Pakistan’s progressive policies uplift the national economy

Pakistan’s GDP rate was estimat ed to be 2.9 percent against the targeted growth of 2.1 percent. (AFP file photo)
Pakistan’s GDP rate was estimat ed to be 2.9 percent against the targeted growth of 2.1 percent. (AFP file photo)
Short Url
Updated 14 August 2021

Pakistan’s progressive policies uplift the national economy

Pakistan’s progressive policies uplift the national economy

Pakistan’s economy is moving progressively on a higher inclusive and sustainable growth path on the back of various measures and resultant achievements despite a myriad of challenges.

Pakistan implemented a policy of stabilization following the national economic crisis of 2017-18 and the economy recovered from macroeconomic imbalances, but the coronavirus (COVID-19) pandemic slowed down the pace. The economy recovered initially but the second and third waves of the virus posed serious challenges, which were met by the incumbent federal government with its timely prudent policies.

The national economy of Pakistan already had a volatile growth pattern over the years marked by regular boom-and-bust cycles, which posed challenges in achieving long-term and inclusive growth. Against the backdrop of a host of challenges, the present government focused on an economic vision of securing sustainable economic growth through improved efficiency, reduced cost of doing business, better regulatory environment, enhanced  productivity, and increased investment.

During the past three years of the incumbent federal government, it had faced numerous economic challenges which were somehow aggravated by the pandemic. However, the federal government has quite successfully progressed from recovery and stabilization of the national economy to its sustainable growth.

The impact of the federal government’s timely and appropriate measures is very much visible in the form of an economic recovery on the back of broad-based growth across all sectors.

Some other achievements reported over the past year include:

Pakistan’s gross domestic product (GDP) rate was estimated to be 2.9 percent against the targeted growth of 2.1 percent through the policy initiatives.

Besides extending the economic stimulus for the fiscal year in 2021, an amount of Rs155 billion was also released to mitigate the socio-economic impacts of the pandemic.

Home remittances by overseas Pakistanis grew significantly.

The current account balance showed improvement.

The country’s exports also showed an appreciable turnaround.

Furthermore, the World Bank recognized the Ehsaas Emergency Cash Program as being among the top four social protection interventions in the world in terms of the number of people it covered. The International Monetary Fund (IMF) also said government policies have been crucial in supporting the national economy during the COVID-19 pandemic.

In alignment with Sustainable Development Goals (SDGs), the federal government is placing a high emphasis on poverty alleviation through urban development, affordable housing, access to mass media, and more. According to the Ministry of Finance, the government has invested in 17 sectors that aim to alleviate poverty.

Social protection has a central role to play in addressing the social, economic, and health dimensions of the COVID-19 crisis.

Pakistan’s largest social protection initiative, Ehsaas, includes more than 260 policies. The Ehsaas Emergency Cash Program provided Rs 179.8 billion to more than 15 million families across Pakistan. The Ehsaas Roshan Portal linked donors from the private sector and civil society organizations with beneficiaries in need of basic food.

For this coming fiscal year, expect improvements in the global economy as the pandemic will subside with the expansion of the COVID-19 vaccine rollout. There is an anticipation of favorable weather conditions as the GDP is targeted to grow at 4.8 percent. The agriculture sector is likely to grow by 3.5 percent based on the revival of cotton, water availability, certified seeds, fertilizers, pesticides, and agriculture credit facilities.

The industrial sector is expected to maintain its momentum and is targeted to grow at 6.2 percent. This forecast is based on sustained large-scale manufacturing, a collateral-free credit guarantee scheme, and construction with spillovers in allied industries. The service sector is also set to grow by 4.7 percent on the back of the envisaged growth in the agriculture and industry sectors.

On the fiscal and monetary front, average inflation is targeted to remain within 8 percent on the basis of expected adjustments in energy tariffs while high global food and commodity prices may stay high.

