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IMF package only way to put economy back on track: Asad Umar

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Economic situation to be cleared

ISLAMABAD: Minister for Finance Asad Umar on Saturday said an IMF bailout package was unavoidable for Pakistan, which, according to economic experts, was the only way to put the national economy back on track.
Talking to PTV, the minister said the government had to take the decision to approach the International Monetary Fund (IMF) because of the high current account deficit as a result of the wrong economic policies adopted by the past government.
Referring to his meetings with the IMF officials in Indonesia, he said both the sides had expressed the desire that it might be the last bailout package for Pakistan.
He said,“We have sought the package only to get relief for the time being and run the country’s economic system smoothly.” Meanwhile, the government had planned to improve its capacity by gradually reducing the trade deficit, increasing exports, increasing foreign remittances, improving tax revenues, and introducing other revenue generation measures to avoid the IMF packages in future, he added.
The minister said the Pakistan Tehreek-e-Insaf (PTI) government had reduced the burden on common man, while the last PML-N government had levied increased taxes on those items, which were necessary for common man. The present also imposed heavy taxes on luxury cars and expensive mobile phones, he added.
He said $12 billion was required to beef up foreign exchange reserves, which was essential for the country’s economic stability. However, the government would bring reforms to the economic system, he added.
Asad Umar said in the Ministry of Finance decisions were not being made on a political basis.
Replying to a question, he said after consultations with the friendly countries, the government had decided to approach the IMF. Negotiations were also underway with Saudi Arabia and China, he added.
He said the government was taking concrete measures to facilitate the industrial sector, including the provision of cheap gas and electricity so that exports could be boosted.
The government, he said, had announced Apna Ghar Scheme to provide shelter to the shelterless and the private investors would also be engaged.
Replying to another question, the minister said the US should better worry about repayment of its own loans which it had obtained from China.
He said the PTI government would introduce a strong regulatory system in the country and legislation if required would be undertaken.
The minister said the PTI government would not take any step contrary to the party’s manifesto. Measures were being taken to get back the stolen national wealth stashed abroad and for the purpose, national institutions were being strengthened, he added.
He said National Electricity Power Regulatory Authority (NEPRA) had recommended Rs 3.79 per unit increase in the electricity tariff.

 

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Business

Stocks turn down as outlook darkens, confidence down

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Asian markets extend losses on fears of escalating trade war

LONDON: US stocks followed European stocks down Wednesday on stubborn worries over global trade and high oil prices, while an EU offers to extend Britain’s Brexit transition period could not keep London in positive territory.
That offer and lower British inflation had briefly helped the FTSE 100 index higher but the index closed just in the red, while Frankfurt and Paris suffered larger falls despite earlier Asian gains.
On Wall Street, the Dow had shed 0.3 percent more than two hours into trading. Barclays chief European economist Antonio Garcia Pascual said two key factors were casting a shadow over the wider outlook: the potential prospect of $100 oil and the festering global trade war.
Capital Economics warned of an impending slowing of the US economy as monetary policy tightens. “We are not explicitly forecasting a recession, but we believe that the economy will slow sharply in 2019 as prior monetary tightening bites and fiscal stimulus fades,” the consultancy said.
Oil fell Wednesday after data showed a drop in US stockpiles – but dealers kept a close eye on Riyadh, with major producer Saudi Arabia under intense pressure over the disappearance of journalist Jamal Khashoggi.
Traders are on tenterhooks over any fallout because OPEC kingpin Saudi Arabia is the world’s biggest oil exporter.
Investors fear oil could shoot back above $100 per barrel on Saudi tensions — and also on sliding output from Iran which faces renewed US sanctions next month.
“This is a big issue for Europe in general because Europe is highly oil-dependent,” Pascual told the Media. “A big supply shock could be something that Europe would not cope very well with.”
Meanwhile, this year US President Donald Trump has levied or threatened tariffs on goods from economies around the world, notably China, but also on traditional allies including the European Union.
“I’m very worried about trade,” said Pascual, noting Trump’s threat of a 25-percent tariff on European car imports.
“We have US-China trade war – but we also have the prospect of a US-EU trade war.”
– ‘Worst case scenario’ –
Barclays estimates that a scenario of $100 oil could slash 0.6 percentage points from its current 2019 global economic growth guidance of 3.8 percent.
The bank also estimates that its “worst-case scenario” of $100 oil and a US-EU trade war could slash 2019 eurozone economic growth by 1.0 percentage points from its current forecast of 1.9 percent.
European economies are already being buffeted by concerns surrounding Brexit as well as Italy’s fiscal troubles.
New York – Dow Jones: DOWN 0.3 percent at 25,722.43
London – FTSE 100: DOWN 0.1 percent at 7,059.40 points (close)
Frankfurt – DAX 30: DOWN 0.5 percent at 11,724.09 (close)
Paris – CAC 40: DOWN 0.5 percent at 5,144.95 (close)
EURO STOXX 50: DOWN 0.4 percent at 3,243.08
Tokyo – Nikkei 225: UP 1.3 percent at 22,841.12 (close)
Shanghai – Composite: UP 0.6 percent at 2,561.61 (close)
Hong Kong – Hang Seng: Closed for a public holiday
Euro/dollar: DOWN at $1.1540 from $1.1574
Pound/dollar: DOWN at $1.3132 from $1.3181
Dollar/yen: DOWN at 112.14 from 112.25 yen
Oil – Brent Crude: DOWN $1.55 at $79.66 per barrel
Oil – West Texas Intermediate: DOWN $2.00 at $69.92

