Meezan Bank’s Service Facing Interruption

A section of customers have been facing problem while making transaction of their money through various channels of payment including, digital banking, ATMs and POS due to technical issues.

Meezan Bank is considered as one of the banks in Pakistan with its seamless banking experience for the customers which made the bank as the one of most preferred banks in Pakistan. Being the biggest Islamic bank and wide network, it has attracted huge number of customers in the past few years. However, the bank disappointed its customers as it service faced frequent interruptions last wee.

According to the customers, the cash withdrawal on ATM did not work whereas POS also did not transfer the amount from customers account to merchant’s account, which caused inconvenience to customers. Some of the customers said that the amount has been deducted from their accounts but did not transfer to the other end.

Unlike Habib Bank Limited which has left their customers in the lurch with no communication regarding system error, the management of the Meezan Bank while assessing the technical issues conveyed their customers about the snag and assured them for restoration of the services and reversal of the amount in their accounts.

According to the official notification issued by the bank: Dear Customers, Due to technical difficulties you may face issues in some of our services. Our teams are working to resolve the issues and provide you with an uninterrupted banking experience.
We regret any inconvenience you may face and thank you for your patience, the notification stated.

Customers of the Meezan Bank received the message from the banks through SMS and social media. The customers of the bank heaved a sigh of relief after receiving the message from the bank.

HBL Disappoints Customers Yet Again

Habib Bank Limited claims to be the biggest bank of the country, yet it is a bank with a full of surprises to its customers with sequence of weird events.

In the recent episode, the bank’s customers were shocked with messages on different channels from the deduction of the amount from the account which they did not spend or used through ATM, online, or POS.
According to the reports

The deduction of an amount from the account is actually the reversal of the payment which the bank had made as a result of software malfunction in a recent month. Thus, there is no loss of customers’ money. Customers could duly check their balance statement of the past six months in order to reconcile their amount with bank branch or through online banking.
Official statement made by Farhan Ahmed, the spokesman said:

Due to a software malfunction, few of our clients were credited twice with the same amount of funds into their accounts. Most of these incorrect postings have been reversed by the bank. Any reversal that the clients may see in their accounts is a result of the corrective action taken by the bank. For any queries, clients may also contact their branch or the call centre.

However, a majority of the customers does not subscribe to the stance issued by the HBL’s official. Even HBL’s in its official statement did not rule out if there is a wrong deduction of the money from the account of customers in the case or reversal.

Simply, if the system can make a system to credit an amount twice, it can make another mistake to debit an amount twice.
In addition to the glitches in the services, the management of HBL has turned out to be extremely poor when it comes to dealing with a crisis communication. There has been no communication from the customers’ service about the issues in the services and the weird transaction in the bank account of the customers.

Last month, scores of the customers faced hardship when the bank’s online and mobile banking service witnessed frequent interruptions of transactions.

HBL’s operation has been very poor for the technology point of view. Hence, the bank’s management should remove the tagline a technology company with a banking license. The tagline should be the bank with the surprises.

FPCCI terms gas crisis, huge taxes threatening for export

Mian Nasser Hyatt Maggo, President of the Federation of Pakistan Chambers of Commerce and Industry has urged the government to take effective measures to overcome the gas crisis and ensure uninterrupted supply of gas to industries as well as reduce electricity tariffs. If the government does not address the problems of electricity and gas, trade and industry will suffer severely and exports will be affected while revenue will also decline.

He said this while addressing a meeting on the occasion of the visit of a delegation led by Saqib Naseem, Central Chairman, Pakistan Yarn Merchants Association (PYMA) to FPCCI. Mohammad Hanif Lakhani, Vice President FPCCI, Farhan Ashrafi, Convenor Yarn committee FPCCI, Khurshid A. Shaikh, Muhammad Usman, M. Saqib Goodluck, Khurram Bharara, Farhan Ashrafi, Danish Hanif, Waheed Umer, Sohail Nisar, M. Noman Ilyas, M. Aslam Moten, Jawed Khanani and Shoaib Sharif were also present in the meeting.

Highlighting the important issues of the country, Nasser Hyatt Maggo said that power shortage and gas crisis across the country has badly affected the people including industries. The government must take these crises seriously.