On the external front, imports are expected to grow significantly by 9.5 percent. However, the robust growth in home remittances (10 percent) and modest growth in exports (6.5 percent) are likely to offset the imports. Thus, the current account deficit is projected to remain around 0.7 percent of the GDP. However, building capabilities and providing opportunities through public investment will alleviate widespread unemployment in the country and sustain the national economy’s growth momentum.

With a number of socio-economic initiatives being pushed with the aim to maintain national economic growth, the Pakistan government is determined to expand the social protection network to cover a maximum number of vulnerable segments in the society. The country’s economy is moving forward from stability to growth as there are signs of hope and progress.

•  Mohammed Zahid Rifat is Lahore-based freelance journalist, columnist, and retired deputy controller (news) at Radio Pakistan, Islamabad.

DWF Group to open regional headquarters in Riyadh, says global CEO

DWF Group to open regional headquarters in Riyadh, says global CEO
Updated 27 October 2021

DWF Group to open regional headquarters in Riyadh, says global CEO

DWF Group to open regional headquarters in Riyadh, says global CEO

RIYADH: DWF Group, UK’s largest listed legal business, will set up its regional headquarters in Saudi Arabia’s capital Riyadh.

Sir. Nigel Knowles, the group’s global CEO, made the announcement at the Future Investment Initiative in Riyadh on Wednesday.

“We’re here in Riyadh, and it’s great to be back once again to announce that we’re going to make Riyadh our regional headquarters for our Mindcrest and connected businesses to offer those professional services to businesses in the region,” Knowles told Arab News.

“But specifically Saudi Arabia, which is a very dynamic country and we’re absolutely certain that we can be relevant to all the people and businesses here with positive outcomes for everyone,” he added.

He explained that the group is  divided into three divisions on a global basis.

“One is legal advisory, which is the traditional law firm services, the next one is Mindcrest, which deals with document management, e-discovery and a whole heap of money services requirements for clients,” he said.

They also have a connected services business which offers a whole range of services which are not legal services, but closely connected to legal services. 

“So we’ve got three offerings effectively, which makes us a legal business, not a law firm,” he said.

Mohab Khattab, DWF Arabia’s incoming CEO, said DWF is a very unique law firm as it is publicly traded and for what it offers in its three different types of businesses. 

“One is legal advisory — but what we’re doing for Saudi Arabia is we’re working in association with a local law firm to provide legal advisory services,” he told Arab News.

“The other two are more of quasi legal types of services, almost consulting like services. The first one is through a company called Mindcrest, which provides managed legal services. So, for example, offering contracts, management, risk management or compliance types of services — and so this offers a more commercially oriented service to the client that is very unique to  Saudi Arabia and actually the region,” he added.

Khattab said the existing operations with Dubai and with Doha will now come under the Saudi regional headquarters.

“The other, which is the third business, is called connected, and we’re offering them through applications, even mobile applications for companies,” he said.

“So for example, corporate governance, types of services for companies, services, for example, for companies who have incidence management. So as an example, an insurance company can use this for their insurance investigators for accidents or, for example, any kind of incidents at an industrial complex,” he explained.

Bitcoin slips on profit-taking but on track for biggest gain in 8 months

Bitcoin slips on profit-taking but on track for biggest gain in 8 months
Updated 27 October 2021

Bitcoin slips on profit-taking but on track for biggest gain in 8 months

Bitcoin slips on profit-taking but on track for biggest gain in 8 months

LONDON: Bitcoin fell on Wednesday to its lowest level in 1-1/2 weeks, taking losses since hitting a record high last week to around 12 percent — though the digital currency is still on track for its best month since February.

Bitcoin, the world’s largest cryptocurrency, fell as much as 3.7 percent to $58,100, its lowest since Oct. 15. It has lost 12.1 percent since it hit an all-time high of $67,016 on Oct. 20.

By 1413 GMT, bitcoin was trading down 2.3 percent at $58,965. Smaller coins such as ethereum and ripple which tend to move in tandem with bitcoin also fell between 3.5-7 percent.

Bitcoin’s losses were down to traders taking profit from its recent rally, said Tony Sycamore, analyst at City Index. The digital currency has notched up gains of almost 35 percent so far this month, which if maintained would be its best performance in eight months.

