Pakistani industrialists urge government to tackle high energy prices, interest rate in budget 2024-25

Special Pakistani industrialists urge government to tackle high energy prices, interest rate in budget 2024-25
An aerial view of the commercial district of Pakistan's port city of Karachi on January 27, 2023. (AFP)
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Updated 29 May 2024
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Pakistani industrialists urge government to tackle high energy prices, interest rate in budget 2024-25

Pakistani industrialists urge government to tackle high energy prices, interest rate in budget 2024-25
  • Pakistan’s finance minister expected to unveil federal budget next week, shed light on priorities to address fiscal challenges
  • Pakistan has hiked fuel and energy prices over past two years in line with reforms recommended by International Monetary Fund 

KARACHI: Highlighting exorbitant energy costs, a high interest rate, and multiple taxations as major hurdles to industrial growth, Pakistan’s leading body of industrialists and traders on Wednesday said it hoped the government would address these challenges next week when it unveils the federal budget.

Pakistan’s Finance Minister Muhammad Aurangzeb is expected to unveil budget 2024-25 next week in the parliament. The document will outline the government’s financial plans and allocations across various sectors. The budget will also shed light on Pakistan’s economic priorities, potential reforms and strategies to address pressing fiscal challenges.

The development takes place as the South Asian country grapples with an economic crisis that has seen its reserves plummet, national currency decline in value significantly against the US dollar, and inflation surge.

The Federation of Pakistan Chambers of Commerce & Industry (FPCCI), the apex representative body of Pakistani traders and industrials in the country, said it has submitted budget proposals to the government, adding that it expects 80 percent of its demands to be met.

“We have collected all the information from our trade bodies, from all the chambers and we have made the proposals and we have already sent them to the FBR (Federal Board of Revenue), Ministry of Finance and the other departments,” Atif Ikram Sheikh, the FPCCI’s president, told Arab News on Tuesday.

Sheikh said the FPCCI has invited the government’s attention toward major issues that industrialists and traders in Pakistan encounter, such as exorbitant energy costs, taxation and the prevailing high interest rate. 

He said these issues were not making it “bearable” to run industries in Pakistan. 

“So we want the government to reduce interest rates, energy costs like fuel prices, gas and electricity and to run the economy in a better way,” Sheikh explained. 

Pakistan has hiked prices of fuel and energy as part of reforms demanded by the International Monetary Fund (IMF) in exchange for a $3 billion loan program last year.

Pakistan increased gas charges by 318.74 percent and electricity charges by 71.12 percent since April 2023, as per official data. Surging energy costs took inflation to a historic high of 38 percent in May 202, which gradually eased to 17.3 percent in April 2024. 

Pakistan’s central bank has projected the annual average inflation in the range of 23– 25 percent for the current fiscal year against a target of 21 percent.

The country’s finance minister expects inflation to decrease to 13.5-14.5 percent range in May 2024 and decline further to 12.5-13.5 percent by June 24. 

Industrialists want the government to slash the interest rate, which has made the cost of borrowing high in Pakistan. The central bank has cumulatively raised the policy rate by 1,500 basis points during FY22 and FY23 and has maintained it at 22 percent at present. 

Pakistan’s finance ministry said on Wednesday it expects a “promising” economic outlook amid improving industrial activities. 

“The economic outlook is promising as industrial activities are gradually improving, inflation is on a downward trajectory and the external sector is stable,” the finance ministry said in its monthly economic report for May 2024.

The ministry observed that as the fiscal year is about to end, the economic indicators reflect that stability is gaining strength in the real, fiscal and external sectors.

It said Pakistan’s GDP growth is increasing while the inflation rate is on a decline, reflecting the effectiveness of recent fiscal consolidation efforts. The report said the country’s economic performance also reveals that agriculture has been a major contributor to this fiscal year’s economic upswing, attributed to government-led initiatives that enhanced input supply and credit disbursements. 

The FPCCI has demanded a reduction in import duties and sales tax on various items. The body has also demanded a revival of the zero rating of sales tax for five export-oriented sectors, namely sports, surgical, leather, textiles, and carpets.