He asked the PYMA members about the issues facing them regarding the duties and taxes imposed in the federal budget. Will play a full role in solving problems. FPCCI president also sought suggestions from PYMA for the forthcoming budget so that every effort could be made to make it a part of the budget.

Saqib Naseem, PYMA chairman expressed satisfaction over the FPCCI’s proposal to set up a committee and accept the invitation to visit PYMA to discuss important trade and industry issues with stakeholders. He also agreed on a proposal for the preparation of budget proposals for the new federal budget through mutual consultation.

In the meeting, PYMA members demanded the government to eliminate the distinction between commercial & industrial importers, to increase the production of synthetic yarns, to abolish section B, and to reduce the duty drawback.

Pakistan Stock Exchange Lists First GEM Board Company

In a watershed development at Pakistan Stock Exchange (PSX), Pak Agro Packaging Limited (PAPL) becomes the very first company to be listed on PSX’s Growth Enterprise Market (GEM) Board. The GEM Board is a listing platform created to facilitate growth enterprises whether small, medium or greenfield businesses for their capital raising needs.

Adviser to the Prime Minister on Finance and Revenue Mr. Shaukat Tarin was the Chief Guest of the gong ceremony.
The Ceremony was also attended by Chairman SECP, Mr. Aamir Khan; Chairperson PSX, Dr. Shamshad Akhtar; MD & CEO PSX, Mr Farrukh H. Khan; Board Members PSX; CEO Pak Agro Packaging Limited, Mr. Khalid Butt; CEO AKD Securities Ltd., Mr Farid Alam; and senior management of the participating organisations including PSX, SECP, Pak Agro Packaging Limited and AKD Securities Limited.

Pak Agro Packaging Limited had set out to raise Rs 180 million through the PSX GEM Board Listing. The Issue of Pak Agro Packaging Limited consisted of 8,000,000 ordinary shares comprising of 40% of the post-issue paid-up capital of the Company. The entire Issue was offered through book building process at a floor price of Rs 22.50 per share.

The amount raised was Rs 198,000,000 against total bids received Rs 366,453,573 (or 14.79 million shares) at strike price of Rs 24.75 per share, thereby the Issue was oversubscribed by 1.85x. A large number of investors participated in the book building process and out of 106 bidders, 69 investors were declared successful.

The Adviser to Prime Minister on Finance & Revenue, Mr. Shaukat Tarin, hailing the inclusion of the first company on the GEM Board, said, “As we celebrate the first listing on the GEM Board, I congratulate not only the management of Pak Agro Packaging Limited but also the Board Members and the Management of Pakistan Stock Exchange and the Securities and Exchange Commission of Pakistan who have worked tirelessly in converting this dream into reality. I would recommend SMEs to come forward to avail this opportunity to raise capital through the Stock Exchange.”

In response to comments of MD PSX regarding rationalisation of tax incentives, Mr Shaukat Tarin stated, “We absolutely have to rationalise tax incentives so that investment in Pakistan’s productive sector increases. We want to see investment in this country in productive sectors. While I am not against the real estate sector as it benefits the economy and supports around 40 other industries as well as creates employment, we have to make sure that the benefits to the real estate sector are aligned with those given to other productive sectors of the economy as well. We do see an anomaly in the real estate sector when plots of land are bought and are held for years. That is productive capital sunk. In this regard, I would like to announce that we will be introducing certain scheme of taxes that will be applicable to these assets so that the money can be recycled to the other sectors of the economy as well. We are also approving REIT listings which will benefit the capital market. Additionally, we are in favour of listing of SOEs which are currently encumbered by the circular debt phenomenon. This has choked some of our public sector entities, specially in the energy sector. We are, however, in the process of unlocking that. Petroleum and some power companies in the listed domain will see some activity and that will help the Stock Exchange as these are heavy weight companies.

We appreciate the hard work put in by you, and I will stand with you in all your efforts; I also call upon the FBR to provide the necessary support that you need and to review the tax regime to encourage companies to list ”, he added.

