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Exports of Pakistan show signs of recovery due to...

July 02, 2020:  The exports of Pakistan are showing clear signs of recovery, due to the efforts of the exporters to diversify the products, in the wake of new opportunities arising amid COVID 19 pandemic, and support from the Government in this regard. This was stated by Advisor to the Prime Minister on Commerce and Investment, Mr. Abdul Razak Dawood, while chairing a meeting to discuss the export strategy of Pakistan, at the Ministry of Commerce today. Seniors officers of the Ministry attended the meeting.

During the briefing, the current facts and figures related to the trend of exports were presented to the Advisor. It was explained that before the outbreak of the pandemic near the end of February 2020, Pakistan’s exports were on an upward trajectory and it showed an increase of 14% in dollar value terms, as compared to the same month last year. This momentum for February 2020 continued despite the initial outbreak of Covid-19 in the country, as the first 10 days of March 2020 registered an increase of 13% as compared to last year.

In mid-March, because of a lockdown to control the spread of the pandemic, followed by a global economic slowdown, the export-oriented industry in Pakistan suffered as reflected in March 2020 figures, which showed the decline in growth by 8% compared to the same period last year. The situation persisted and, in April 2020, the exports showed a downward trend of 54% as compared to April 2019.

After the month of April and with the efforts of the Government to encourage the export sector, the first signs of recovery were observed in the month of May 2020, which only saw a 33% decline in exports as compared to the same month last year. The momentum continued in June 2020, as the downward trend, which stood at 54% in April, 33% in May, has been brought down to a single-digit figure of 6% in dollar value terms.

In addition to a positive trend in exports, the figures also indicate the strategies for geographical and product diversification are bearing fruits. For instance, there is a significant improvement in exports to Africa, which is an outcome of ‘Look Africa Policy’, as well as the Middle East. Similarly, the export of Meat products has shown good growth, while Tobacco shows a promising future. Similarly, in the overall textile sector, value-added products have shown improvement while, at the same time, the export of cotton yarn and fabric has gone down. As a result of overall progress, the trade balance has improved by $8.7 Billion, which shows that the Current Account Deficit is also at manageable levels.

Commenting on the trends of exports, Mr. Razak Dawood underscored that the export sector has been given a new impetus by the Government by allowing the export of Personal Protective Equipment, barring three items, which is indicated by the surge of exports in the month of June. He added that other policies of the Government, for diversification of exports and international markets, will enable us to continue the thrust in the current fiscal year as well. The Advisor noted that the traditional exports of Pakistan, like garments and bedwear, etc., are also picking up and would show improved performance in the new financial year 2020-21.

Talking about the export strategy, the Advisor reiterated that greater emphasis will be on product diversification, including engineering products, pharmaceuticals, agro products, and services. He remarked that the beginning of export of home appliances and geographical diversification of cement export to China and the Philippines are clear signs of success. Mr. Razak Dawood added that he remains optimistic towards achieving the export targets in the new fiscal year and the policy of product and geographical diversification will continue to be actively pursued for success in this regard.

Press Release

SBP calls meeting of Chambers of Commerce to seek...

July 02, 2020: Governor State Bank of Pakistan (SBP), Dr. Reza Baqir held an online meeting with the business community today to seek feedback on an ongoing project of automation of payment of tax refunds by SBP. The meeting was attended by the office-bearers of Pakistan Business Council (PBC), Federation of Pakistan Chambers of Commerce and Industries (FPCCI), and Chambers of Commerce and Industries of various cities.

Governor SBP in his opening remarks introduced SBP’s Automation of Payment of Tax Refunds Project saying that after automation of government’s revenue collections, efforts are underway by SBP to automate the government’s payments to ensure transparency, efficiency and public convenience.  He said that improving ease of doing business is one of the shared goals of the government and SBP for its significant potential impact on boosting economic activity in the country.

Governor Baqir remarked that Automation of payment of Tax Refunds Project is a part of SBP efforts in this direction in collaboration with FBR and Pakistan Customs.  Adding further, he said that since the project is ultimately going to benefit the businesses, it is important that the system is developed in consultation with all the stakeholders including the businesses.  He emphasized that, in this regard, feedback of businesses is very important since they are the key stakeholders.

A senior SBP official gave a detailed presentation on the project elaborating that the project constituted two broader components,  automation of payment of duty drawback claims and the automation of payment of sales tax refunds. 