“We are sure and expecting what we are sending, what we have requested to the government, they will consider the FPCCI’s proposals,” Sheikh said.

“And I am sure 80 percent of our demands will be fulfilled.”


Pakistan condemns fresh Israeli attack on Gaza’s Khan Younis, calls it ‘mockery of humanity’

Pakistan condemns fresh Israeli attack on Gaza’s Khan Younis, calls it ‘mockery of humanity’
Updated 16 sec ago
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Pakistan condemns fresh Israeli attack on Gaza’s Khan Younis, calls it ‘mockery of humanity’

Pakistan condemns fresh Israeli attack on Gaza’s Khan Younis, calls it ‘mockery of humanity’
  • Israeli tanks rolled back into the greater Khan Younis area after Israel ordered evacuations of some districts it said were being used by militants
  • Israeli tank salvoes killed 49 Palestinians in the town of Bani Suhaila and others fringing eastern Khan Younis, with the area also bombarded by air

ISLAMABAD: Pakistan Prime Minister Shehbaz Sharif on Monday condemned fresh Israeli strikes in Gaza’s Khan Younis area that killed 49 Palestinians, describing it as a “mockery of humanity.”
Israeli tanks rolled back into the greater Khan Younis area after Israel ordered evacuations of some districts it said had been used for renewed attacks by militants.
The Palestinians were killed by tank salvoes in the town of Bani Suhaila and others fringing the eastern side of Khan Younis, with the area also bombarded by air, residents said.
“Such an aggressive attack within minutes of instructions given to Khan Younis refugees to evacuate is a mockery of humanity,” Sharif said in a statement. “The unarmed Palestinian refugees were not even given a chance to evacuate.”
The Gaza health ministry said the dead included several women and children and that at least 186 other people had been injured by Israeli fire.
Around 400,000 people are living in the targeted areas and dozens of families have begun to leave their houses, Palestinian officials said, adding they were not given time to get out of harm’s way before the Israeli strikes began.
The Pakistan premier said it was clear that Israeli forces were acting on “the agenda of genocide of the Palestinians.”
He reiterated Pakistan’s support for the Palestinians in their struggle for right to self-determination. “The United Nations must play its role in resolving the Palestine issue,” Sharif added.
Pakistan does not recognize nor have diplomatic relations with Israel and calls for an independent Palestinian state based on “internationally agreed parameters” and the pre-1967 borders with Al-Quds Al-Sharif as its capital.
Since the beginning of Israel’s war on Gaza in October last year, Pakistan has repeatedly raised the issue at the United Nations and demanded international powers and multilateral bodies stop Israeli military actions in Gaza.
Israel has vowed to eradicate Hamas after militants killed 1,200 people and took more than 250 hostages in a cross-border assault on Oct. 7, 2023, according to Israeli tallies.
The death toll among Palestinians in Israel’s retaliatory offensive since then had reached at least 39,006 as of Monday, Gaza health authorities said.


Pakistan aims to increase revenue by 1.5 percent of GDP this year under new IMF deal — minister

Pakistan aims to increase revenue by 1.5 percent of GDP this year under new IMF deal — minister
Updated 22 July 2024
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Pakistan aims to increase revenue by 1.5 percent of GDP this year under new IMF deal — minister

Pakistan aims to increase revenue by 1.5 percent of GDP this year under new IMF deal — minister
  • The statement came during Finance Minister Muhammad Aurangzeb’s virtual meeting with representatives of Fitch Ratings agency
  • The discussions encompassed reforms in energy sector and state enterprises, including privatization and ‘rightsizing’ of entities

