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International Monetary Fund (IMF)

IMF predicts 2.5% growth rate in Pakistan this year

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IMF Pakistan

The International Monetary Fund (IMF) on Tuesday predicted a 2.5% growth rate in Pakistan this year. The IMF has unveiled its latest World Economic Outlook report, shedding light on key economic indicators of Pakistan. According to the report, the inflation rate for the current fiscal year is projected to be at a significant 23.6 percent. … Read more

No power tariff increase for energy consumers up to 200 units: PM

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power tariff

PM expressed his satisfaction with the strong ties between Pakistan and Azerbaijan. PM witnessed the signing of a framework agreement between SOCAR and PLL. Ambassador of Azerbaijan shared coming to Pakistan to share their knowledge and experience. Prime Minister Shehbaz Sharif announced that there would be no increase in power tariff for 63% of domestic … Read more

Imran fears new wave of inflation will hit countrymen

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Imran Khan inflation

Former prime minister and Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan fears that a new wave of inflation will hit the countrymen if Pakistan joins the International Monetary Fund (IMF) programme, adding that the country will be default without the programme. He further said that the country was passing through the most critical time of her … Read more

Rupee holds ground in interbank market

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Rupee

KARACHI: The Pakistani rupee closed almost flat against the dollar on Wednesday despite positive developments on the inflows front, as the macroeconomics of the country remain unstable, dealers said. The exchange rate shed one pasia to reach Rs224.71 from the previous day’s closing of Rs224.70 against the dollar in the interbank foreign exchange market. Experts … Read more

UK leader demands IMF reforms following tough Pakistani conditions

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UK leader demands IMF reforms
  • IMF attaches brutally severe and regressive terms to loans.
  • Unattractive IMF terms push countries to other lenders, which is bad for us: Lord Sarfraz.
  • Ghana, Sri Lanka, and Nigeria had to meet severe standards, he said.

Lord Aamer Sarfraz, Prime Minister Boris Johnson’s Trade Envoy to Singapore, has urged the UK government to reform the International Monetary Fund (IMF) with its allies.

He told, “The IMF attaches brutally severe and regressive terms to loans. Unattractive IMF terms push countries to other lenders, which is bad for us. We must ensure the IMF offers acceptable credit terms.”

The UK PM’s envoy’s declaration comes as numerous South Asian governments seek loans from the Washington-based lender.

Pakistan secured a staff-level deal with the IMF after removing oil subsidies and raising taxes, sparking inflation.

A recent Oxfam research indicated that 85% of IMF COVID-19 grants in the first year of the pandemic favored austerity. IMF study shows that austerity worsens inequality after pandemics.

He said IMF requirements for Kenya have hurt its poorest people the most, with record food and energy costs. Ghana, Sri Lanka, and Nigeria had to meet severe standards, he said.

He added that more restrictions could hurt the poorest in these countries.

Lord Sarfraz asked Liz Truss and Rishi Sunak to improve four areas.

First, he added, “IMF should resume conditionality-free financing. Second, loan conditionality should be discontinued.”

“Third, the IMF should support progressive tax measures instead of austerity measures. Businesses and public society should have a say in IMF credit programs.”

He said that the UK is IMF’s fifth-largest shareholder and should promote reforms with European and American friends after the new PM takes office.

 

 

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Government plans to impose additional taxes worth Rs. 30 bn

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Government impose additional taxes
  • Money Bill will be introduced before to the IMF Executive Board meeting at the end of August.
  • The Finance Ministry plans to collect additional taxes to pay Pakistan State Oil (PSO).
  • There have been widespread worries that PSO may go into default because of increasing overseas payments.

The federal government has made the decision to introduce the Money Bill before the International Monetary Fund (IMF) Executive Board meeting at the end of August.

According to sources, the government plans to issue an order to collect 30 billion rupees worth of new taxes.

They further disclosed that the Federal Board of Revenue (FBR) had already taken action in this regard.

The Finance Ministry plans to collect these additional taxes to pay Pakistan State Oil (PSO). There have been widespread worries lately that PSO may go into default because to increasing overseas payments.

The government has also decided to give small businesses a tax break on their electricity expenses, according to FBR sources.

More taxes would be implemented in order to lessen the effect of this tax reduction on the goal of revenue collection.

Due to overwhelming criticism from the business community, according to Finance Minister Mifath Ismail, the government would exempt small merchants using less than 150 units from paying taxes on their electricity bills.

 

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Rupee: Worst month since 1972

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UNISAME calls for steps to curb further rupee depreciation
  • The largest monthly decrease in history was in July, when the local currency fell by about Rs34.5, or more than 14 percent.
  • State Bank of Pakistan’s foreign exchange holdings have decreased by $7.811 billion, reaching $8.575 billion in July.
  • Heavy imports and rising commodity costs are to blame for the current account gap’s recent increase.

