Issue 18

Budget Study Centre   Issue 18
June 26, 2018


Fortnightly Budget News Alerts

Current account deficit rises to $16bn

The Dawn (June 21, 2018)

KARACHI: The current account deficit rose to $16 billion in the first 11 months of this fiscal year, an increase of 43 per cent from the same period last year, according to data released by the State Bank on Wednesday. According to SBP the deficit rose to $15.961bn during the July-May period of 2017-18 against $11.14bn in the corresponding period last year. As a percentage of GDP, the current account deficit rose to 5.5pc from 4pc of GDP in the same …
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Circular debt swells Rs40 billion in just three weeks

The Express Tribune (June 21, 2018)

ISLAMABAD: The circular debt has grown Rs40 billion in first three weeks of the current caretaker government, reaching close to Rs550 billion. “The circular debt stood at Rs507 billion on May 31, the last day of the previous government, but it increased Rs40 billion to Rs547 billion in June,” revealed Hub Power Company Chief Executive Officer Khalid Mansoor while briefing the Senate special committee on circular debt …
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Uncertainty results in currency plunging to Rs 125 in open-market

The Express Tribune (June 21, 2018)

KARACHI: Speculation and uncertainty over Pakistani rupee’s value against the US dollar has pushed currency dealers to sell it a record rate of Rs125 on Wednesday, widening the spread with the inter-bank market. As Pakistan desperately moves to arrest the slide of its foreign exchange reserves, the rupee has lost value in both inter- bank and open markets, with the spread between the two going as high as Rs3.52 as currency dealers remained worried over its

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EU set to push for WTO reforms to ease global trade tensions

Business Recorder (June 19, 2018)

Japan left unchanged its assessment that the economy is gradually recovering, showing policymakers remain confident of a moderate upturn after a contraction in the first quarter. “Japan’s economy is gradually recovering,” the Cabinet Office said in its monthly economic report for June on Tuesday. That was unchanged from the previous month. There was also no change to its assessment that consumer spending is “recovering” and its view that

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Japan sticks with assessment economy is ‘gradually recovering’

The Daily Times (June 20, 2018)

BRUSSELS: European Union countries will commit to drive reform of the World Trade Organization to ensure trade is both free and fair, assuming their leaders adopt draft conclusions prepared ahead of next week’s EU summit. EU leaders will meet in Brussels on June 28-29 to discuss a range of issues, including migration and security as well as trade, which has taken on added importance after US President Donald Trump imposed import tariffs on EU steel

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Finance minister seeks support for success of amnesty scheme

The Express Tribune (June 19, 2018)

KARACHI: The caretaker government, with its limited mandate to fix the faltering economy, has urged bankers and stockbrokers to play their role in making the tax amnesty scheme successful and the first dollar-based savings certificates for overseas Pakistanis to shore up the critically low foreign currency reserves. To make the scheme successful, the government is ready to make amendments to relevant laws in order to remove the emerging…..

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Trump sets $50bln in China tariffs; Beijing wows to strike back

The News (June 16, 2018)

WASHINGTON: US President Donald Trump said he was pushing ahead with hefty tariffs on $50 billion of Chinese imports on Friday, and the smoldering trade war between the world’s two largest economies showed signs of igniting as Beijing immediately vowed to respond in kind. Trump laid out a list of more than 800 strategically important imports from China that would be subject to a 25 percent tariff starting on July 6, including…
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Budget deficit widens to Rs2.1tr, far exceeding FY18 target

The Express Tribune (June 14, 2018)

ISLAMABAD: The budget deficit is estimated to have widened to roughly Rs2.1 trillion in 11 months of the current fiscal year, of which nearly 30% was recorded in last two months of the Pakistan Muslim League-Nawaz (PML-N) government, indicating negligence of the finance ministry. Initial estimates of fiscal operations suggested that the budget deficit from July through May of fiscal year 2017-18 could have shot up to Rs2.1 trillion or 6.1% of …

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Pakistan braces for higher inflation as rupee weakens

The Express Tribune (June 13, 2018)

KARACHI: Contrary to the previous two rounds of rupee devaluation, this time the KSE-100 Index underwent a rather subdued ride when the currency weakened against the US dollar. Analysts say the third round of rupee weakening, which came against expectations and assurances given by the PML-N government, has left investors bewildered at the extent of the plunge, sending them ducking for cover as macroeconomic………..

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No mandate to seek IMF package, says finance minister

The DAWN (June 13, 2018)

ISLAMABAD: Highlighting serious issues relating to current account and fiscal deficit, caretaker Finance Minister Dr Shamshad Akhtar on Tuesday said the interim government had no mandate to sign any new agreement or start negotiations with the International Monetary Fund (IMF) for a bailout package, stressing that any decision to that effect should be taken by the upcoming elected government. She also said that market forces should decide the …..

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Pakistan’s trade deficit widens to $34 billion

Daily Times (June 12, 2018)

KARACHI: Pakistan’s trade deficit in eleven months of outgoing fiscal widened to $33.88 billion from the $29.88 billion reported in corresponding period of last fiscal, official data showed on Monday. The overall trade deficit widened by 13.40 percent in July-May period of Fiscal Year 2017-18 (FY18) as compared to the same period of FY17, reported the Pakistan Bureau of Statistics (PBS). The overall exports in eleven months of FY18 increased by 15.28 percent

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Overseas Pakistanis remit $18 billion in 11MFY18, up by2.95%

Daily Times (June 12, 2018)

KARACHI: Overseas Pakistani workers remitted $18028.24 million in the first eleven months (July to May) of FY18, showing a growth of 2.95 % compared with US $17511.12 million received during the same period in the preceding year. According to State Bank of Pakistan, during May2018, the inflow of worker’s remittances amounted to US $1771.24 million, which is 7.30% higher than April 2018 and 5.13%lower than May2017. The country wise details for the

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Pakistan uses Chinese trade finance to repay foreign debt

The Express Tribune (June 10, 2018)

ISLAMABAD: Pakistan has largely exhausted a Chinese trade financing facility to repay its foreign debt as the finance ministry struggles to find another source to finance the current account deficit in June in a bid to keep foreign currency reserves at current levels and prevent them from falling further. The State Bank of Pakistan (SBP) has largely tapped $1.5 billion in additional trade financing facility available under the China-Pakistan currency swap

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