Pakistan Economy - News & Updates - Archive

[Neo]

220MW power plant in Korangi by next year

ISLAMABAD (April 26 2007): Karachi Electric Supply Corporation (KESC) spokesman Syed Sultan Hassan on Wednesday said that KESC had started work on 220MW power plant project in Korangi, which would be completed next year. Talking to PTV, he said it was expected that it would produce 50MW electricity in August.

Besides this, KESC had planned to establish Lower Power plants for the production of electricity, he added. He said the KESC was making efforts to fill the gap between demand and supply of electricity of the city.

Sultan Hassan said KESC provided 50 percent of the total electricity used in Karachi and rest of 50 percent was obtained from other sources like IPP and Wapda. A broad outline had given to the people from the day one when load shedding was started after April 2, he added.

He said the major reason for shortage of electricity was phenomenal growth of economy, increased use of air-conditioners and electric appliances, demand of tube wells and aggressive village electrification.

http://www.brecorder.com/index.php?id=556111&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Thursday, April 26, 2007

2,500 tonnes of Pakistani wheat reaches India

NEW DELHI: About 2,500 tonnes of wheat from Pakistan reached Indian shores on Wednesday and the consignments have been sent for quality tests, flour millers said.

“We look forward to import more from Pakistan as rising rupee has made imports from Pakistan attractive,” S. Pramod Kumar of Roller Flour Millers Federation of India, said. The Indian rupee strengthened past 41 per dollar for the first time in nine years on Wednesday, buoyed by robust capital inflows and as exporters hedged against further appreciation.

The wheat, which arrived at the southern Indian port of Tuticorin, was bought at $232 a tonne on cost and freight basis, Kumar said.

Indian grain traders have contracted to import 20,000 tonnes of Pakistani wheat, Vijay Iyengar, managing director of Agrocorp International Pte. Ltd, had told Reuters earlier this month.

There is a possibility of up to 150,000 tonnes of Pakistani wheat coming to India, he said.

http://www.dailytimes.com.pk/default.asp?page=2007\04\26\story_26-4-2007_pg5_6

 

[Neo]

Thursday, April 26, 2007

Per capita income will cross $1,000 next year, says PM

ISLAMABAD: Prime Minister Shaukat Aziz said on Wednesday that Pakistan’s per capita income was $847 last year, is expected to be around $950 this year and will surpass $1,000 next year. Speaking at the inaugural session of the Pakistan Development Forum 2007 he said the number of people below the poverty line had decreased from 34.5 percent in 2001 to 23.9 percent in 2005 – in urban areas from 22.7 percent to 14.9 percent and in rural areas from 39.3 percent to 28.1 percent.

In absolute terms, 13 million people have been lifted out of poverty, out of which 10.5 million belong to rural areas, the PM said. “Market surveys indicate a significant increase in the sale of consumer goods in rural areas, which has a direct bearing on the quality of life for the people,” said Aziz. Pakistan has become the fastest growing mobile phone market after China, he said.

Similarly motorbike sales are registering record levels in rural areas, he said. Aziz said that in order to meet the shortage of skilled manpower in Pakistan’s rapidly growing economy, the government is implementing a comprehensive programme of technical and vocational education aimed at maximum utilisation of existing facilities as well as creating new ones.

The National Vocational and Technical Education Commission has been set up as an apex body at the national level, he said. At present 350,000 students per year are being imparted various skills and it is expected that 1,000,000 students will be studying at the institute per year by 2010. Pakistan has made significant strides in the last seven years in higher education, the PM said. “The thrust of our strategy is to improve the quality sof, and access to higher education, particularly science and technology, which directly contribute to economic development.” Nine new universities are being established in collaboration with renowned world institutions, he added.

The PM said one of the biggest challenges facing mankind today is to build a world where the goals of environmental conservation and economic development do not conflict with each other. “Population growth, increasing urbanisation, global warming, and natural disasters pose grave threats to environmental sustainability,” he said.

http://www.dailytimes.com.pk/default.asp?page=2007\04\26\story_26-4-2007_pg7_36

 

[Neo]

Thursday, April 26, 2007

Additional 250MW of power generation starts

ISLAMABAD: The Indus River System Authority (IRSA) has agreed to release more water from Tarbela and Mangla dams for generating an additional 250 megawatts (MW) of electricity from Wednesday. This would reduce the existing electricity shortage from 600MW to 350MW.

This was decided in a meeting between Water and Power Minister Liaquat Ali Jatoi and the IRSA chairman and members on Wednesday. The meeting assessed the possibility of release of additional water from Tarbela and Mangla dams for additional power generation in view of the forced outage of a number of plants of the Water and Power Development Authority (WAPDA) at Guddu, Jamshoro and Tarbela. The IRSA officials agreed to start instant provision of additional water for power generation.