The Chairman SECP, Mr Aamir Khan, stated, “The SECP has always focused on improving access to finance for SMEs, and the GEM Board will facilitate small enterprises, start ups and green field companies in gaining access to private capital.”

Speaking about the successful book building & listing of Pak Agro Packaging Limited on the GEM Board of PSX, the MD PSX, Mr. Farrukh Khan, stated, “I congratulate Pak Agro Packaging Limited as the first company to be listed on the GEM Board of the Exchange since the Board was launched in 2019. The GEM Board is an important innovation in Pakistan’s capital market and will support the financing needs of the hugely important and vibrant SME sector in Pakistan by enabling them to raise debt and equity capital at a low cost and with ease. The new Board will also help in the full value chain of early stage financing in Pakistan as such investors will now have a viable exit mechanism via listing on the GEM Board.

As an industry leader in providing agricultural support packaging & storage products, Pak Agro Packaging Limited is now raising capital to expand its industrial base by manufacturing fishing nets. We are very happy that they have utilised the GEM Board to raise of capital for diversifying their industrial capacity as well as for meeting their working capital needs.”

He further stated, “Pakistan Stock Exchange has been working diligently to facilitate the SME sector of Pakistan in meeting their financial needs through the capital markets. We are thankful to the SECP and Ministry of Finance for their guidance and support in this effort. We are confident that this will become an important source of capital for Pakistan’s SME sector.”

Speaking about the successful listing of Pak Agro Packaging Limited on PSX’s GEM Board, the Chairman of the Company, Dr. Safdar Ali Butt, said, “I wish to offer my congratulations to Pakistan Stock Exchange, SECP, our consultants, AKD Securities Ltd, and all those entities who have been instrumental in opening the doors to access equity capital for SMEs of this country through the GEM Board of Pakistan Stock Exchange.”
He further stated, “The common misconceptions of SMEs being a risky proposition has clearly not stopped informed and sensible investors, particulary the institutional investors, from investing in the bright & potentially enormous future of SMEs.”

The Chairman of AKD Group, Mr. Aqeel Dhedhi, stated “The first listing at the GEM Board has paved the way for SMEs access to equity capital and created opportunity for investors to participate in evolution of progressive enterprises.”

The CEO of AKD Securities Ltd., Mr. Farid Alam, added, “SMEs are a backbone of any developing economy. The growth path that we as a nation have embarked upon, requires contribution from all participants of the economic value chain. By introducing the GEM Board, SECP and PSX, with the help of financial sector entities, have allowed SMEs access to that integral capital for long term growth. We are delighted to be part of the first ever GEM listing and a catalyst for long term growth.”

Head of Investment Banking at AKD Securities Ltd., Syed Khurram Shahid, said, “PAPL’s inaugural listing at PSX GEM Board executed by AKD Securities Limited is a testimony of our firm belief in leading the development of the financial ecosystem and supporting the growth stimulus of Small and Medium Enterprises. This Board offers a lot of promise and a formidable channel for raising funds for financially challenged SME sector companies.”

AKD Securities Limited took the initiative of bringing the first growth company for listing on the Exchange’s GEM Board. The book building attracted tremendous response from investors. This reflects the interest and appetite that investors have for sound and sustainable businesses that offer good potential returns and growth opportunities.

Pakistan Organized Single Country Exhibition in Lagos, Nigeria

The Single Country Exhibition under the Look Africa Policy of Ministry of Commerce was organized in Lagos, Nigeria from 24-25 November, 2021. The Expo was jointly inaugurated by Governor of Lagos State, Mr. Babajide Sanwo-Olu, along with Federal Minister for Trade and Industry of Nigeria and Mr. Abdul Razak Dawood, Advisor Commerce.

More than 100 Pakistani companies from Automotive, Engineering, Agro Food, Textile, Pharmaceuticals, Cosmetics, Kitchenware, Electrical, Surgical, Leather, Sports, and Information Technology/Services sectors put up stalls in the exhibition, which was organized by Trade Development Authority of Pakistan. Pakistan Software Export Board also participated, pitching in for Pakistan IT sector.