ISLAMABAD: Pakistan’s finance minister, Muhammad Aurangzeb, said on Monday the South Asian country aimed to increase its revenue by 1.5 percent of the gross domestic product this fiscal year under a new $7 billion loan deal with the International Monetary Fund (IMF).
The Pakistani finance minister said this during a virtual meeting with representatives of Fitch Ratings agency, including Senior Director Thomas Rookmaker, and Directors Asia Pacific Krisjanis Krustins and Jeremy Zook.
The discussions encompassed ongoing reforms in the energy sector and state-owned enterprises, including privatization and “rightsizing” of government entities to streamline operations and improve governance, according to the finance ministry.
Aurangzeb informed the rating agency about multilateral institutions’ confidence in financing Pakistan’s projects and briefed them on the staff-level agreement reached with the IMF this month to bolster Pakistan’s homegrown economic reform agenda.
“The Federal Minister apprised the Fitch representatives of salient features of the new program which includes setting a target of increasing our revenues by 1.5 percent of GDP in FY 2025 and by 3 percent over the coming 3 years,” the finance ministry said in a statement. “A primary surplus of 1 percent of GDP will also be achieved for FY 2025.”
He provided an extensive update on Pakistan’s current economic landscape and highlighted Pakistan’s foreign exchange reserves had reached $9.4 billion, robust stock exchange performance, and CPI inflation recorded at 12.6 percent in June.
The minister noted a 7.7 percent rise in foreign remittances and emphasized the government’s efforts to broaden the tax base, citing a 30 percent increase in tax collection during the outgoing fiscal year as compared to previous year.
“More than 150,000 retailers have registered as first-time tax payers. The IT exports crossed the figure of USD 3 billion,” Aurangzeb was quoted as saying by his ministry.
Pakistan’s new government presented its first budget in parliament last month, setting an ambitious tax collection target. Aurangzeb said at the time Pakistan wanted to collect Rs13 trillion ($44 billion) in taxes, which would be 40 percent more than the outgoing fiscal year.
“The representatives from Fitch Ratings appreciated the ambitious targets and fiscal measures adopted by the Government of Pakistan and acknowledged the improvement in economic indicators,” the finance ministry added.


Pakistan police raid headquarters of ex-PM Khan party, arrest official over ‘anti-state propaganda’

Pakistan police raid headquarters of ex-PM Khan party, arrest official over ‘anti-state propaganda’
Updated 22 July 2024
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Pakistan police raid headquarters of ex-PM Khan party, arrest official over ‘anti-state propaganda’

Pakistan police raid headquarters of ex-PM Khan party, arrest official over ‘anti-state propaganda’
  • Videos shared online showed policemen surrounding PTI party secretariat in Islamabad, leading away Information Secretary Raoof Hasan
  • Pakistan’s interior ministry says the raid was conducted on the basis of initial investigation and analysis of the party’s digital content

ISLAMABAD: Pakistan’s police on Monday raided the headquarters of jailed former prime minister Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party in Islamabad and arrested a top official of the party for involvement in anti-state propaganda, the interior minister said.
PTI social media accounts shared videos of dozens of policemen surrounding the PTI secretariat in Pakistan’s federal capital of Islamabad and leading away PTI Information Secretary, Raoof Hasan.
Pakistan’s interior ministry confirmed Hasan’s arrest and said the Islamabad police and the Federal Investigation Agency (FIA) raided the PTI digital media wing based on initial investigation and analysis of party’s digital content.
“The PTI is involved in anti-state propaganda,” the interior ministry said in a statement. “A JIT [joint investigation team] is being constituted [to investigate the allegations].”

Women police officers taking the arrested female workers of the Pakistan Tehreek-e-Insaf (PTI) from the party's headquarters into police van after a security raid in Islamabad on July 22, 2024. (AFP)

Authorities also briefly detained PTI Chairman Gohar Khan, who is also Khan’s lawyer, on Monday but released him later, Sayed Zulfikar Abbas Bukhari, Khan’s key adviser on media, told Arab News.
The raid at PTI headquarters and the arrest of the party’s information secretary comes days after several other PTI members, including the party’s top media manager Ahmed Waqqas Janjua, were arrested by authorities.
An anti-terrorism court on Monday remanded Janjua into police custody for seven days after the investigating officer said he was found in possession of explosives during the arrest and they wanted to probe his alleged links with outlawed organizations, according to the PTI and Janjua’s lawyer.
Pakistan’s Information Minister Ataullah Tarar last week said the government planned to ban the PTI, days after the Supreme Court made a crucial ruling in the party’s favor that dealt a huge blow to the government.
Khan has been jailed for nearly a year, but this month an Islamabad judge overturned his illegal marriage conviction while the Supreme Court awarded PTI more parliamentary seats — a move set to make them the largest party in the National Assembly.