Bitcoin is facing “a short-term downtrend,” said Du Jun, co-founder of major crypto exchange operator Huobi Group, adding that further falls may be limited given relatively low trading volumes.

Oil drops more than 1% as US stockpiles rise sharply

Oil drops more than 1% as US stockpiles rise sharply
Updated 27 October 2021

Oil drops more than 1% as US stockpiles rise sharply

Oil drops more than 1% as US stockpiles rise sharply

NEW YORK: Oil prices fell on Wednesday after US crude oil stockpiles rose more than expected, even as fuel inventories dropped and tanks at the nation’s largest storage hub emptied further.

The bigger-than-expected rise in US crude stocks gave some investors an impetus to unload long positions after strong gains in recent weeks brought both the Brent and US crude benchmarks to multiyear highs.

Brent oil futures were down $1.89, or 2.2 percent, to $84.51 a barrel as of 1:02 p.m. EDT (1702 GMT), after ending at a seven-year high on Tuesday. US West Texas Intermediate crude lost $1.97, or 2.3 percent, to $82.68 a barrel.

Both benchmarks closed on Friday with a seventh straight weekly gain as major producers hold back supply and demand rebounds after the easing of pandemic restrictions.

Crude oil inventories rose by 4.3 million barrels last week, according to the US Energy Department, more than the expected 1.9 million-barrel gain. Gasoline stocks dropped by 2 million barrels, bringing them to levels not seen in nearly four years, as US consumers grapple with rising prices to fill their vehicles’ tanks.

Storage tanks at the WTI delivery hub in Cushing, Oklahoma, are more depleted than they have been in the past three years, with prices for longer-dated futures contracts pointing to supplies staying at those levels for months.

The selling on Wednesday was more pronounced in Brent, continuing a narrowing in the discount between WTI and the international benchmark as inventories at the Cushing hub have dropped sharply.

“The market continues to deplete Cushing crude oil inventories and that is impacting the Brent-WTI spread and ultimately we're going to see crude oil diverted from the Permian up to Cushing rather than going to the Gulf Coast,” said Andrew Lipow, president of Lipow Oil Associates in Houston.

However, a patchy recovery around the world from the worst health crisis in 100 years, has often led to doubts over the sustainability of oil prices.

“(Some) countries are falling into an autumn COVID-19 case spike,” said Louise Dickson, senior oil markets analyst at Rystad Energy, “which poses downside risk for oil demand growth in the very near-term and could provide a soft pressure on oil prices.”

Petrochemical shares lead TASI decline by 0.33%: Market wrap

Petrochemical shares lead TASI decline by 0.33%: Market wrap
Updated 27 October 2021

Petrochemical shares lead TASI decline by 0.33%: Market wrap

Petrochemical shares lead TASI decline by 0.33%: Market wrap

RIYADH: Falling petrochemical shares saw the Tadawul All-Share Index finish down by 39 points on Wednesday, or 0.33 percent, closing at 11,807 points.

The market's decline was led by SABIC, which fell by 1.2 percent. 170 company shares in total were down, led by Petro Rabigh, after it fell to the minimum. This coincided with the company's announcement of profits of SR221 million.

174.4 million of shares changed hands in 298.000 deals, with heavy trading in Saudi Aramco, AlRajhi Bank, National Industrialization Co. 27 company shares rose during today's session, led by Banque Saudi Fransi, and Herfy's share, which rose by 2.8 percent.

Atheeb Telecom recorded its lowest close since last February, after the stock fell today by 9.1 percent. Also, Riyad Bank's profits increased to SR4408 million or 15 percent by the end of September. Saudi Aramco recorded a gain of 0.8 percent, which is the highest closing since December 2019. 

Arab Sea recorded the highest closing since its debut at SR171 amid trading of about 540,000 shares. Among the other risers, Banque Saudi Fransi's shares were up by 4 percent after it announced profits in the third quarter grew 172 percent to reach SR907 million.