Buyers from Nigeria and ECOWAS member states of West Africa, particularly from Benin, Cabo Verde, Cote d’Ivoire, Ghana, Niger, Senegal, Sierra Leone and Togo attended the event and B2B meetings were organized. Twelve (12) Pakistani companies from Pharmaceutical, Automotive, Leather and Sports Sectors signed MoUs, ranging from US$ 250,000 to US$ 9 million, and it is expected that they will result in finalization of export orders worth millions of dollars in coming months. Pakistan Trade MIssions based in Senegal, Sudan, Algeria and Kenya also brought business delegations.

More than 4000 businesspersons from Nigeria and ECOWAS region attended the event. Pakistani companies generated a lot of leads, and TDAP also facilitated their visit to local markets for more hands-on experience of the Nigerian market.

The Pakistani exhibitors appreciated the efforts of Trade Development Authority of Pakistan and Pakistan High Commission in Nigeria for organizing the event and facilitation for their visas and logistics. Pakistani companies suggested that such single country exhibitions may be held after every 6 months in Africa to get more traction, to increase Pakistan’s exports, and to explore joint ventures with African companies.

The event strengthened the footprint of Pakistan’s exports into Africa and especially in West Africa. The exhibition helped Pakistani companies to fortify their presence and to create deeper inroads into the African market.

Finance Adviser lunches Pakistan’s first Professional Clearing Member for capital market

As a landmark achievement in Pakistan’s capital market landscape, the first Professional Clearing Member (PCM) has been formally inaugurated by the Adviser to the PM on Finance & Revenue, Mr. Shaukat Tarin on Nov 26, 2021 at CDC House, Karachi.

Speaking at the occasion, Mr. Shaukat Tarin said, “It is the top priority of our Government to facilitate businesses and improve ease of doing business environment. This initiative of Professional Clearing Member (PCM) is a very significant and timely initiative by SECP and very well executed by CDC. It is very important for our Capital market that we introduce such novel concepts which will bring more transparency and efficiency in our market. CDC has won the trust and confidence of the investors, Regulator and all stakeholders in the market with its efforts of market development and investor facilitation.”

The new PCM regime has been successfully implemented after the introduction of the relevant regulatory framework by SECP and capital market infrastructure entities, leading to the launch of EClear Services Limited (ESL) by i.e. CDC, PSX, NCCPL and Pakistan Kuwait Investment Company, with CDC playing the lead role of the project manager.

Speaking at the occasion, the SECP Chairman, Aamir Khan said that “The PCM regime shall address two longstanding issues: risk of custody defaults by transferring custody to the PCM, and expanding the retail investor base by empowering small brokers.”

Mr. Tariq Rafi, member of CDC’s Board of Directors, welcomed Mr. Tarin and others guests after which Chairman CDC Mr. Moin Fudda addressed the audience. CEO CDC Mr. Badiuddin Akber presented a brief presentation to the audience explaining the working and benefits of the Professional Clearing Member. He mentioned, “The solution will provide investors with a completely new and digital experience of Pakistan’s capital market while giving them the confidence of asset protection by a reliable and independent third party service provider.”

The event was well attended by Capital market representatives including Chairperson PSX – Dr. Shamshad Akhtar and CEO PSX – Mr. Farrukh Khan.

PM’s Advisor on Finance & Revenue visits PBA office

Mr Shaukat Tarin, Advisor to the Prime Minister on Finance and Revenue, visited the office of Pakistan Banks’ Association (PBA) in Karachi, on Friday, November 26, 2021 & met its Executive Committee. Mr. Muhammad Aurangzeb, Chairman, PBA, and Mr. Tawfiq Hussain, CEO & Secretary General, PBA, welcomed the Advisor to PBA.

Mr. Tarin lauded the role of PBA, saying that it has become an increasingly effective and vibrant body.

Matters pertaining to the banking sector were discussed and Mr. Tarin emphasized the need for the banks to aggressively grow their deposit base so that the saving rate of the country increases and moves closer to those in countries similar to Pakistan. On this, PBA pointed out the continuing wide disparity between the lower tax rates on profit/dividends from investment in shares listed on stock market and in units of mutual funds, & the tax rates on profit from bank deposits classified as “profit on debt”. Mr. Tarin understood this disparity.

