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The weekly roundup of Pakistan’s economy

During the outgoing week, the equity market witnessed a volatile trend. KSE-100 index oscillated into decline as it dropped 162 points (declined 0.4% WoW) to close the week at 37,130 points. Investors’ sentiments toppled at the start of the week following the unanticipated resignation of ex- Finance Minister, Asad Umar last week. The market started the week on a negative note, losing 888pts (-2.4%) in the first two trading sessions, as participants believed that the sudden resignation may hamper the ongoing bailout negotiations with IMF, which kept the broader market sentiment depressed.

However, the market later rallied in the last three trading session on the back of higher than expected earnings of the banks and optimistic prospects from amnesty scheme, to be presented in cabinet next week, retrieving some of the earlier losses.

Furthermore, the past week brought along a series of economic events both in terms of data releases and developments in public policy.

On Friday, Prime Minister Imran Khan met Managing Director of International Monetary Fund, Christine Lagarde on the sidelines of the Belt and Road Forum in Beijing, China. The two leaders agreed on the importance of the IMF programme and to work towards an agreement for which a fund's delegation is coming to Islamabad, on April 29th, 2019 to continue technical discussions for an IMF supported program.

Meanwhile, Prime Minister Imran Khan held a meeting with Chief Executive Officer of World Bank Kristalina Georgieva on the sidelines of second Belt and Road Forum in Beijing in which he appreciated the role played by the World Bank in regional connectivity, poverty alleviation, financial management, provisional projects, DASU and other infrastructure projects and ease of doing business.

In addition to this, Pakistan and China will sign the second phase of Free Trade Agreement in Beijing on 28th April under which China has extended duty free access to Pakistan on three hundred and thirteen items. The agreement will help boost the exports of the country, besides increasing foreign exchange.

On Thursday, Moody’s Investor Service predicted a corrosive impact of the proposed transfer of government banks’ deposits to the central bank on the banking system’s funding as well as profitability; although it said access of commercial banks to stable and growing funds might alleviate liquidity pressures

On Monday, the agreement was signed among the International Islamic Trade Finance Corporation (ITFC), a subsidiary of Islamic Development Bank and the representatives of PSO, PARCO and Pakistan LNG Limited as per which, ITFC will lend $551 million to Pakistan to help the country meet its oil and liquefied natural gas (LNG) import needs.

Moreover, on Wednesday Pakistan signed a framework agreement with South Korea for various development projects worth $500 million to be completed by 2020.

The statistical data released this week apprising the economic standing of the country are listed below:

  • The weekly Sensitive Price Indicator (SPI) for the combined group has jumped by 0.37% over the week ended April 25, 2019. Meanwhile, the SPI as compared to the corresponding period of last year has increased by 12.9%
  • Net selling of securities amplified to Rs. 614 million during the week ended April 12, 2019 as compared to prior week’s figure of Rs. 18 million.
  • Pakistan’s trade deficit in services ($237 million) worsened by 24% in March 2019, as compared to the prior month ($191 million) whereas cumulative deficit ($2.5 billion) for the 9 months of ongoing fiscal year (FY19) narrowed down by 41.3% over the year.
  • The overall production of petroleum commodities has witnessed a decline of 5. 5 percent during first eight months of the current fiscal year as compared to corresponding period of last year.
  • The non-government sector has accumulated a total net debt of Rs.882.8 billion during ongoing fiscal year (FY19) as of April 12, 2019
  • Net borrowing by the government sector as of April 12, 2019 has increased to Rs 814.75 billion
  • Tea import into the country during first 9 months of current financial year reduced by 1.13 percent as compared the imports of the corresponding period of last year.
  • Urea sales have increased by 19.4% in March 2019 as compared to March 2018, as the total offtake stands at 408.5 thousand tonnes.
  • DAP sales in March 2019 trickled down from about 150.2 thousand tonnes during corresponding month of last year to 65.5 thousand tonnes, demonstrating a substantial decline of about 56.4% over the year.
  • Pakistan’s forex reserves decreased by USD 201.60 Million or 1.24% and the total liquid foreign reserves held by the country stood at US$15,994.30 million on April 19, 2019.

Copyright Mettis Link News



Posted on: 2019-04-28T13:46:00+05:00


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