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)
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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.


Middle East investors eye London property on back of weak pound

Middle East investors eye London property on back of weak pound
Updated 10 August 2022

Middle East investors eye London property on back of weak pound

Middle East investors eye London property on back of weak pound
  • Thanks to the favorable exchange rate, a £1 million home in London that would have cost $1.7 million in 2014 currently costs only about $1.2 million
  • Exchange rate forecasts predict sterling will strengthen against the dollar between now and 2026, suggesting that now is the perfect time for overseas buyers to take the plunge

LONDON: The declining strength of Sterling has created a window of opportunity in London for investors from the Middle East, according to property consultancy JLL.

Sterling buyers are paying 35 percent more now for London properties than they were eight years ago but those purchasing in US dollars are paying 3.8 percent less.

In June 2014, a US buyer would have had to pay $1.7 million for a £1 million property in London. The weaker pound means at the end of June this year, a £1 million property in the city would have cost only $1.2 million.

Exchange rate forecasts from Oxford Economics predict the pound will strengthen against the dollar between now and 2026, suggesting that this is the perfect time for overseas buyers to take advantage of the currency-exchange benefits that are available.

Analysis of passenger arrivals at London’s Heathrow Airport show that the number of visitors from the Middle East has recovered to pre-pandemic levels. In fact, the number of passengers arriving from the region in May was 1 percent higher than the pre-pandemic average, and 2 percent higher in June.

“The weaker sterling, alongside the safe-haven status usually associated with UK real estate, is driving and will continue to drive investment here,” said JLL’s Alex Carr.

“This return of overseas demand at present is particularly apparent among purchasers from the Gulf states, who are traveling back here for the first time in two years.

“London has always, historically, been a safe haven for wealthy individuals from Gulf states who are looking to diversify their assets, being one of the most resilient and transparent property markets in the world.”

London’s upscale Kensington district reportedly has experienced a significant increase in inquiries and applications from buyers in the Middle East.

“It was evident in May that demand was building, with increased communications from prospective (Middle Eastern) buyers who were preparing for their return to the UK following two years of travel restrictions,” said JLL’s Thomas Middleditch.

“A lot of these individuals have kept in touch over the course of the pandemic to stay informed on the market, yet as most are tangible buyers they have waited until they are in a position to physically return to the UK before inquiring about specific properties.

“Kensington has always been popular among Middle Eastern buyers and considered a low-risk investment given its location and established address.”


Heathrow owner Ferrovial studies options for stake in Britain’s biggest airport: Sources

Heathrow owner Ferrovial studies options for stake in Britain’s biggest airport: Sources
Updated 09 August 2022

Heathrow owner Ferrovial studies options for stake in Britain’s biggest airport: Sources

Heathrow owner Ferrovial studies options for stake in Britain’s biggest airport: Sources

LONDON: Spain’s Ferrovial is looking at options for its 25 percent stake in London’s Heathrow, two sources told Reuters, and has held preliminary talks with external advisers on the future of its holding in Britain’s biggest airport.

The early stage discussions come amid interest in Ferrovial’s stake from private equity firm Ardian, which has held talks with its own advisers on a possible joint proposal with Saudi Arabia’s Public Investment Fund, these sources and another person familiar with the matter said.

Ferrovial has yet to take a final decision and the discussions may not result in a sale, all the sources said.

HIGHLIGHTS

Heathrow is worth about €24.3 billion ($25 billion), including debt.

Qatar Investment Authority, which has a 20 percent stake in Heathrow, is the second biggest investor in the busy British airport.

Shares in the Madrid-listed firm rose as much as 4.2 percent on the Reuters report. At market close they were up 3.7 percent, scoring their second best day in five months and making them the third best performing stock across the pan-European STOXX 600 index.

Ferrovial and Ardian both declined to comment while PIF did not immediately respond to a request for comment.

Heathrow is worth about €24.3 billion ($25 billion), including debt, JPMorgan analysts calculated in May. By JPMorgan’s estimates, Ferrovial's Heathrow holding has an equity value of €611 million.

But Insight Investment Research analyst Robert Crimes had a less conservative approach and told Reuters the equity value of Ferrovial’s 25 percent stake in Heathrow could be close to €2 billion, well above analysts’ consensus. He said Ferrovial’s stock has yet to reflect the post-pandemic recovery in traffic volumes and inflation-linked returns.