Apart from the need to diversify lending, both geographically and sectorally, Mr. Tarin asked the banks to also focus on product innovation. He specifically asked the Development Financial Institutions to develop long term paper. Talking about Kamyab Pakistan Program, Mr. Tarin asked for more banks to participate in the second bidding process. On Roshan Digital Account, Mr. Tarin emphasized the need for banks to also push this offering in markets other than UAE.

In response to PBA’s concern on the huge disparity in tax rates on banks and the tax rate on corporate sector and the continuation of Super Tax on banks, which stands withdrawn from the corporate sector, Mr. Tarin understood and agreed with the PBA concern and said that the Government will look into the matter.

PAKISTAN-AFRICA TRADE DEVELOPMENT CONFERENCE AND SINGLE COUNTRY EXHIBITION 23-25th NOV 2021, LAGOS NIGERIA

The conference was very well attended by business men and officials from ECOWAS member states specially Nigeria. While addressing the conference, Mr. Abdul Razak Dawood declared that Africa was “a promising continent and land of opportunities”. He also called for closer economic ties with Africa to harness mutual benefits in trading activities with Pakistan.

According to Dawood, until now, Africa has been a distant frontier for Pakistan, economically, with the trade volume not very high. It has hovered around only three billion dollars, but the good news is, ever since we created the ‘Look Africa Policy’, our trade is increasing. Exports to Africa in first four months have increased by 21 percent.

“Soon after coming into power, the Prime Minister of Pakistan took the initiative and asked the ministry of commerce to look at regional connectivity and, in particular, look at Africa.

“As a result of that, we developed a ‘look Africa policy’ and we analyzed all the 54 countries of the continent and our study showed a promising continent and a land of opportunity.

“Our vision is to get closer and set a target of doubling our export in the next five years; we are looking at regional connectivity. We are not only looking at Africa. We are equally looking at Asia as well.

“We were trying to get positive results after the first conference in Kenya, but due to the pandemic, we could not come to this country until this time and we will be coming back to Nigeria next year,” he said.

He added that no cooperation was possible without the business men and women from Africa and Pakistan, urging governments of both groups to facilitate robust collaboration.

Speaking earlier, the High Commissioner of Pakistan to Nigeria, Mr Muhammad Azam, said that with global priorities moving away from geo-politics to geo-economies all over the world, national policies must focus on transformation via multiple facets.

“African continent is the largest free trade area with 1.2 billion persons market.“It has tremendous business potentials and resources to benefit its market and government of Pakistan.“ The ‘Look Africa Initiative’ aims at improving trade and investment relationship between Africa and Pakistan.

“The Pakistan trade development conference, a single country exhibition, is the manifestation of the initiative undertaken by the Pakistani ministry of commerce. “In the post-COVID-19 environment, this conference will enable the business communities of Pakistan and Africa, especially the Nigerian business community, meet with 100 Pakistani companies to interact with each other,” he said.

Adebayo, Minister of Industry, Trade and Investment, says Nigeria is well prepared for the African Continental Free Trade Area (AfCFTA) with policies and initiatives being implemented by the Federal Government. He welcomed Pakistan’s look Africa Policy and thanked for choosing Nigeria as host for the 2nd PATDC and Exhibition.

Also, Mr Adeshina Emmanuel, Director, Investment Promotion, NIPC, said Nigeria was Africa’s biggest economy with a population of over 200 million people.

Emmanuel said: ” Nigeria is the ideal gateway economy for leveraging the AfCFTA.

“Nigeria is more than ready than most African economies. The AfCFTA will expand market for Nigerian goods and services, creating jobs and economic growth.”

He said that many Nigerian companies, particularly in the service sector, had long developed capacity to serve the rest of Africa which would be further boosted by the AfCFTA and Pakistani companies can benefit by partnering with Nigerian companies.

Lagos State Governor, Mr. Babajide Sanwo-Olu, adviced the African Continent and the Pakistani Government to explore using emerging technologies to improve their trade and business environment, during the 2nd Pakistan-Africa Trade Development Conference and Single Country Exhibition, on Tuesday on Victoria Island. He said that it was an encouraging sign of the post-pandemic recovery that the world is finally opening up again, for travel, for business, and for connection.

