CPDI BUDGET WATCH

US and China escalate trade war as total sum levied reaches $100bn

The Guardian (Aug 23, 2018)

The US and China have escalated their ongoing trade war by implementing 25% tariffs on $16bn worth of imports on both sides, bringing the amount levied to a combined $100bn (£78bn) since July. Beijing began implementing the new tariffs on Thursday, when the US said it would begin collecting extra duties in retaliation for what it claimed were unfair Chinese trade practices. “China firmly opposes [the US tariffs] and has to continue to make…….…Read More

Current account deficit balloons by 14pc

The Nation (Aug 22, 2018)

KARACHI/ISLAMABAD – The current account deficit of the country ballooned by 14 percent in July 2018. The current account deficit expanded to $2.2 billion in July 2018 as compared with the deficit of $1.93 billion in the corresponding period of the last fiscal year. During 2017-18, the current account deficit amounted to $18 billion. As a percentage of GDP, current account deficit stands at a negative 8.6% of the GDP, while during the same month last year, current account deficit accounted for a negative 7.1% of the GDP. …Read More

US-Turkey feud: Trump vows no concessions as lira stays under

The Express Tribune (Aug 22, 2018)

ISTANBUL: The Turkish lira weakened against the dollar on Tuesday after US President Donald Trump said he would give Ankara no concessions in return for the release of a detained American pastor, the latest salvo in a worsening rift between the Nato allies. In an interview with Reuters, Trump criticised Turkey on Monday over the detention of evangelical Christian pastor Andrew Brunson and said he was not concerned that his tough stance against Turkey could end up …Read More

Germany’s current account surplus hits global high

The Daily Star (Aug 21, 2018)

Germany’s current account surplus is set to remain the world’s largest this year despite increased trade tensions, the Ifo institute said on Monday, in an estimate likely to renew criticism of Chancellor Angela Merkel’s fiscal policies. The International Monetary Fund and the European Commission have for years urged Germany to do more to lift domestic demand and imports as a way to reduce global economic imbalances and stimulate.…Read More

Rs1.9 trillion of liabilities & receivables would need restructuring by new govt: Report

The Pakistan Today (Aug 20, 2018)

ISLAMABAD: As the Pakistan Tehreek-e-Insaaf (PTI) takes the reins of government this week, it is projected it would need to restructure Rs1.9 trillion worth of liabilities and receivables of government-owned entities. The new government, according to a senior government official would require making adjustments and administer write-offs besides employment various kinds of borrowing to clean the slate in terms of debt and liabilities of loss-making.…Read More

New govt has host of options to bridge financing gap

The Express Tribune (Aug 20, 2018)

LAHORE: After a round of political somersaults, the new government is in place. It is hoped that the picture gets clear and the government will follow its path in due course. The new political dispensation has inherited an economy which is in a better shape. However, the growing real economy requires huge financial doses since exports are unable to cover imports. Multilateral institutions, economists and media experts are coming up with their estimates.…Read More

Improving economy, living standards main mission for govt: Asad Umar

The Pakistan Today (Aug 19, 2018)

ISLAMABAD: The nominated Finance Minister Asad Umer has said that improving the living standards of people and the economy is the main mission of Pakistan Tehreek-e-Insaf’s (PTI) democratically elected government. Talking to a news channel, he said it was a big challenge for the PTI government to ensure the provision of all basic amenities of life to the masses. “We will have to create job opportunities for unemployed youth, “ he ..…Read More

Circular debt of Rs1.1tr passed on to new govt

The Express Tribune (Aug 18, 2018)

ISLAMABAD: Though the previous Pakistan Muslim League-Nawaz (PML-N) government claimed to have brought about improvement in power production, it still passed on a gigantic circular debt of Rs1.148 trillion to the new government of Pakistan Tehreek-e-Insaf (PTI), which faces a bumpy road ahead. The PML-N had come up with a slogan in 2013 that it would bring load-shedding to an end during its five-year tenure. It solely focused on setting up thermal…..…Read More

Pakistan asked to make terror financing money laundering extraditable offences

The Express Tribune (Aug 18, 2018)

ISLAMABAD: The Asia Pacific Group (APG) on Money Laundering on Wednesday urged Pakistan to enact appropriate laws, enabling local officials to act upon requests of foreign countries to freeze illegal assets and making terrorism financing and money laundering extraditable offences. Pointing out deficiencies in Pakistan’s legal framework, the visiting APG team pointed out that this could hamper Pakistan’s effective response on requests. …Read More

Could Turkey’s financial crises have a snowball effect on world markets?

