ISLAMABAD AUG 28 (DNA) – The Institute of International Finance has said that the exchange rate flexibility in Pakistan was helping the country to reduce external vulnerability.

The Washington based global association of financial industry IIF in its report “Pakistan: Commitment to Reform Faces a Test” said Pakistan’s exchange rate was market-determined and had depreciated by 22 pc in real effective terms since 2017.

The external position is strengthening. The effects of currency depreciation and weaker domestic demand are visible, as imports dropped by 18 pc in nominal dllar terms, more than offsetting the decline in exports of 7 pc, in FY 2020 (July 2019 to June 2020), the report added.

The pandemic led to a contraction in output of 0.7 percent in FY2019/20 (ending June 2020). Domestic demand declined by 2 pc, while exports of goods and services have increased by 1.6% as compared with a decline of 7.3 pc in imports of goods and services.

According to the forecasts by IIF, the economy could grow by 1.8 pc in FY2020/21 driven by some recovery in private consumption. However, risks to the economic outlook are tilted to the downside, amid uncertainty regarding the magnitude and duration of the pandemic.

Adjusted for population, fewer cases and deaths of COVID-19 have been recorded in Pakistan than in other developing and emerging economies.

These results are subject to a large degree of uncertainty, as data quality, testing capacity, and transparency vary. While the rate of new cases has recently declined, the pandemic still puts considerable stress on Pakistan’s public health system, it added.

As of mid-August, lockdown restrictions had been lifted across the country. The response measures have been adequate, supported by the IMF’s emergency financing in the amount of $1.4 billion, provided in April 2020.

Expansion of social programs has rightly focused on tackling the health emergency and supporting the most vulnerable, while stimulating economic activity.

The Central Bank of Pakistan’s (SBP) proactive liquidity initiatives and lower policy rates are propping up economic activity and safeguarding financial stability.

The policy rate has been lowered 5 times since February, a cumulative reduction of 625 bps. The authorities have also introduced a fiscal stimulus package in the amount of $5.1 billion (1.9% of GDP), which included direct transfers to wage workers and poor families, financial support to SMEs and the agricultural sector, higher subsidies for basic goods, and various tax incentives.

One-third of this amount has been implemented already, and the remaining $3.4 billion will be used in the current FY 2020-21 budget. “We expect the policy rate to remain the same in the next Monitory Policy Committee meeting, thus dampening inflationary expectations.”

The 12-month headline inflation was 9.3 pc in July 2020, y-o-y. Although rising food prices continue to exert upward pressure on inflation, weak demand is likely to keep inflation in upper single digit levels.

Workers’ remittances, which slightly exceeded exports of goods, continued their increase, supported by a more depreciated exchange rate and appropriate policy steps implemented by the authorities, including reducing the threshold for eligible transactions from $200 to $100 under the Reimbursement of Telegraphic Transfer (TT) Charges Scheme, an increased use of digital channels, and targeted marketing campaigns to promote usage of formal channels.

The decline in the trade deficit combined with higher remittances narrowed the current account deficit from 4.8 pc of GDP in FY 2019 to 1.1 pc in FY 2020. Net capital flows have more than offset the current account deficit, leading to a substantial increase in official reserves (excluding gold) to the equivalent of 2.8 months of import coverage.

While the current account deficit may widen slightly to 1.6 pc of GDP due to some recovery in imports and slightly lower remittances in FY2021, the increase in net capital inflows would lead to a further rise in official reserves.

Large fiscal deficit, on the back of low tax revenue mobilization, and high public indebtedness remain major challenges. Resistance to tax reforms and cost-recovery in the energy sector from entrenched elites could undermine the fiscal consolidation strategy and put public debt sustainability at risk.

The completion of the second Extended Fund Facility (EFF) review has been delayed pending implementation of key reforms. The narrowing of the deficit in FY 2020(ending June 2020) to 8.1 pc of GDP was largely due to one-off factors, including the jump in profit transfers from SBP to the budget, which bolstered non-tax revenue.

Spending increased by 15.6 pc due to sharp increases in interest payments on debt and social transfers. The budget for the FY 2021 envisages cuts in subsidies, freezing salaries and pensions, and increases in petroleum levie

However, rising defense spending, higher interest payments (6.3 pc of GDP), and rollover of fiscal stimulus from FY 2020 could widen the deficit to 8.7 pc of GDP, compared with a budgeted deficit of 7 pc, which is based on growth of 2.1 pc.