The IRSA chairman told the meeting that currently the total available water was 5.12 million acre feet (MAF), which was six times more than the previous year. He said that the water level at Tarbela and Mangla was 17 feet and 13 feet above the maximum estimated levels and inflows at both dams were good.

http://www.dailytimes.com.pk/default.asp?page=2007\04\26\story_26-4-2007_pg7_22

 

[Neo]

ADB Sees Pakistan Economy Growing in '07
Thursday April 26, 2007
By Stephen Graham, Associated Press Writer
Asian Development Bank Official Says Pakistan Economy Will Grow by More Than 7 Percent in 2007


ISLAMABAD, Pakistan (AP) -- Pakistan's economy will grow by more than 7 percent this year, a senior Asian Development Bank official said Thursday, urging the government to invest in education and health to sustain that rate.

Private consumption and investment is powering a boom in Pakistan, despite concerns about the threat of Islamic militancy and the country's slow transition from military rule to democracy.

Liqun Jin, vice president of the ADB, a major donor to Pakistan, said government investment in infrastructure such as roads, water and power projects were laying the groundwork for future prosperity.

After 6.6 percent growth in 2006, "this year, I think they shouldn't have any difficulty achieving 7" percent, Jin told The Associated Press in an interview on the margins of a development conference.

Jin said he was optimistic about Pakistan's commitment to economic reforms, which have included privatization and a tax shake-up.

However, he urged officials to do more to foster research and help Pakistani companies develop higher-value export products and create jobs for Pakistan's youthful and fast-growing population of about 160 million people.

"The young population could be positive, powerful, productive forces if investment in education, in health will be there," Jin said. "Or, if not handled well, (there) could be a big challenge for an economy if there are not sufficient job opportunities."

President Gen. Pervez Musharraf has announced plans to build five new dams in order to capture more water for Pakistan's irrigation-dependent agriculture and to supply galloping demand for power from both industrial and private users.

Jin said the bank was open to requests for funding for the dams.

He said bank officials had already had "some discussions" about the proposed Bhasha Dam across the Indus River, high in the mountains near divided Kashmir.

However, he cautioned that the bank would set tough conditions, for instance on environmental impact and resettling local residents.

"We want to make sure, if we do finance a project of that kind, it should be done on a sound basis," he said.

http://biz.yahoo.com/ap/070426/pakistan_economy.html?.v=1

 

[Neo]

Portfolio investment at its new high

KARACHI (April 27 2007): The balances placed under Special Convertible Rupee Accounts (SCRAs) representing portfolio investment in Pakistan, which stood at $649.9 million on March 22 have surged by $50.473 million to touch the record high of $700.4 million on April 23, 2007.

Earlier, on April 9, the cumulative net flow stood at $575 million, showing a net disinvestment of $74.9 million compared with the level achieved on March 22. Between March 22 and April 9, the position showed generally a downward trend, showing at one time a disinvestment of about $100 million compared with the earlier record of $673 million. The decline was in line with the developments in the stock market.

Subsequently, on April 20, the portfolio investment posted a gain of $102.4 million to touch a volume level of $677.4 million. The ongoing surge continued, as the cumulative net flow reached another landmark on April 23 showing a net investment of $23 million in just three days to reach the new high of $700.4 million. Total fresh investment since March 22 has been estimated around $125.3 million.

Overall, by April 23, the largest investor during FY07 so far was USA ($480 million) followed by UK ($162 million), Netherlands ($44 million), Malaysia ($33 million), Hong Kong ($23 million) Kuwait ($15 million) and Germany ($7 million) respectively.

Among the major disinvestors during April so far were Singapore ($61 million) and Hong Kong ($8.7 million). It may be recalled that the largest disinvestor during April had been the largest investor during the initial months of FY07. The largest disinvestor during the year, however, was Switzerland withdrawing $60 million. Other major disinvestors included Austria ($6 million), France ($2 million), B V Island ($1.7 million) and Luxembourg ($1 million) respectively.

http://www.brecorder.com/index.php?id=556368&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Pakistan and Iran set to achieve $1 billion trade target

KARACHI (April 27 2007): Pakistan and Iran will achieve the target of bilateral trade of one billion dollars by the end of 2007 or in first quarter of 2008. This was revealed in a meeting between Pakistan-Iran Business Council Chairman Tariq Sayeed and Commercial Attaché of Iran in Karachi Ahmad Fasihi.

Tariq Sayeed said that the present volume of bilateral trade between the two countries ie 638 million dollars, was not the true reflection of their brotherly relations.