Sanwo-Olu said the COVID-19 pandemic has affected global travel, affected trade, tourism, supply chain; even the way people greet and communicate. ”So a conference and an exhibition of this nature, taking place as the world slowly reopens, offers a unique opportunity for us to rethink the ways for us to bring about new ways and new paradigm shift. ”And it will be a way in which we do business and create and trade and investment across our various countries and continents. ”We must trade and invest for the new world that the pandemic has created for us and not for the pre-pandemic versions of the world, which has gone for good.” This includes exploring ways of wrapping up the use of new and emerging technologies to improve the trade and business environment and to maximize the benefits of global trade,” he said.

The governor called on the Pakistanis to explore the business opportunities inherent in the African countries, especially in the West African region, for economic growth.” I have no doubt that your presence here will be greatly rewarded, in terms of successful business connections and trade deals that you all will be signing,” he said.

Sanwo-Olu also commended the ”Look African” policy of the Pakistani government, which he said, recognized the immense opportunity of Africa as a home to the world’s largest free trade area. He said that the Look African policy recognized Africa as the home to some of the fastest-growing economies in the world, and the pool of the world’s largest population of young people.

The Single country exhibition started on 24th Nov 2021, over 3000 visitors attended on the first day and five MOUs were signed by Pakistani Pharmaceutical companies, with trade deals worth USD 6 million with Nigerian Companies and a Senegalese company.

SBP releases Annual Report on The State of Pakistan’s Economy

The State Bank of Pakistan released today its Annual Report on the State of Pakistan’s Economy reviewing the fiscal year 2020-21. According to the report, Pakistan’ economy rebounded during FY21, with real GDP growth rising to 3.9 percent. Importantly, this expansion in economic activity was accompanied by a 10-year low current account balance that contributed to a significant build-up in foreign exchange reserves. The fiscal deficit also edged down despite Covid-related spending, leading to an improvement in the public debt-to-GDP ratio, unlike the experience of most countries across the world. Headline CPI inflation also eased during the year mainly due to relatively stable prices of non-food and non-energy items. However, overall price levels, especially of food items, remained high owing to supply-side challenges.

The report notes that the economic turnaround was facilitated by exceptional management of the Covid health pandemic, as well as a prompt and targeted monetary and fiscal response to counter its impact on economic growth and livelihoods. The SBP’s liquidity support amounted to around 5 percent of GDP by the end of FY21, featuring a combination of policy rate cuts as well as several targeted and time-bound measures, such as the Temporary Economic Refinance Facility (TERF) for promotion of new investment, Rozgar payroll financing scheme to prevent layoffs, the Refinance Facility to Combat Covid to provide concessional financing to construct hospitals and facilities to combat COVID, and temporary loan deferments and restructurings to provide temporary liquidity relief to small and big businesses as well as individual borrowers. Other policy initiatives to bolster economic activity included: (i) promoting digitization in the economy; (ii) temporarily relaxing concessionary credit and realization and settlement of export proceeds and trade loans; (iii) incentivizing housing and construction finance and promoting provision of mortgages for low income households; and (iv) providing forward guidance for the near-term monetary policy stance to facilitate economic decision-making amid Covid-related uncertainty.

Similarly, the government provided targeted fiscal support of around 2 percent of GDP through an economic stimulus package, which covered over 15 million families through emergency cash transfers. In addition, the government introduced various incentives to prop up activity in agriculture, manufacturing and export sectors during FY21.

The report highlights that a broad-based recovery in real GDP growth was recorded. Led by the favorable supply and demand dynamics as well as a low base effect from the Covid-led contraction in FY20, large-scale manufacturing posted a 14.9 percent increase in FY21. Though the growth in agriculture was slightly lower than in FY20, the production of wheat, rice and maize rose to historic levels. The cumulative increase in the production of these crops offset the decline in cotton production. The improvement in the commodity-producing sectors and a surge in imports led to a sharp recovery in wholesale and trade services in FY21.

The recovery in economic activity was also enabled by a significant expansion in credit offtake by the private sector. The SBP’s concessionary refinance schemes, such as TERF and the Long-Term Financing Facility, played a major role in driving fixed investment loans during the year.