The Pakistani rupee experienced its worst month since 1972 amid a shortage of dollars and worries over a delay in an International Monetary Fund (IMF) rescue program, according to The News on Saturday.

The largest monthly decrease in history was in July, when the local currency fell by about Rs34.5, or more than 14 percent, versus the US dollar due to fears of a potential default and record-low foreign exchange reserves.

It should be mentioned that it is the second-worst global loss of the month after the value of the currency of Ukraine.

The nation is attempting to allay concerns that it could follow Sri Lanka into default this year as fresh political uncertainty following the Punjab by-elections cast doubt on its ability to secure its IMF loan tranche.

Ankur Shukla, a Mumbai-based analyst for Bloomberg Economics, asked: “What’s causing the recent plunge? Politics, according to the finance minister, are to blame. The governor of the central bank points to the rising dollar.

The underlying motivation is simpler: concern that the nation might not get IMF assistance swiftly enough to avoid following Sri Lanka into default.

The sharpest loss in the rupee demonstrates the mounting worries about the nation’s poor foreign liquidity position. Since February, the State Bank of Pakistan’s (SBP) foreign exchange holdings have decreased by $7.811 billion, reaching $8.575 billion in July, or almost six weeks’ worth of imports.

The current account deficit, meanwhile, increased from $2.8 billion to $17.4 billion in July-June (the fiscal year 2021-22) from the previous year. Heavy imports and rising commodity costs, particularly for oil, are to blame for the current account gap’s recent increase.

In response to market unease over political unpredictability postponing the IMF rescue for the country, the rupee, and the nation’s dollar-denominated bonds have fallen.

By getting billions of dollars from the Washington-based lender and countries like China and Saudi Arabia, Pakistan is aiming to ease worries that it may follow Sri Lanka into default this year.

In a research report, Arif Habib Limited claimed that the political risks and shifting paradigms had a negative impact on foreign investors’ and creditors’ trust, which had a significant negative impact on the currency.

“Although we think the rupee still has a long-term tendency to depreciate, in the near future, we anticipate some stability to be restored. We credit SBP efforts to reduce market speculation as well as inflows from bilateral and multilateral creditors, IMF inflows, and strengthening of some macroeconomic factors for this short-term stability.

Investors’ nerves are calmed by news that Pakistan’s army leader has asked the US to help expedite $1.2 billion in additional funding for Pakistan and by anticipation of early elections.

The rupee was able to recoup some of its losses and ended Friday at 239.37 to the dollar. On Thursday, it reached a low of 239,94. The rupee increased 0.24 percent from one day to the next.

The local currency recovered after experiencing a 13.31 percent decline in the previous ten trading sessions. The rupee, meanwhile, continued to experience intense pressure on the street market. To settle at 244 versus the dollar, it lost 4 rupees.

 

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IMF to help Bangladesh after loan request

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IMF to help Bangladesh
  • Bangladesh’s $416 billion economy has long been among the fastest-growing in the world.
  • Rising energy and food costs have increased the country’s import bill and current account imbalance.
  • The International Monetary Fund (IMF) will speak with Bangladesh about its request for assistance.

After Sri Lanka and Pakistan both requested loans, Bangladesh became the third nation in South Asia to do so on Wednesday, prompting the International Monetary Fund (IMF) to say that it would speak with Bangladesh about its request.

Bangladesh’s $416 billion economy has long been among the fastest-growing in the world, but the Russia-Ukraine war’s rising energy and food costs have increased the country’s import bill and current account imbalance.

According to the IMF, Bangladesh had expressed interest in the organization’s new Resilience and Sustainability Facility, which aids nations in addressing climate change concerns, and had also asked for talks to begin on an “accompanying IMF program.”

A representative for the IMF stated, “The IMF stands ready to support Bangladesh, and the staff will engage with the authorities on program design in accordance with the established norms and procedures of the Fund.”

The program design talks will include conversations about the level of assistance.

Bangladesh’s finance minister earlier in the day told reporters that the country’s macroeconomic conditions were good and that the government would only accept an IMF loan if the circumstances were favorable.

“We will accept the IMF requirements if they are favorable to the nation and consistent with our development strategy,” Minister AHM Mustafa Kamal said.

“An IMF loan request does not indicate that Bangladesh’s economy is in dire straits.”

Funds can only be used for up to $1 billion, or up to 150 percent of Bangladesh’s quota, under the IMF’s resilience and sustainability trust.

According to a report in Bangladesh’s Daily Star newspaper on Tuesday, the country requested a total of $4.5 billion from the IMF, including assistance with its budget and balance of payments.

The export-oriented clothing industry, which is the backbone of the nation’s economy, is bracing for a slowdown as important clients like Walmart are burdened with backlogs as people prioritize essentials due to inflation.