The Washington Post (Aug 17, 2018)

Investors might be watching the financial crisis in Turkey and wondering: How could it affect me? An economic virus spreading outward from Turkey and through other markets is unlikely, experts say, but it could happen. In one scenario, European banks that had lent money in the Turkish public and private sectors would face a credit squeeze if Turkey could not make its loan payments. The Turkish lira, its currency, would continue to drop in value against …Read More

Pakistan foreign debt and liabilities surged 14 percent in FY18, touch $95.097 billion

The Pakistan Today (Aug 16, 2018)

KARACHI: Pakistan’s foreign debt and liabilities surged 14 percent, touching $95.097 billion for FY18, data released by the State Bank of Pakistan (SBP) revealed. At end of FY17, the external debt and liabilities had been recorded at $83.431 billion, as the country faces problems to meet its external financing requirement, reported The News. During FY18, Pakistan paid off $7.479 billion in external debt servicing, falling 8.19 percent from FY17. In FY17, the foreign debt servicing in …Read More

Pakistan’s debt, liabilities swell 83% to Rs 30tr.

The Express Tribune (Aug 16, 2018)

ISLAMABAD: Pakistan’s debt and liabilities rose sharply to nearly Rs30 trillion or 87% of total size of the economy at the end of previous fiscal year, largely due to the last government’s expansionary fiscal policies and its failure to reform tax administration. Statistics released by the State Bank of Pakistan (SBP) on Wednesday showed that in the last five years, the country’s total debt and liabilities increased Rs13.5 trillion or 82.8% to stand at Rs29.9 trillion. …Read More

India’s July trade deficit widens to more than five year high of $ 18.2 billion: Trade ministry

The Hindustan Times (Aug 14, 2018)

India’s trade deficit widened to a more than five year high of $18.02 billion in July, the trade ministry said on Tuesday, driven largely by a surge in oil imports. Though merchandise exports rose 14.32 percent year-on-year in July, the trade deficit widened as oil imports surged 57.41 percent to $12.35 billion. In June, the trade deficit stood at $16.6 billion. Merchandise exports last month rose to $25.77 billion from a year ago, while imports rose 28.81 percent to …Read More

Why has the Turkish lira slumped to a record low?

The Independent (Aug 14, 2018)

The Turkish lira has slumped to a record low against the US dollar this week. On Friday it was down by as much as 17 per cent before recovering slightly. What’s driving it down? And what does it mean for Turkey and others? At one stage on Friday afternoon one dollar bought 6.9 lira. In January a dollar bought just 3.7 units of the Turkish currency. That means it has lost around 44 per cent of its value against the dollar this year. The lira is now the world’s worst …Read More

German economy accelerates in second quarter

The Wall Street Journal (Aug 14, 2018)

FRANKFURT—Germany’s economic growth accelerated in the second quarter, ensuring the eurozone as a whole avoided a slowdown, but economists said global trade tensions and a currency crisis in Turkey are clouding the outlook for businesses. Germany’s gross domestic product grew at a quarterly rate of 0.5%, or 1.8% in annualized terms, the Federal Statistical Office said Tuesday. It also raised its first-quarter growth estimate to an annualized 1.5%.. Read More

Italy PM, ministers discuss 2019 budget, agree it must cut debt

The Times of Malta (Aug 14, 2018)

Italian Prime Minister Giuseppe Conte and his top ministers discussed the 2019 budget on Monday and agreed that it would preserve the stability of state finances and lower the public debt, the prime minister’s office said. Conte assessed the economic situation and the budget with Economy Minister Giovanni Tria and the heads of the League and the 5-Star Movement, the two parties that make up the ruling coalition, the statement said. The budget, …Read More

India’s July trade deficit widens to more than five year high of $18.02 billion: Trade ministry

The Hindustan Times (Aug 14, 2018)

India’s trade deficit widened to a more than five year high of $18.02 billion in July, the trade ministry said on Tuesday, driven largely by a surge in oil imports. Though merchandise exports rose 14.32 percent year-on-year in July, the trade deficit widened as oil imports surged 57.41 percent to $12.35 billion. In June, the trade deficit stood at $16.6 billion. Merchandise exports last month rose to $25.77 billion from a year ago, while imports rose 28.81 percent to …Read More

Turkish financial crises sends fear through global financial markets from India to Hong Kong

The Independent (Aug 14, 2018)

Turkey’s descent into economic crisis roiled global financial markets on Monday. The lira slumped to as low as 7.19 to the dollar on Sunday, down from from 6.4 at the end of last week, when the US hit the country with a doubling of steel tariffs. On Monday morning the Turkish currency was still trading at only 6.84, more than 25 per cent lower than seven days earlier and around 45 per cent down since the start of the year. The country’s …Read More

PTI insist IMF is a ‘fallback’

The DAWN by Nasir Jamal (Aug 13, 2018)

ASAD Umar, the man expected to get the most important job of bringing the faltering economy back on its feet in the incoming Pakistan Tehreek-i-Insaf (PTI) government, views an International Monetary Fund (IMF) bailout as a “fallback option”. He does not rule out the possibility of knocking at the door of the lender for its dollars to prop up the depleting foreign currency reserves and avert the impending balance-of-payment crisis, …Read More

