Finance ministry warns of higher inflation

[blueazure]

Instead of talking BS, all you needed to do was to google

KARACHI: Pakistan has witnessed record foreign exchange spending on highest-ever arrival of new automobiles in 2020-21 on strong demand followed by revival of used vehicles imports

https://www.dawn.com/news/1651167

imported vehicle procedure has been made so difficult that it now practically impossible to import a vehicle now .

add exchange rate and hi duties as well

PS . i import cars as a side business

in 2017 .,nearly 4000 vehicles were being cleared a month, now its a trickle compared to that

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on the contrary , local assemblers have sold record units in 2020-2021 , esp INDU and naturally, they dont make everything locally so import bill indirectly went up and put pressure on PKR

Indus Motor posts 35% surge in earnings | The Express Tribune

Indus Motor Company reported a 34.9% increase in profit that reached Rs3.6 billion in the quarter ended March 31, 2021.

tribune.com.pk

So no Riasat-e-Medina then?

norwegian bhai knows the reality inside , kyu tang karte ho usse

 

[VCheng]

norwegian bhai knows the reality inside , kyu tang karte ho usse

Hum to khud aas lagaye bethay the, kyun mayoos kertay ho bhai?

On topic, higher inflation may be tolerable, but only if it is short-lived. Chronic high inflation will add to the economic stresses, specially if there is no viable plan to reduce it over the longer term.

 

[TNT]

Instead of talking BS, all you needed to do was to google

KARACHI: Pakistan has witnessed record foreign exchange spending on highest-ever arrival of new automobiles in 2020-21 on strong demand followed by revival of used vehicles imports

https://www.dawn.com/news/1651167

We have a moron of a PM that first auctioned govt vehicles and now buying new expensive ones. This moron used to shout and give mighty examples, now ppl are dying of hunger and this idiot is importing vehicles for bureaucrats and ministers.
The problem in Pakistan is the difference between rich and poor is alot. The super rich import and doznt care while the poor cant find a meal.

 

[El Sidd]

Crime and suicides are increasing exponentially as well.

The gated community dwellers will get imprisoned by the very gates they build to keep others out.

 

[Vapnope]

And you woke up now?View attachment 788566View attachment 788567

What is wrong with my statement?

 

[Patriot forever]

Hum to khud aas lagaye bethay the, kyun mayoos kertay ho bhai?

On topic, higher inflation may be tolerable, but only if it is short-lived. Chronic high inflation will add to the economic stresses, specially if there is no viable plan to reduce it over the longer term.

As a whole.
The problem is people need to realize that actual cost of the product needs to be passed down.
Country can not function on subsidies be it subsidising dollars, petrol or edible oil.

Automobile sales (mostly local assembled) cell phone sales ( that too local assembled) petrol sales, there is no effect on consumption.

The only way to progress is to increase exports and industriliaze. Controlling inflation by currency manipulation or subsidies will destroy this country as has happened in the recent past.

 

[Dr-who]

Why doesn't the govt take the initiative and build companies/industry similar to what they did with Ufone, and pvt it then?
What's stopping them

 

[POPEYE-Sailor]

No, it came to fix justice system in Pakistan, not to alleviate poverty.

wow they did great fix

 

[Patriot forever]

My brother, creation of export oriented industry is the responsibility of govt of Pakistan. 29% of Pakistani live below poverty line that essentially means that they don't have access to food grown inside Pakistan forget about anything imported.
And since you mentioned import, do you know that items that are produced in Pakistan if imported from outside are subject to heavy custom duties that sometimes is more than the cost of original item.
2 years back i procured something from abroad and the total taxes were 109% of the total price of the item. This in fact helps government not the user.

That is right, government implements policies and reforms. Over the last decade we have only eroded the export competitiveness by artificially manipulated currency, high ROI imported fuel power plants. Allowing cheaper imports.

To an ordinary person it seems like high duties helps the government not the people.
On one hand if there were no proportionate duties/restricrions imports will swell, CAD will increase, currency will fall, inflation will rise, interest rates go up, businesses slow down.
On the other hand your own local industrialization reverse in the face of cheap imports. Auto sector and smart phones are a great example, have progressed leaps in the last couple of years.