Remittances are Bangladesh’s second-largest source of foreign money after clothing, and the nation has a population of around 170 million.

As of July 20, its foreign exchange reserves were down from $45.5 billion a year earlier to $39.67 billion, or slightly over five months’ worth of imports.

Its current account deficit from July to May was $17.2 billion, up from a deficit of $2.78 billion in the same period the previous year as both its trade deficit and remittances decreased.

 

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IMF slashes growth projection; predicts global ‘recession’

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  • IMF revised its projection for the global economy in a study released on Tuesday.
  • More threats are emerging, including the potential for Russia to stop the supply of gas to Europe.
  • The top three economies in the world are all experiencing stagnant growth, the IMF stated.

Risks are increasing despite the fact that the global economy is already in turmoil.

The International Monetary Fund (IMF) revised its projection for the global economy in a study released on Tuesday as it anticipated significant slowdowns in the world’s three largest economies—the United States, China, and Europe.

The report noted that these downturns, along with the ongoing conflict in Ukraine, faster-than-expected inflation, and tighter monetary policy around the world, have continued to batter the already weak global economy.

From 6.1 percent in 2021, the IMF now predicts that the global economy will expand by just 3.2 percent this year.

Only 2.9 percent growth is projected for next year, which is only marginally better than the 2.5 percent growth level that the IMF has historically regarded as the threshold for a global recession.

However, that forecast is predicated on the status quo. More threats are emerging, including the potential for Russia to stop the supply of gas to Europe. According to the IMF, that would increase inflation even further and reduce this year’s global growth to approximately 2.6 percent, which is just shy of the hot zone.

According to the IMF, such a scenario may lead to an official recession the following year, which would further slow global growth to just 2%. Only five times since 1970 have we seen growth that weak, according to the IMF.

In April, the IMF revised its outlook for the world, comparing the effects of Russia’s invasion of Ukraine to an “earthquake.” At that time, it had estimated growth of roughly 3.6 percent for the years 2022 and 2023.

The IMF’s director of research, Pierre-Olivier Gourinchas, stated in a blog post on Tuesday that “the prognosis has deteriorated markedly.” “Only two years after the last one, the globe may soon be on the verge of another one. “The top three economies in the world are all experiencing stagnant growth.

The spike in prices has left American consumers with less purchasing power, which has resulted in lower-than-expected consumer expenditure, the IMF stated.

The group noted that Covid-19 lockdowns in China have continued to hurt the economy and caused a slowdown that “has been harsher than anticipated.” IMF projections for China’s GDP growth this year have been reduced from 4.4 percent to 3.3 percent.

That would be “the slowest [pace] in more than four decades, discounting the epidemic,” according to Gourinchas. The government’s official aim is around 5.5 percent.

With the rise in energy costs, “weaker consumer confidence, and slower momentum in manufacturing due to prolonged supply chain disruptions,” the IMF noted, the impact of Russia’s invasion of Ukraine in Europe has been more than expected.

Already, businesses are preparing for the worst. GM (GM) announced on Tuesday that it was cutting back on spending and hiring in order to prepare for a downturn in the economy.

 

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FATF grey list: Pakistan completed 32 out of 34 conditions

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Financial Action Task Force

The FATF meeting will be held in Berlin, Germany from June 14 to June 17 Pakistan is expected to be pulled off the Financial Action Task Force (FATF) grey list Pakistan has accomplished 32 out of 34 conditions of the FATF   ISLAMABAD: On June 16, Pakistan is expected to be pulled off the Financial … Read more

Strategic dialogues between Pakistan and IMF to begin today

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IMF

ISLAMABAD: The dialogues between Pakistan and International Monetary Fund (IMF) are going to start today. According to sources, official meetings have already been held by a delegation led by Finance Secretary Hamed Yaqoob Sheikh, after which strategies will be discussed between Pakistan and the IMF. Sources said that Hamed Yaqoob and acting governor SBP Dr … Read more

Rupee gains against dollar

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KARACHI: The rupee made a slight gain of two paisas against the dollar on Wednesday amid high foreign currency demand for import payments. The exchange rate ended at Rs176.41 to the dollar from the previous day’s closing of Rs176.43 in the interbank foreign exchange market. The dealers said that the market had seen dollar demand … Read more

Prime minister felicitates govt on achieving 5.37% GDP growth in three years

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CPEC

ISLAMABAD: Prime Minister Imran Khan on Friday congratulated his government on achieving the GDP growth of 5.3 per cent which led to substantial jobs creation and also raised per capita income. The prime minister wrote on Twitter that the success of the government’s economic reforms was also recognised globally. He also cited a report of Bloomberg which … Read more

