Weekly News Roundup

February 16, 2020 (MLN): The departed week witnessed several important developments on regional and international front that would serve as a gateway for Pakistan to economic development.

Among various developments, the most important one was the statement issued by IMF mission Chief Ernesto Ramirez Rigo at the conclusion of the visit that Pakistan has been made considerable  progress in the last few months and all end-December performance criteria were met, and structural benchmarks have been completed.

Another major development was the assurance by Turkish President Tayyip Erdogan on Friday he would help Pakistan stay off a terrorism financing blacklist at a meeting of a global finance watchdog, a move he suggested would counter “political pressure” from Islamabad’s critics.

Meanwhile, Spokesperson of Power Division while commenting on the current status of Power Sector Circular debt said the addition to circular debt is expected to be reduced to Rs. 130billion in 2019-2020 compared to the target of 130bn in the Circular Debt capping plan.

Furthermore, to provide much needed liquidity to power sector, the govt of Pakistan will issue the second Energy Sukuk worth Rs 200 billion through the consortium of Islamic Banks, aiming at easing off the burden of longstanding circular debt issue faced by Pakistan’s economy.

Besides, Employees' Old-Age Benefits Institution (EOBI) to pay increased pension following the approval of the Board of Trustees and Federal Cabinet, the raise would be Rs 2000 per month.

On the upside, Asian Infrastructure Investment Bank (AIIB) expressed interest in financing to development projects of National Transmission and Dispatch Company Limited (NTDC) in line with the government priorities.

On Thursday, Morgan Stanley Capital International (MSCI)  announced the results of the February 2020 Quarterly Index Review of the MSCI Equity Indexes as per which there were no changes in the MSCI Pakistan Index under MSCI global standard indexes and MSCI Global Small Cap Index

On Wednesday, talks between the IMF and the government concluded with the understanding that there will be no mini budget and no new taxes before June. However, the tax collection target for FY20 has not be revised down and the government has agreed to make all out efforts to achieve the target with the focus on non-tax revenue which will require the government to speed up the privatization process and raise Rs. 400 billion from it.

The same day , Federal Cabinet  gave approval to a subsidy of two billion rupees per month for a period of five months to Utility Stores Corporation for provision of edible items of daily use to the people at affordable rates.

On Tuesday, Adviser to the Prime Minister on Finance and Revenue, Dr Abdul Hafeez Shaikh has assured the American Business Council full support of the government for their business endeavors and said the government would continue to interact with the business community and investors to further streamline the business and investment regime in the country.

Additionally, the government chalked out a comprehensive plan to boost flow of foreign remittance in the country by incentivizing the Pakistani expatriates, using legal channels to send money to their homes.

Also, Pakistan and France signed a grant financing agreement of zero point five million Euros to finance technical assistance for capacity building of the Private Power and Infrastructure Board, the project of Ministry of Energy.

With regards to privatization of power plant, the delegation from Mitsui & Co. and a delegation from Thailand Investment Company, Global Power Synergy Public Company Limited (GPSC), on Monday, were briefed about the power plants and their existing and future status and current efficiency level as well.

Lastly, a report by Bloomberg revealed that the government is planning to raise Rs 200 billion through the selling of Sukuk to ease off the burden of the power sector’s astounding circular debt.

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