pakistani cities to Jeddah and Madinah till June 9.
The government intends to facilitate thousands of Pakistani pilgrims through Hajj control rooms to ensure their pilgrimage remains free from hassles.
“We have established two control rooms: a main control room in Makkah and a branch office in Madinah to facilitate the pilgrims,” Muhammad Umer Butt, a religious affairs ministry spokesperson, told Arab News via phone from Madinah.
He said both control rooms in Makkah and Madinah would facilitate pilgrims 24 hours throughout the day. 
“All pilgrims are provided with a card they wear for identification, and on the back of each card, the control room numbers are listed so they can contact the control room by phone in case of any emergency or complain,” Butt explained. 
He said this year Pakistan has followed the Saudi government’s lead in digitizing Hajj through the Pak Hajj mobile application. Butt said the app provides all necessary information, including the ability to lodge complaints and track their status. 
“We have a live dashboard established in the control room under the complaint management system which showed all the details of complaints received and solved, movement of the pilgrims and other general queries,” he shared.
During the last seven days, the spokesperson said 195 complaints received through the Pak Hajj mobile app have been resolved, and 25 pilgrims who lost their way to their respective destinations in the holy cities were guided.
He added that the Loss and Found department located 111 bags and seven wheelchairs which were handed over to their owners. 
Butt said as Pakistani Hajj pilgrims were currently arriving in Madinah, the control room there was more active compared to the one in Makkah and was staffed with 54 personnel, and 18 Hajj assistants (Muaveneen). 
“These pilgrims will go to Makkah from May 17 after their eight-day stay in Madinah,” he said.
Butt said the Makkah control room was staffed with only eight people as Pakistani pilgrims have not started to arrive in the holy city yet.
“Along with this all adviseries issued by the Saudi government and Pakistani Hajj mission are also uploaded on the application through these control rooms,” he said.

Topics: Hajj 2024 Pakistan Hajj mission Pakistani Hajj pilgrims

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