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Economy

Govt sets target of 15m bales of cotton

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ISLAMABAD: Adviser to Prime Minister on Commerce and Textiles, Abdul Razzaq Dawood Wednesday said the government had set a target of 15 million bales of cotton for 2018 -19 as compared to current 10.8 million bales production.
The government’s priority was to ensure the import of quality cotton and provide quality seeds and pesticides to the farmers for increasing their per acre yield, he said while addressing a press conference here at the Ministry of Commerce and Textile.
“We are starting a campaign for ‘Contamination free cotton’ to improve the quality of local cotton and to evolve export quality cotton in order to increase revenue through exports,” he said.
The minister said textile was an important sector which contributed 60% of the country’s exports, now the trade of textiles had declined.
He said low-quality seeds, pesticide and lack of modern technology in textiles were the main causes of the decline in this sector and low production of cotton in the country.
He said an upcoming visit to China, “We would get support in agriculture research, including Basmati rice and fruits.”
He said, “We want to get market excess from China, European Union, America, Japan, and other southeast and Pacific countries for increasing exports of the country.
“China is ready to give us duty-free excess in its market through the Free Trade Agreement in Phase-II, now China is agreed to lower the tariff on 70 items to give the market excess to Pakistan.”
“We would negotiate with Japan and Canada to get market duty free excess for increasing our exports, “he said.
In regional trade, “We are losing our trade share as compare to Vietnam, Bangladesh, and India .”
He said soon the government would negotiate with all stakeholders to give a five-year plan for the textile industry to evolve long, medium and short term.
He said, “We are negotiating with All Pakistan Textiles Mills Association for giving a better price to farmers, but they are not ready to pay a good price to the cotton farmers. The government wants to introduce the trading culture and stop the under-invoicing to harm the country’s trade and economy.”
Replying to another question, he said the government had decided to revive the Engineering Development Board (EDB) to concentrate on engineering products for increasing exports in this sector.
“We have planned to evolve a new roadmap for the promotion of engineering industry,” he said adding that it was the top priority of the government to increase engineering exports including exports of auto parts, motorcycles, air conditioners, and other products.
The government, he said, would give priority for the promotion of export-led growth and reduce dependence on imports. “We have identified several sectors to boost country’s exports,” he said.
“Primarily, we are focusing on increasing exports in engineering and Information Technology and innovated technology by enhancing their competitiveness in the global market. We would achieve exports target and additional exports for economic development and prosperity,” he said.
To a question, the adviser said the government was committed to enhancing exports and increasing manufacturing in the engineering sector.
“We would focus on promoting “made in Pakistan” goods and discourage imports,” he remarked.
He said the quality of governance was declining in every government sector, which needed to be improved for ensuring the development in the country.

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Business

Govt committed to reduce cost of doing business

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ISLAMABAD: Prime Minister Imran Khan on Wednesday said that the government was firmly committed to reducing the cost of doing business.

He said that would contribute towards country’s ranking in the ease of doing business by extending maximum facilitation and provision of all possible support to the business community.

The prime minister was chairing a meeting of the Council of Business Council here at Prime Minister’s Office. The prime minister said that in order to strengthen the local industry and reduce the cost of production, gas prices had been reduced for export-oriented industries so as to make Pakistani products internationally competitive. He said that the government was also considering a reduction in various duties including customs duty, regulatory duties and others to further reduce business cost.

He said that the government was also working on developing a national tariff policy to address issues of the business community and to remove anomalies in the existing tariff structure. On improving country’s ranking in ease of doing business in the country, the prime minister said that the government had set the target of bringing the country into the list of first 100 countries by extending maximum facilitation and simplification of the procedures.

The prime minister said that a special Complaint and Suggestion Cell was being established at Board of Investment to facilitate redressal of the complaints of the business community and welcome their suggestions with regards to business policies. He said that the Complaint and Suggestion Cell, which would be connected to the Prime Minister’s Office would be functional in a week’s time. The prime minister also appreciated the input of the business leaders belonging to various sectors of the economy, who presented various proposals during the meeting for the strengthening of the economy and promoting critical sectors such as manufacturing sector, small and medium enterprises, agriculture and IT sector. 

Those who attended the meeting included, among others, Muhammad Ali Tabba, Bashir Ali Muhammad, Shahid Sooty, Seema Aziz,  Azam Farooque, Shahid Abdullah, Khawar Anwar Khawaja, Babar Badar, Saqib Shirazi, Samina Rizwan,  Almas Haider,  Abdul Rauf, and Zarak Khan. Minister for Finance  Asad Umar, Advisor on Commerce  Abdul Razzak Dawood and senior officers were also present during the meeting.

 

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