Public debt could rise to 86 pc of GDP by June 2021, compared with 70 pc in 2018. The external funding picture warrants caution as debt amortization remains high in years to come.

However, improvement in the current account, rollover of short-term debt, and Debt Service Suspension Initiative (DSSI) have eased Pakistan’s external financing needs and shored up its official reserves, which could increase further to $15.4 billion (excluding gold) by June 2021 (3.3 months of imports of goods and services).

The DSSI provided debt-service suspension to help Pakistan and other low-income countries to concentrate adequate resources on fighting the COVID-19 pandemic. = DNA

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LAHORE, AUG 28 (DNA) – United Arab Emirates (UAE) Ambassador to Pakistan Hamd Obeid Ibrahim Selim Al-Zehbi called on Speaker Punjab Assembly Ch Parvez Elahi at the Assembly Chambers here on Friday.

During the meeting, both talked about matters of mutual interest and peace in the region.

Ch Parvez Elahi said that UAE have always demonstrated special love for Pakistani brethren. He paid tributes to UAE for cooperation and assistance in the establishment of hospitals and other development works in Pakistan.

Ch Parvez Elahi further said that we are proud of our very old relations with UAE brother, friendship between the two countries is immortal which has been brightened and strengthened with our historical, cultural, literary, economic and social relations. He said that I believe in the future bilateral relations between Pakistan and UAE will be further strengthened.

Ch Parvez Elahi said there are vast opportunities for investment in energy, education, agriculture, livestock and other sector sectors in Pakistan from which foreign investors can adequately benefit, mutual contacts in economic and social fields friendly relations between Pakistan and UAE can be further promoted.

The UAE Ambassador said that are desirous of progress and development of both the countries, Pakistan and UAE should benefit from each other’s experts in all spheres of life. = DNA

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ISLAMABAD, AUG 28 (DNA) – Ambassador of State of Qatar Sheikh Saoud bin Abdulrahman Al Thani on Friday handed over a shipment of KN95 Masks, Medicines, Pulse Oximeters and other medical items to Minister of State for States & Frontier Regions (SAFRON) Shehryar Khan Afridi to help the Afghan refugees fight the Covid-19 pandemic.

Shehryar Khan Afridi expressed gratitude to the Qatar Ambassador and said that the donations would greatly help the Afghan refugees in fight against the pandemic. He said that Pakistan, due to the visionary and novel approach adopted in fighting the pandemic, had been successful in effectively handling the disease.

He said that the Ambassador’s passionate approach would largely help in further cementing Pakistan, Qatar friendly relationship. He said that Afghanistan is a conflict zone where humanity has suffered enormously. He said that Qatar and Turkey have greatly supported and facilitated the Syrian refugees too. He expressed gratitude to the government of Qatar for taking care of Pakistani expatriates.

Sensitizing the Ambassador over plight of Kashmiri Muslims, Shehryar Afridi said that Hindutva regime in India is targeting religious minorities for mass conversions and Muslims are being targeted specially. He said that Kashmir has become a specific area where Muslims are being martyred, imprisoned and omen are raped under a vicious plan of Muslim genocide.

Ambassador Sheikh Saoud bin Abdulrahman Al Thani said that Qatar has been working with Pakistan on plans and initiatives to help the needy and deserving.

“As a flying officer, I was trained by professional Pakistani forces and it is about time to return the favour. We have doubled the number of Pakistani labour and another 90,000 Pakistanis have been added to the Qatar workforce in the past one year. We are facilitating the visa process and we have simplified the visa process,” the Ambassador said.

The Ambassador said that the cooperation with Pakistan was a priority area for his government and he would work extensively to promote brotherhood between the two nations. = DNA

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DNA

KABUL, AUG 28 –  At least 13 people killed and three more wounded in two separate land mine blasts in southern Kandahar province on Friday. A spokesperson for the provincial governor Bahir Ahmad Ahmadi said that the first blast occurred at around 9 a.m in Patan Khel area in Spin Boldak district of Kandahar.

He added that 12 civilians were killed as their vehicle hit a roadside mine in the area. Meanwhile, a provincial council member said that nine of the victims were members of a family.