After highlighting the issues in the existing mechanisms, he explained how the automation will simplify the processes and bring efficiency in terms of time-saving and human resources.  He highlighted that there will be minimal human intervention in processing and payment of refund claims as the system generated payment messages will be sent to SBP on a real-time basis through an interface between FBR/Pakistan Customs and SBP for crediting the funds in the claimants’ account.

The representatives of Chambers of Commerce appreciated the initiative of SBP and provided valuable feedback. They also assured their cooperation to SBP in the development of this project of national importance.

Press Release

State Bank’s Forex Reserves Increase by USD 1,269.80 Million

Jul 02, 2020 (MLN): Pakistan's Forex Reserves increased by USD 1,240.90 Million or 7.42% and the total liquid foreign reserves held by the country stood at USD 17,971.00 Million on Jun 26, 2020.

According to data published by the State Bank of Pakistan (SBP) its reserves increased by USD 1,269.80 Million.

Summary of Holding and Weekly Change

Foreign reserves held byJun 26, 2020Jun 19, 2020Change% Change
State Bank of Pakistan11,231.009,961.201269.8012.75%
Net Foreign Reserves Held by Banks6,740.006,768.90-28.90-0.43%
Total Liquid Foreign Reserves17,971.0016,730.101240.907.42%

Amount in USD Million

During the week ended June 26, 2020, SBP received around US$2,046 million official inflows, including $737 million from World Bank, US$503 million from Asian Development Bank, US$500 million from Asian Infrastructure Investment Bank and US$300 million as GOP loan disbursement from China.

After incorporating government external debt payments of US$ 809 million, SBP reserves increased by US$ 1,270 million to US$ 11,231.0 million.

During the current week, SBP has received additional US$1,000 million as GOP loan disbursement from China. These funds will be part of SBP weekly reserves data as of July 03, 2020 to be released on July 09, 2020.

 

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PMEX Commodity Index closes at 4,422 points

July 02, 2020: On Wednesday at Pakistan Mercantile Exchange Limited, PMEX Commodity Index edged higher by 5 points only and closed at 4,422-level. The traded value of Metals, Energy and COTS/FX was recorded at PKR 12.947 billion and the number of lots traded was 15,881.

The major business was contributed by Gold amounting to PKR 8.674 billion, followed by NSDQ 100 (PKR 1.119 billion), Silver (PKR 789.755 million), DJ (PKR 646.515 million), Currencies through COTS (PKR 605.550 million), Crude Oil (PKR 441.711 million), Platinum (PKR 346.001 million), SP500 (PKR 196.623 million), Natural Gas (PKR 84.422 million) and Copper (PKR 43.149 million).

In agriculture commodities, 2 lot of Wheat amounting to PKR 8.297 million and 4 lot of Cotton amounting to PKR 2.079 million were traded.

Press Release

Wall Street climbs at open on jobs data

July 02, 2020: Traders cheered by better-than-expected unemployment figures pushed Wall Street stocks higher at the open Thursday, following a session in which the Nasdaq hit a new record.

About 20 minutes after the opening bell, the Dow Jones Industrial Average was up 1.7 percent or more than 420 points at 26,162.66.

The tech-rich Nasdaq climbed 1.3 percent to 10,290.39, while the broad-based S&P 500 was up 1.5 percent at 3,161.21.

The Labor Department reported that the US gained a surprising 4.8 million jobs in June, pushing the unemployment rate down to 11.1 percent and providing a boost to an economy hammered by coronavirus shutdowns.

But authorities have rolled back reopening measures and forced some business closed again as virus cases surged later in the month, particularly in the south and west, which could jeopardize the latest job gains.

And the US is still losing jobs, the Labor Department said in a separate report showing 1.43 million people filing initial claims for unemployment benefits last week, only slightly less than the prior week. Layoffs have averaged 1.5 million a week over the past four weeks.

Just under half of the new hires in the June unemployment report were in sectors hard-hit by the business closures like leisure and hospitality.

Companies in those sectors were among Wall Street's big gainers after the open, with Delta Air Lines up 2.4 percent and United Airlines up 2.2 percent.

Cruise operator Carnival was up 2.4 percent, Norwegian Cruise Line gained 3.3 percent and Royal Caribbean climbed 3.4 percent.

Boeing also jumped 2.2 percent after US air safety regulators on Wednesday successfully completed three days of flight tests on the 737 MAX, a key step in recertifying the plane.

AFP/APP

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