German industrial output declines in June

The Times of Malta (Aug 12, 2018)

German industrial production declined in June by slightly more than expected, led by a sharp drop in construction output. Total industrial output (which comprises output in manufacturing, energy and construction) fell by 0.9 per cent from May, according to the German economics ministry. Economists had expected a 0.4 per cent decline. However, compared with the same month last year, total production rose by a calendar-…….Read More

Agriculture sector will need Rs 1.52tr in FY19: SBP

The Express Tribune (Aug 12, 2018)

KARACHI: The State Bank of Pakistan (SBP) has estimated that the agriculture sector would require Rs1.52 trillion during the current fiscal year and has assigned banks to lend at least Rs1.25 trillion in FY19. “The overall disbursement target of Rs1,250 billion has been assigned to banks, which is 82% of the total estimated agri-credit requirement of Rs1,519 billion,” SBP said in a statement on Saturday. Banks must overcome their infrastructure.…Read More

Agriculture sector will need Rs 1.52tr in FY19: SBP

The Express Tribune (Aug 12, 2018)

KARACHI: The State Bank of Pakistan (SBP) has estimated that the agriculture sector would require Rs1.52 trillion during the current fiscal year and has assigned banks to lend at least Rs1.25 trillion in FY19. “The overall disbursement target of Rs1,250 billion has been assigned to banks, which is 82% of the total estimated agri-credit requirement of Rs1,519 billion,” SBP said in a statement on Saturday. Banks must overcome their infrastructure.…Read More

Remittances surge 25%, amount to $1.93b

The Express Tribune (Aug 11, 2018)

KARACHI: In a positive development, the remittances received from overseas Pakistanis rose markedly in July 2018, according to data released by the central bank on Friday. Remittances stood at $1.93 billion in the first month of fiscal year 2019, up 25.17% compared to $1.54 billion in the same month of previous year. The inflows were 21.03% higher than the money remitted in June 2018. Remittances touch seven-month high at $1.77 billion in March.…Read More

Forex reserves stand at $17b

The Nation (Aug 10, 2018)

KARACHI – Total liquid foreign reserves of the country stand at $17 billion, says State Bank of Pakistan (SBP). According to SBP’s weekly statement issued on Thursday, the foreign reserves held by the State Bank on August 03, amounted to $10,369.1 million. Whereas, the net foreign reserves with commercial banks were $ 6,635.9 million. During the week ending August 03, SBP’s reserves increased by $19million to $10,369 .….Read More

Overseas Pakistanis remit $1.93 billion in the first month of FY19

The News (Aug 10, 2018)

KARACHI: The Overseas Pakistani workers remitted $ 1929.76 million in the first month of FY19 as compared with US $ 1541.67 million received during the same period in the preceding year. A report issued by State Bank Pakistan (SBP) here Friday, said that during July 2018, the inflow of worker’s remittances amounted to $1929.76 million, which is 21.03 percent more than June 2018 and 25.17 percent more than July 2017.The country wise details for….Read More

Wheat worth $236.3 million exported in FY 2017-18

The Daily Times (Aug 09, 2018)

About 1.189 million metric tons of wheat worth $ 236.339 million were exported during 12 months of fiscal year 2017-18 as compared the exports of 3,937 metric tons valuing $ 1.038 million of corresponding period of lat year. During the period from July-June,2017-18, local export of wheat witnessed about 22,668.89 percent growth as compared the exports of the same period of last year, according the data of Pakistan .…Read More

Pakistan plans to borrow $4bn loan from IDB: Report

The News (Aug 09, 2018)

ISLAMABAD: Pakistan is planning to borrow over $4 billion from Islamic Development Bank (IDB) to bail out its economy, which is facing a balance-of-payments crisis. Financial Times reported that Saudi-backed IDB has agreed to make a formal offer to lend Pakistan the money after formation of new government. According to the report, Pakistan moves to restore its currency reserves when prime minister-in-waiting Imran Khan takes over.…Read More

‘GDP growth likely to decline if Pakistan leaves IMF programme’

The Daily Times (Aug 09, 2018)

KARACHI: Pakistan will possibly suffer if it leaves International Monetary Fund (IMF) programme given the multifarious economic difficulties to balance macro and micro situation on more than one count. Asad Umar, the next proposed finance minister of the country, had already indicated that it was inevitable to go for an IMF bailout package to around $15-$20 billion in order to support shambling economy on immediate basis. Also, interim Finance.…Read More

Japan’s economy revs up again after stalling

The Wall Street Journal (Aug 09, 2018)

TOKYO—Japan returned to solid growth in the April-June quarter, a trend economists said was likely to continue on the back of higher wages and consumer spending unless trade conflicts with the U.S. worsen. The world’s third-largest economy expanded at an annualized pace of 1.9% in the second quarter of 2018 after a revised 0.9% contraction in the first quarter, which ended the longest stretch of growth in 28 years..…Read More