IMF Board to meet on January 28 for Pakistan’s sixth review

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IMF

KARACHI: The Executive Board of the International Monetary Fund (IMF) has scheduled a meeting on January 28 for Pakistan’s sixth review under the Extended Fund Facility (EFF). The discussion, ‘2021 Article IV Consultation, Sixth Review under the Extended Arrangement under the Extended Fund Facility, and Requests for Waivers of Nonobservance of Performance Criteria and Rephasing … Read more

SBP likely to raise key policy rate by another 150bps: analysts

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Pakistan forex reserves

KARACHI: The State Bank of Pakistan (SBP) is scheduled to announce the monetary policy on December 14, 2021, in which the central bank may further increase the policy rate by 100 basis points to 150 basis points, analysts said on Thursday. In the last policy announcement on November 19, 2021, the central bank surprisingly increased … Read more

Bond yields, Kibor at two-year high

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Pakistan forex reserves

KARACHI: The local money market is witnessing a bearish spell; following a surprise increase in the cutoff yield in the treasury bills and increase in the benchmark lending rate, i.e., Karachi Interbank Offered Rate (Kibor), analysts said. The analysts at Topline Securities said after a surprise increase in the cutoff yield in the Treasury Bills … Read more

Govt to take 5 prior actions before IMF Board meeting: Tarin

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ISLAMABAD: Adviser to the Prime Minister on Finance and Revenue Shaukat Tarin has said that the International Monetary Fund (IMF) has asked the government of Pakistan to take five prior actions, including amendments in the State Bank Act, before the approval of its Executive Board meeting. In a media briefing, the adviser said after a … Read more

IMF puts more conditions before signing review agreement with Pakistan: Tarin

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Shaukat Tarin

ISLAMABAD: Adviser to the Prime Minister on Finance and Revenue Shaukat Tarin has said that the International Monetary Fund (IMF) has demanded the Pakistan government to fulfil some more conditions prior to the sixth staff-level review agreement under its $6 billion Extended Fund Facility (EFF) programme. In an informal discussion with newsmen at the Corporate … Read more

Lebanon aims to reach IMF deal by 2021 end: PM

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Lebanese Prime Minister Najib Mikati

BEIRUT — Lebanese Prime Minister Najib Mikati said on Tuesday that Lebanon has started preparing its reforms plan and it hopes to reach a deal with the International Monetary Fund (IMF) by the end of 2021, the National News Agency reported. “Lebanon relies heavily on support by the IMF to overcome its unprecedented economic and … Read more

Saudi Arabia agrees to extend oil facility to Pakistan worth $1.5 billion

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IMF expects Saudi economy to grow 2.8% in 2021

KARACHI: The Kingdom of Saudi Arabia has agreed to restart providing oil aid to Pakistan worth at least $1.5 billion annually from July 2021, which analysts believe would provide the much-needed support to the current account, and help stabilise the rupee. The Saudi offer is less than half of the previous oil facility of $3.4 … Read more

IMF Warns Pakistan Growth Rate Be Lopsided, Inflation Will Rise

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IMF Warns Pakistan Growth Rate Be Lopsided, Inflation Will Rise

The International Monetary Fund (IMF) has warned that Pakistan’s growth rate will remain at 1.5 per cent this year, while inflation and unemployment will rise. In its latest report on the Pakistani economy, the IMF said the prospects for recovery were slim this fiscal year. According to the International Monetary Fund, the economy will grow … Read more

IMF Releases $500m to Support Pakistan’s Economy: Sources

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Govt Sets High Economic Growth Targets With IMF Consent

The International Monetary Fund (IMF) has released $500 million to support Pakistan’s economy. According to sources, this amount of money has been given to Pakistan by the IMF for the third instalment of the loan program. Pakistan has borrowed $6 billion from the IMF and Pakistan has so far received 1. 1.95 billion from the … Read more

Third round of Budget negotiation successfully completed

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ration

The third round of budget negotiations between Pakistan and the International Monetary Fund (IMF) have been successful in which some important decisions have been considered. The budget talks between Pakistan and the IMF have also agreed to increase salaries and pensions, and the IMF has agreed that electricity and gas will not be expensive until … Read more

IMF advises UK, EU to extend post-Brexit trade deal talks

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IMF Advises

International Monetary Fund IMF advises United Kingdom and European Union to extend the period to negotiate a post-Brexit trade deal. Media reports said Kristalina Georgieva The Managing director of International Monetary Fund IMF advises it would be wise to extend the period. She said because of the “unprecedented uncertainty” arising from the pandemic it would … Read more

FATF approves Pakistan’s progress report

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FATF approves Pakistan progress report

Pakistan has submitted the progress report to Financial Action Task Forces (FATF), over which, FATF has expressed its satisfaction over Pakistan’s measures and strict implementation of laws for curbing money laundering. After the submission of Pakistan’s report, Indian lobby’s conspiracy in the FATF’s APG for downgrading Pakistan to the blacklist has been failed. FATF has … Read more

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