Policemen make way for prison van after a security raid at the Pakistan Tehreek-e-Insaf (PTI) party's headquarters in Islamabad on July 22, 2024. (AFP)

Both cases were considered a major blow to the government of Prime Minister Shehbaz Sharif, who has been leading a weak coalition since the February 8 election.
The Human Rights Commission of Pakistan (HRCP) described the attempt to ban the PTI as “an enormous blow to democratic norms” and said it “reeks of political desperation.”
“If pushed through, it will achieve nothing more than deeper polarization and the strong likelihood of political chaos and violence,” HRCP Chairman Asad Iqbal Butt said in a statement.
Khan, who says the cases against him have been orchestrated to prevent his return to power, remains languishing in jail on fresh charges of inciting protests and graft.
A United Nations panel of experts this month found that Khan’s detention “had no legal basis and appears to have been intended to disqualify him from running for political office.”


Pakistan welcomes Omani investors’ visit to Islamabad this week with economic cooperation on agenda

Pakistan welcomes Omani investors’ visit to Islamabad this week with economic cooperation on agenda
Updated 22 July 2024
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Pakistan welcomes Omani investors’ visit to Islamabad this week with economic cooperation on agenda

Pakistan welcomes Omani investors’ visit to Islamabad this week with economic cooperation on agenda
  • Pakistan, faced with low forex reserves, currency devaluation and high inflation, this month reached a staff-level agreement with IMF for $7 billion loan
  • The South Asian country is making desperate attempts to boost foreign investment to cut its reliance on foreign debts to support its $350 billion economy

ISLAMABAD: Pakistan welcomes the visit of a delegation of Omani investors to Islamabad this week, the Pakistani deputy prime minister said on Monday, amid the South Asian country’s push to boost trade and foreign investment.
The statement came after Pakistan’s Deputy Prime Minister and Foreign Minister Ishaq Dar’s telephonic conversation with Omani FM Sayyid Badr bin Hamad bin Hamood Albusaidi.
The two leaders reviewed the entire spectrum of bilateral relations, ranging from political, economic and defense cooperation to people-to-people exchanges, according to the Pakistani foreign office. 
“The Deputy Prime Minister & Foreign Minister welcomed the forthcoming visit of a delegation of Omani investors to Pakistan later this week, geared toward exploring areas of mutually beneficial economic cooperation,” the foreign office said in a statement. 
“The two leaders also shared views on a range of regional and international issues of mutual interest.”
Pakistan, which has been facing low foreign exchange reserves, currency devaluation and high inflation, this month reached a staff-level agreement with the International Monetary Fund (IMF) for a $7 billion loan.
The South Asian country is making desperate attempts to boost foreign investment to cut its reliance on foreign debts to support its $350 billion fragile economy. In recent months, there has been a flurry of visits, investment talks and economic activity between Pakistan and Saudi Arabia, Japan, Azerbaijan, Qatar and other countries.
During the conversation, Dar and his Omani counterpart also discussed an attack on Imam Bargah Ali bin Abu Talib in Wadi Kabir in Muscat that killed six people, including four Pakistanis, and injured dozens of others on July 15.
Dar emphasized the importance of concerted action to combat militancy in all its forms and manifestations and extended Pakistan’s full support to Oman in this regard, according to the Pakistan foreign office. 
He appreciated Oman’s support in repatriation of bodies of the mosque attack victims to Pakistan and taking care of the injured Pakistani nationals.