The parallel market index Nomu ended the day down 39.01 points, or 0.16 percent. It closed at 23,912.22 points, after 1,114 trades.

UK’s more positive growth forecast ; US to introduce a 'billionaires tax:' Economic wrap

UK’s more positive growth forecast ; US to introduce a 'billionaires tax:' Economic wrap
Updated 27 October 2021

UK’s more positive growth forecast ; US to introduce a 'billionaires tax:' Economic wrap

UK’s more positive growth forecast ; US to introduce a 'billionaires tax:' Economic wrap

RIYADH: Britain’s economy is expected to grow by 6.5 percent in 2021, the country’s Chancellor of the Exchequer, Rishi Sunak, said in his Budget speech to parliament on Wednesday. This is a considerable revision from March’s forecast of 4 percent.

As for 2022, the economy is predicted to expand by a slightly lower 6 percent, the Chancellor added. 

The country’s inflation rate is also expected to average at 4 percent for the next year, up from the current 3.1 percent. This is driven by rising energy costs and supply shortfalls.

Moreover, Sunak announced that around £6 billion ($8.2 billion) will be delivered to the National Health Service as it struggles with the mounting number of Covid-19 patients in the country.

Germany’s economy forecasts

Meanwhile, Germany's economic growth forecast was sharply cut to 2.6 percent for 2021, down from April’s prediction of 3.5 percent, the German government said. 

This was mainly driven by distortions in the supply chain as well as hikes in energy prices.

However, the forecast for next year was favorably altered to 4.1 percent up from the former expectation of 3.6 percent, the government added.

The economy ministry also said in a statement that inflation is forecast to reach 3 percent in 2021 but will taper off in the coming years. This will be the highest level since 1993. Inflationary pressures in global energy prices and supply disruptions contributed to the rise in consumer prices.

Price inflation is expected to be 2.2 percent in 2022 and 1.7 percent in 2023.

US Senate introduces 'billionaires tax'

American billionaires are set to pay taxes on unrealized gains from their assets in order to finance Joe Biden’s social policy and climate change legislation, according to the top Senate Democrat for tax policy. 

The legislation is expected to cost about $1.5-2 trillion.

The so-called “billionaires tax” is a part of a wider plan that also includes an anticipated 15 percent minimum corporate tax rate on the country’s most profitable companies.

Canada’s interest rate decision

Canada’s central bank held its interest rate at 0.25 percent. This comes at a time when the country grapples with the highest inflation rate since February 2003. The annual rise in consumer prices sat at 4.4 percent in September.

Morocco enters the global debt market

To provide around 20 percent of Morocco’s financing needs in its 2022 budget, its government plans to enter the global debt markets, Asharq reported citing Morocco’s Minister of Economy and Finance.

Based on the 2022 pre-budget statement, the country needs around MAD105 billion ($11.6 billion) in financing. It also needs to petition the parliament in order to increase the government's external debt ceiling to MAD40 billion ($4.4 billion).

Meanwhile, the pre-budget statement also expects a rise in total public spending by 9 percent to reach MAD519 billion ($57.2 billion). Additionally, the budget deficit is predicted to slip next year to 5.9 percent of GDP from the 6.2 percent expected for this year, the government said last week.

Mexico’s trade deficit

The trade deficit in Mexico was $2.4 billion in September, falling from a surplus of $4.4 billion in the same month from last year, according to the country’s official statistics agency.

Imports to the country leaped by 29.1 percent to $44.1 billion, driven by purchases of intermediate goods and consumer goods which grew by 28.6 percent and 35.9 percent respectively.

This was accompanied by a lower growth in exports which rose by 8.2 percent only to reach $41.7 billion. The increase was largely accounted for by a 5.9 percent jump in non-oil exports as well as a 6.1 percent rise in exports of manufactured products.

Brazil’s unemployment

Brazil's unemployment rate fell to 13.2 percent in the three months ending in August, down from 13.7 percent in May-July, official data revealed. This is the lowest unemployment level since May 2020.

In addition, the country’s participation rate rose to 58.6 percent.