The report also notes that the economic rebound was achieved without a worsening of macroeconomic imbalances, as the overall policy mix was still prudent. The current account deficit reduced substantially amid record high workers’ remittances and export receipts, and contributed to the US$ 5.2 billion increase in the SBP’s FX reserves during the year. The country also retained access to sizable external financing, with inflows received from the IMF and other multilateral and bilateral creditors; the issuance of Eurobonds after a long hiatus; and deposits and investments from non-resident Pakistanis via the Roshan Digital Accounts.

The report points out that the recovery in exports was driven by the continued adherence to the market-based exchange rate system; provision of subsidized inputs; lower duties on imported raw materials; and the fast-tracking of GST refunds. Also, the impact of some deflected orders from competitors as Pakistan emerged faster from the Covid shock helped boost textile exports. The higher exports partially offset a significant rise in import payments, which surged amidst the upswing in economic activity; supply-side challenges in wheat, sugar and cotton; and elevated international commodity prices. These pressures became more prominent towards the end of the year, leading to a 3.0 percent depreciation of the PKR against the US Dollar during the fourth quarter; during Jul-Mar, the PKR had appreciated 10.0 percent, mainly due to the accumulated current account surpluses.

Meanwhile, the fiscal deficit reduced to 7.1 percent of GDP, from 8.1 percent in FY20. Restrained non-interest current expenditures allowed for undertaking spending on social safety nets, the economic stimulus package and provision of targeted support to various sectors of the economy. Development spending also recovered slightly after consistently declining over the past three years. However, the government had to make payment of power sector subsidies to partially clear circular debt. On the revenue side, the FBR’s tax collection improved sharply, in the wake of the economic rebound, surge in imports, and efforts to streamline tax administration. With the containment of the twin deficits and PKR appreciation, the public debt-to-GDP ratio declined to 83.5 percent in FY21.

Furthermore, average headline CPI inflation fell to 8.9 percent in FY21 – within the SBP’s forecast range of 7-9 percent. The resurgence in domestic demand did not translate into inflationary pressures amidst the presence of some spare capacity in the economy. However, inflation remained volatile during the year, because of the impact of the increase in fuel prices and power tariffs. Moreover, the food group emerged as the largest contributor to inflation during FY21, primarily because of supply-side challenges in non-perishable items.

The report maintains that addressing deep-rooted structural impediments is crucial for sustaining and improving the current growth momentum. These impediments include consistent decline in the yield of important crops (especially cotton); insufficient export coverage of imports, low and declining productivity of labor, stagnant tax-to-GDP ratio; anemic investment-to-GDP ratio; and the rising fiscal burden of the power sector. In this context, tapping the potential of Special Economic Zones (SEZ) can play an important role. The SEZs are already gaining prominence in Pakistan, given the focus of the second phase of the CPEC on enhancing business-to-business cooperation. A Special Chapter in this report provides an overview of the SEZ landscape in the country and policy recommendations to ensure that the SEZs achieve their desired objective of stimulating investments in the country.

The full report is available at the SBP’s website: https://www.sbp.org.pk/reports/annual/arFY21/Anul-index-eng-21.htm

Under-invoicing in fisheries exports should be curbed: Mahmood Moulvi

Special Assistant to the Prime Minister for Maritime Affairs Mahmood Moulvi on Monday stressed the need to curb “under-invoicing” in fisheries exports, saying that a minimum export price must be imposed in a systematic manner.

The Special Assistant made these remarks during a meeting with Muslim Mohammadi, Chairman, Pakistan Fisheries Exporters Association in Karachi.

“Under-invoicing in fisheries exports was unacceptable. Pakistan was facing difficulties in meeting its export and tax collection targets due to the scam,” Mahmood Moulvi reiterated.

He further said that Pakistan could not afford under-invoicing and illegal transfer of money through “Hawala, Hundi”, which was against the action plan of the Financial Action Task Force (FATF), adding that fishermen’s exporters were committing money laundering through under-invoicing.

“If under-invoicing will not be curbed within 15 days, the government will take action and revoke the Under-Value Export Permit,” the special assistant concluded.