Weekly Economic Roundup

August 16, 2020 (MLN): A brief account of the latest financial data releases and economic developments over the course of the week is highlighted below:

• The Weekly Sensitive Price Indicator (SPI) for the Combined Group decreased by 0.06% during the week ended Aug 06, 2020 while the SPI increased by 8.47% compared to the corresponding period from last year.

• The non-government sector has retired another net sum of Rs.17.47 billion during the week ended July 31, 2020, which brings the cumulative net retirement for ongoing fiscal year FY2021 to Rs.107.45 billion. The net retirement as of prior week was recorded at Rs.89.97 billion.

• The government of Pakistan has accumulated Rs.5.87 billion during the week ended July 31, 2020, which brings its total net retirement for ongoing fiscal year FY2021 to Rs.259.34 billion. As of prior week, the government had retired a net sum of Rs.265.21 billion.

• The Government has signed a new agreement with the Independent Power Producers (IPPs) to bring down the cost of power generation and reduce circular debt.

• Pakistan's Forex Reserves decreased by USD 44.60 Million or 0.23% and the total liquid foreign reserves held by the country stood at USD 19,518.30 Million on Aug 07, 2020.

• Overseas investors purchased net Rs.1.79 billion worth of securities during the week ended August 7, 2020, whereas last week, the accounts observed a net sale of Rs.1.69 billion.

• The Supreme Court of Pakistan on Thursday gave its verdict on the long-pending issue of GIDC, thereby passing judgment in favour of the government. The apex court also ordered the companies to pay the outstanding GIDC amount of Rs. 417 billion.

• 5 Bills related to Financial Action Task Force (FATF) were passed by the National Assembly. The Bills include Anti-Terrorism (Amendment) Bill, 2020; The Limited Liability Partnership (Amendment) Bill, 2020; The Companies (Amendment) Bill, 2020; The Control on Narcotic Substances (Amendment) Bill, 2020 and the Islamabad Capital Territory Trust Bill, 2020.

• The Economic Coordination Committee (ECC) of the Cabinet on Wednesday gave go-ahead in principle to the payment of all liabilities and responsibilities resulting from a debt of US$ 105 million secured by the Pakistan International Airlines Corporation Limited (PIACL) owned Roosevelt Hotel in Manhattan, New York.

• Another fresh inflow of $10 million has been recorded in government-backed short-term debt instrument (T-bills) in a single session i.e. August 11, 2020, bringing the net inflow for the day at $10.5 million.

• The total money supply circulating within the economy in June 2020 has been recorded at around Rs.24.96 trillion, according to provisional accounts on Monetary Aggregates for the month, maintained by the State Bank of Pakistan.

• Pakistan’s fiscal deficit in FY20 stood at 8.1 percent of the GDP, compared to the deficit of 8.9 percent of GDP in FY19.

• The LSMI output decreased by 7.74% for June 2020 as compared to June 2019 and increased by 16.81% when compared to May 2020.

• The National Assembly was informed on Tuesday that fifty billion rupees have been set aside to provide subsidy to the farmers on different agriculture-related inputs.

• Moody's Investors Service, (“Moody's”) on Wednesday has confirmed the B3 long-term local-currency and Caa1 foreign-currency deposit ratings of five Pakistani banks: Allied Bank Limited (ABL), Habib Bank Ltd. (HBL), MCB Bank Limited (MCB), National Bank of Pakistan (NBP) and United Bank Ltd. (UBL). The outlook on all Pakistani banks' long-term local currency deposit ratings has changed to stable from ratings under review.

• The sale of passenger cars during the month of July 2020 was recorded at 10,123 units against a total production of 8,280 units, which is around 7.7 percent lower as compared to the 10,968 units sold in the same month of last year.

• Sazgar Engineering Works Limited sold a total of 1,115 units of three-wheelers, including auto-rickshaws, against the production of 1,268 units during the month of July 2020.

• Pakistan has registered record enhancement in the export of fruits & vegetables despite coronavirus global pandemic. The Financial year 2019-20 has witnessed an overall increase in export of fruits & vegetables by 12.5 % amounting to USD 730 million which is an ever-highest revenue in terms of foreign exchange generation.

• Pakistan’s goods and services trade with Italy witnessed a surplus of 3.13 percent during the fiscal year (2019-20) as compared to the corresponding period of last year.

• The second month of the ongoing fiscal year (FY21) has so far witnessed a net inflow of $4.453 million in short-term government securities particularly T-bills.

• The net sale of securities by overseas investors for the week ended July 30, 2020 clocked in at Rs.1.69 billion, i.e. around Rs.4.39 billion higher than last week's numbers.

• Pakistan has requested Saudi Arabia and the IDB’s Islamic Trade Finance Corporation (ITFC) to extend the oil facilities on deferred payment to the country for another year.

• The National Electric Power Regulatory Authority (NEPRA) has made adjustments in the approved tariff on account of variations in the fuel charges from November 2019 to June 2020 for all power distribution companies.

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