Policies need to be consistent in the face of adverse situations like the current commodity inflation cycle, in short I agree that export orientation is state responsibility but it comes at a cost especially for the poor in the short to medium term. The reason is entire system was self destructive and political, based on subsidies, artificial currency and highly regulated low msp setup on agriculture side.

At the end of the day one needs wealth creation and industrial competitiveness not an artificial low inflation subsidy and overvalued dollar setup at the cost of state.

This commodity inflation cycle will hurt a lot of people, the government needs to keep its act together and remain consistent in its policies. Otherwise any artificial means of dealing with it will only deteriote our economic standing in the long run.

 

[SecularNationalist]

Finance ministry warns of higher inflation
Khaleeq Kiani Published October 29, 2021 - Updated about 3 hours ago

In this file photo, Adviser to the Prime Minister on Finance and Revenue Shaukat Tarin addresses speaks to the media in Islamabad about rise in prices. — DawnNewsTV
ISLAMABAD: Recording fiscal deficit during the first two months of the current fiscal year unchanged at 0.9 per cent of GDP, the finance ministry on Thursday warned that the exchange rate, commodity supplies and seasonality could intensify the magnitude of prices and transportation costs in the country.
“The effect of these impulses — surge in international oil prices, exchange rate depreciation and adjustments in administered prices — may intensify the magnitude of prices and transportation cost,” Economic Adviser’s Wing of the Ministry of Finance stated in its monthly Economic Update & Outlook.
The ministry said the country had seen the revival of economic activities but an unprecedented increase in international commodity prices was putting pressure on domestic prices as well as on the local currency. The government’s pro-growth initiative along with efficient monitoring of prices is expected to provide relief to the general public.
The ministry explained that the country’s inflation rate was mainly driven by monetary and supply side factors, including domestic and international commodity prices, dollar exchange rate, seasonal factors and economic agents’ expectations concerning the future developments of these indicators.

Since May this year, year-on-year inflation has observed a downward trend till September but has seen recent surge in international oil prices, exchange rate depreciation and adjustments in administered prices.
The ministry said the government’s efforts to ensure smooth supply of essential commodities to domestic food markets to protect the livelihood of people could be helpful, and if there would be no additional impulses in October, then year-on-year inflation might decelerate.
All in all, the central forecast for October and beyond shows resumption of downward trend in year-on-year inflation, but within a broad uncertainty range. “The inflation rate in October is expected to settle below the level observed in September, but the probability range is wide,” it said.
The ministry’s report said preliminary production estimates of major Kharif crops for 2021 were encouraging as reviewed at a recent meeting of the Federal Committee on Agriculture. The inputs availability will remain satisfactory as more certified seeds for wheat and other crops will be ensured for the upcoming Rabi 2021-22 season and hence it is expected that in the absence of any adverse climate shock, the agriculture sector will surpass its target of 3.5pc.
Industrial activity measured by the large-scale manufacturing (LSM) index was most exposed to external conditions. The LSM cycle is following the cyclical recovery in the main trading partners, but since it is focused on the main industrial sectors and not on total GDP, it is somewhat more volatile than the cyclical component of GDP in Pakistan’s main export markets.
The report said the government had absorbed the pressure of increasing international rates and provided “maximum relief” to consumers by keeping petroleum levy and sales tax to a minimum level and would provide targeted subsidies on wheat, sugar and pulses to 40pc of the population for which the government had compiled a database to identify the targeted population.
According to the report, fiscal deficit in July-August FY22 was recorded at 0.9pc of GDP, the same as in the comparable period last year. In absolute terms, it stood at Rs462 billion against Rs415bn in July-August FY21. During the first two months of FY22, the primary balance showed a deficit of Rs37bn, compared to a surplus of Rs69bn in the comparable period last year.
Net revenue receipts increased by 7.1pc to Rs470bn in July-August FY22 compared to Rs439bn last year. A rise in FBR tax collection during the period contributed significantly to the increase in revenue receipts. The PSDP (Public Sector Development Programme) spending jumped by 18.9pc to Rs63bn in the first two months of the current fiscal year compared to Rs53bn during the same period last year.
Published in Dawn, October 29th, 2021

Finance ministry warns of higher inflation

Says effect of international oil price hike, exchange rate depreciation may intensify magnitude of prices, transportation cost.

www.dawn.com