The official added that another roadside bomb hit a Mazda at around noon in the same district. Ahmadi further said that a person was killed and three more were wounded in the incident. Immediately no group yet take responsibility for the attacks.

 
This comes as violence has increased in the country despite efforts by the Afghan government to begin the peace negotiations. Meanwhile, Abdullah Abdullah, head of the High Council for National Reconciliation, on Thursday said: “he is confident that talks between Afghans will begin next week.”

Tashkent, AUG 28 –  President of Uzbekistan Shavkat Mirziyoyev signed a decree “On pardoning a group of persons serving a sentence of imprisonment, who sincerely repented of their deeds and firmly embarked on the path of correction”.

The document was signed on the eve of the celebration of the most expensive national holiday – the 29th anniversary of the proclamation of our Motherland’s independence.

The decree, in accordance with paragraph 23 of Article 93 of the Constitution of the Republic of Uzbekistan, pardoned 113 citizens, who are serving sentences for committing a crime, who sincerely repented of their deeds and firmly embarked on the path of correction.

Of the pardoned 5 persons were completely released from serving the main sentence, 53 persons were released from serving the sentence on parole, the punishment imposed on 15 persons was replaced by a softer one. In addition, the terms of imprisonment imposed on 40 persons were reduced.

Among those pardoned – 1 man over 60 years old, 2 citizens of foreign states, 105 persons who participated in the activities of banned organizations.

As part of the implementation of the decree, the responsible ministries and departments were instructed to return pardoned persons to their families and loved ones, assist them in social adaptation, attract them to useful work, choose a healthy lifestyle and take a worthy place in society.

On August 27, President of the Republic of Uzbekistan Shavkat Mirziyoyev was presented report on the effectiveness of works in the geology sector.

In his Address to the Oliy Majlis in January this year, the Head of the state noted that certain fields of science would be attached priority significance every year to secure their advanced development. This year, geology was identified as one of such.

Four resolutions have been signed by the President on these issues. Toward their execution, the industry is undergoing modernization and digitalization, prospecting works are growing in scale and efficiency.“New geologic system is being created in Uzbekistan.

The purpose sought is to cash in the natural resources for the good of the nation, create jobs and improve the wellbeing of people”, Shavkat Mirziyoyev said.Foundation has been instituted for the revival of geology as science and training modern specialists. In particular, the University of Geological Science has been established to unite four research institutions.Cutting-edge drilling and laboratory equipment was procured.

As a result, the drilling works’ productivity have increased by quarter compared to the same period last year. In addition, the number of elements discovered in ore has grown from 40 to 63. From the beginning of this year, 150 new deposits have been registered. The resources and reserves of gold, silver, uranium and copper are enhancing.

3 new gold deposits are discovered in Kuljuktau and Auminzatau mountains in Bukhara and Navoi regions, along with 2 uranium ones in Kattakurgan district of Samarkand region and Arnasay district of Jizzakh region.Moreover, mining and geological data on 32 types of reserves have been transferred to JORC international standards.

Within the framework of efforts designed to develop the agricultural sector, geological research based on express methods has been conducted on 155 thousand hectares of lands. Water reserves with 90 thousand cubic meters extraction a day have been confirmed in water-scarcity districts.Chairman of the State Committee on Geology and Mineral Resources presented report to the President.

The attraction of foreign investments towards the development of 20 new deposits was discussed during the presentation, through open and transparent procedures, by holding online bids. Instructions were given on public-private partnership in this sphere.

Next measures directed at uplifting the effectiveness of works in the sector, strengthening its normative base and boosting the investment potential were discussed.The Head of the state gave concrete instructions to double the scale of geological prospecting next year, discover new prospective fields, accelerate the introduction of state-of-the-art laboratory equipment.The State Committee on Geology and Mineral Resources has been tasked with the establishment of new prospecting on new fields based on cooperation, further expand the practice of transferring works on development of discovered deposits to the private sector.The need was noted for establishing, on the Namangan experience, constant geological expeditions, especially of hydrogeologival designation, in every region. Tasks were defined to elevate the effectiveness in the exploitation of underground soils granted for use and promote research works. Officials in charge of the sphere were tasked to devise a roadmap for the implementation of the measures identified.