Anti-terrorism efforts being made ‘controversial’ by ‘political mafia’ — Pakistan army 

Anti-terrorism efforts being made ‘controversial’ by ‘political mafia’ — Pakistan army 
Updated 22 July 2024
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Anti-terrorism efforts being made ‘controversial’ by ‘political mafia’ — Pakistan army 

Anti-terrorism efforts being made ‘controversial’ by ‘political mafia’ — Pakistan army 
  • Government has announced launching new counterterrorism operation which has been rejected by opposition, incluidng Khan’s PTI
  • Head of army’s media wing labels anti-military narrative work of “digital terrorists” who will be dealt with through the law, regulations

ISLAMABAD: A spokesman for the Pakistan army said on Monday anti-terrorism efforts, including a new “comprehensive” operation announced by the government, were being “politicized” to the detriment of the country’s national interests, in veiled comments against the party of jailed ex-premier Imran Khan.

Pakistan last month announced it would launch a new “multi-pronged” operation called Azm-e-Istehkam, or Resolve for Stability, that would not only eliminate militants though military and intelligence actions but also deter extremist thinking through socio-economic uplift.

The campaign has so far been rejected by opposition parties, particularly the Pakistan Tehreek-e-Insaf (PTI) party of former prime minister Khan, on the grounds that opposition parties and parliament were not consulted.

Pakistan has seen a massive surge in militancy in recent months, with daily attacks on security forces and assassinations of police and government officials. Islamabad blames the attacks on militants operating out of Afghanistan. Kabul denies that it allows its territory to be used by insurgents and says Pakistan’s security woes are a domestic issue.

Addressing a press conference on Monday, Lt. Gen. Ahmed Sharif Chaudhry said the Azm-e-Isjtehkam operation had been “politicized” by what he described as a “political mafia.”

“Why did a mafia, a political mafia, and an illegal mafia say that they would not let this [campaign] happen?” Chaudhry said, adding that opponents of the operation had tried to make it “controversial” and paint it as a purely military operation in which thousands would be displaced. 

“Azm-e-Istehkam is a comprehensive and integrated counter-terrorism campaign, not a military operation as it is being presented,” he added. “This is a comprehensive campaign against terrorism, which won’t just root out terrorism but which will lift up all of society … and the stakes are very high here.”

He said 137 officers and soldiers had been killed in anti-terror operations this year and security forces had conducted 22,409 intelligence-based operations. Together, the armed forces, police, intelligence agencies, and other law enforcement agencies were conducting more than 112 operations daily, the general said. 

Despite the army’s sacrifices, he said “digital terrorists” were using “fake news and propaganda” to spread lies about the army and its intentions. He was answering a question about the army’s decreasing popularity in Pakistan.

“This is digital terrorism,” Chaudhry said. “The physical terrorist also attacks law enforcement agencies and the army, and the digital terrorist also attacks the army. They are doing the same thing.”

“Digital terrorists,” the spokesman said, would be deterred through laws, regulation and monitoring. 

Chaudhry’s veiled comments about the PTI and Khan came days after the federal government of PM Shehbaz Sharif announced plans to ban the party and moved the country’s top court to press treason charges against Khan. 

Khan came to power in 2018 and was ousted in 2022 after what is widely believed to be a falling out with Pakistan’s powerful military, which had helped propel him into office. The army denies political interference.

Since his ouster, the PTI founder and his party have faced an ever-widening state-backed crackdown and Khan himself has been in jail since August last year. He was acquitted earlier this month in one of the last standing convictions against him but was not freed after authorities issued new orders to arrest him in another case involving riots by his followers in May last year. 

Khan, arguably the country’s most popular politician, says all legal cases are motivated to keep him out of politics and dent the popularity of the PTI. He has led an unprecedented campaign of defiance against the army and independent analysts say has succeeded in denting its popularity in a nation that has been ruled by the military for nearly half its history. 

The convictions against Khan had ruled him out of Feb. 8 general elections, which all candidates from his party were forced to contest as independents after the election commission denied the party its iconic symbol of a cricket bat on technical grounds. Despite the setbacks, Khan-backed candidates won the most seats in the polls but could not form the government, which is now being led by Sharif’s PML-N party in coalition with other parties.