Heathrow, which Aviation data firm OAG said was the world’s fifth busiest airport in July, was hard hit by coronavirus lockdowns, but raised its 2022 traffic forecast to 54.4 million passengers in June after a travel rebound.

Last month Heathrow, like some other airports in Europe, asked airlines to stop selling tickets for summer departures and capped passenger numbers to limit queues, baggage delays and cancellations as it struggled with pent-up demand.

Madrid-based Ferrovial, which controls Spanish transport infrastructure developer Cintra and has stakes in motorways in the US and Canada, has been invested in Heathrow airport for 16 years and ranks as its single largest investor.

Qatar Investment Authority, which has a 20 percent stake in Heathrow, is the second biggest investor in the busy British airport, while Caisse de dépôt et placement du Québec, Singapore’s wealth fund GIC and China Investment Corp. also have sizeable holdings.

QIA declined to comment while CDPQ, GIC and China Investment Corp. were not immediately available.

 


Oil up as Russian pipeline halt revives supply fears

Oil up as Russian pipeline halt revives supply fears
Updated 09 August 2022

Oil up as Russian pipeline halt revives supply fears

Oil up as Russian pipeline halt revives supply fears

NEW YORK: Oil edged up on Tuesday, reversing an early decline as worries about tightening supply were revived after Russia said oil exports to Europe on the southern leg of the Druzhba pipeline had been suspended since early August.
Russian pipeline monopoly Transneft said Ukraine had suspended oil flows via the pipeline leg because Western sanctions had prevented a payment from Moscow for transit fees from going through.
“Not that we need it at this point, but it’s another reminder of how tight the market is and how sensitive the price is to supply disruptions, particularly those from Russia,” said Craig Erlam of brokerage OANDA.
Brent crude was up $1.01, or 1.1 percent, to $97.66 a barrel at 11:30 a.m. EDT (1503 GMT), a sharp rebound from the session low of $94.90. US West Texas Intermediate crude gained 75 cents, or 0.8 percent, to $91.51 a barrel, bouncing from the session low of $89.05.
Oil also got a boost from a weaker US dollar. The dollar index, which measures the currency’s value against a basket of peers, was 0.23 percent lower at 106.09 at 10:25 a.m. ET (1425 GMT). Traders awaited a US inflation report on Wednesday.
Until the Druzhba news, mounting fears that a recession could cut oil demand had offset support for crude prices from tight supply and progress in talks to revive the Iran nuclear accord.
“Early selling had been prompted by a renewed prospect of Iranian nuclear discussions that could eventually facilitate resumption of oil exports out of Iran,” said Jim Ritterbusch, president of Ritterbusch and Associates LLC in a note, but added that he considered an imminent deal unlikely.


GAC approves Zamil Development Co.’s acquisition of Itqan Capital

GAC approves Zamil Development Co.’s acquisition of Itqan Capital
Updated 09 August 2022

GAC approves Zamil Development Co.’s acquisition of Itqan Capital

GAC approves Zamil Development Co.’s acquisition of Itqan Capital

RIYADH: Saudi Arabia’s General Authority for Competition on Tuesday announced its approval for Zamil Development Co.’s acquisition of Itqan Capital.

Itqan Capital is a Saudi closed joint-stock company. 


South Korean group join hands with Aramco for Mideast expansion

South Korean group join hands with Aramco for Mideast expansion
Updated 09 August 2022

South Korean group join hands with Aramco for Mideast expansion

South Korean group join hands with Aramco for Mideast expansion

RIYADH: South Korea’s steel firm SeAH Group has partnered with Saudi Aramco to boost its expansion plans in the Middle East, according to the Korea Economic Daily. 

The group’s special steel maker, SeAH Besteel Corp. has established the joint venture SeAH Gulf Special Steel Industries with the Saudi oil giant.

The JV is set to start building the factory, with an annual capacity of 17,000 tons, in the fourth quarter of 2022. Commercial operations are likely to begin in the first half of 2025.

“We will actively explore the Middle East market with various products such as stainless steel precision tubes and seamless stainless steel pipes,” said a SeAH Changwon official.