To achieve the set target of bilateral trade, Tariq Sayeed suggested that Pakistan and Iran should encourage border trade by establishing customs ports at borders. He further suggested that Pakistan and Iran should also establish banks in each other's countries to facilitate opening of letter of credits (LCs).

http://www.brecorder.com/index.php?id=556390&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

April 27, 2007
Investment to GDP ratio may rise to 22.8pc: Target for five years
By Khaleeq Kiani

ISLAMABAD, April 26: The government targets national economy to grow at a sustainable level of 7.5 per cent in five years and limit inflation at five per cent, supported by an increase in investment-to-GDP ratio to 22.8 per cent.

Minister of state for finance Omar Ayyub Khan presented a draft summary of the poverty reduction strategy paper (PRSP-II) to the participants of the Pakistan Development Forum that included foreign diplomatic corps based in Islamabad and multilaterals, like the World Bank and the Asian Development Bank.

The PRSP-II would be finalised in July after incorporating input form development partners.

The future economic policy would revolve round this document that has focus on unleashing demographic dividend through skill development and knowledge-based economy.

The draft PRSP-II forecasts that the inflationary pressure will be 6.5 per cent during 2006-07, 5.5 per cent in 2007-08 and will remain five per cent in the coming years till 2010-11.

“Challenges are several, but there are opportunities as well,’’ he said and added that the proposed growth would be driven by agriculture, services, infrastructure, manufacturing and development of big cities.

“This will lead to elimination of core poverty by 2015, which is defined as people with less than $1 a day earnings.”

He said Pakistan has made a remarkable progress in its economic performance, undertaken wide-ranging structural reforms, achieved both macroeconomic stability and strong growth and sharply reduced poverty but the government was cognizant of the fact that there was no room for complacency.

“The government estimates the economy will grow by seven per cent this year, compared with 6.6 per cent of the last year. The spending on poor would be increased from 5.6 per cent now to 6.2 per cent of the GDP by 2009.

“The population living in poverty reduced to 24 per cent in 2005 from 34 per cent in 2001, helped by an average seven per cent growth in the past four years,” he said.

Agriculture sector has been targeted to grow an annual 4.5 per cent for the next five years under the PRSP-II. The government will build road, rail and airports to link the country's ports with industrial cities, reducing transportation cost and time as part of infrastructure development, says the PRSP.

Mr Ayyub said the ratio of investment to GDP was expected to rise to 22.8 per cent by 2011 and per capita income is estimated at $1,253 in four years, from current 20 per cent and $847 respectively. The budget deficit has also been forecast to be reduced to 3.3 per cent from current 4.2 per cent.

Pakistan’s tax revenue is expected to grow up to Rs1.065 trillion in 2007-08, Rs1.255 trillion in 2008-09, Rs1.469 trillion in 2009-2010, and 1.722 trillion in 2010-11.

There will be a total expenditure of Rs2.601 trillion by 2010-11 against total revenues of Rs2.125 trillion.

The development expenditure will be jacked up to Rs479.5 billion in 2007-08, Rs556.8 billion in 2008-09, Rs655.2 billion in 2009-10 and Rs770.9 billion in 2010-11. The government will increase spending on the poor to 6.2 per cent of the GDP by 2009 from the current 5.6 per cent, it said.

The diplomatic representative of Norway in her presentation asked Pakistan to get ownership of National Assembly and provincial assemblies on this crucial PRSP-II document.

She also said that the consultative process held in preparation of PRSP did not reflect in the presented draft report. Advisor to Prime Minister on Finance Dr Salman Shah said that inequalities increased in Pakistan with the higher growth rate, but it was less than China and many other countries.

He said the increase in per capita income also posed certain challenges to Pakistan.

Mr Asim Baksh from Karim Baksh Ltd in his presentation said the prime minister has talked about per capita income touching $1000 but that meant the people will come out with money in their hands, but they would not find out space to buy things.

http://www.dawn.com/2007/04/27/ebr1.htm

 

[Neo]

Friday, April 27, 2007

Economic growth, poverty reduction:

Input sought from donor community to improve policies

By Sajid Chaudhry

ISLAMABAD: The government of Pakistan has sought input from the donor community for improvement in the policies being developed for higher economic growth and reduction in poverty.

Omer Ayub Khan, Minister of State on Finance and Revenue stated this on the second day of the Pakistan Development Forum (PDF) 2007. He said Competitive Support Fund is initiating a study on Special Economic Zones (SEZs), objective in this study is to cover these issues utilising recently completed benchmarking studies of SEZs from countries with similar conditions and then relating the findings to Pakistan’s current and future strategy.

On draft PRSP II outlined its objectives and said that input by the donor community would help government of Pakistan to improve it further. Altaf Saleem said that some 20 years old curriculum of the training institutes in the country can not meet the present day needs. He said revamping of curriculum would help achieving knowledge based economy and workforce.

Razi-ur-Rehman, Chairman Securities and Exchange Commission of Pakistan (SECP) informed the participants of the PDF 2007 reforms carried out by the regulator to improve the monitoring stock market and enforcement of laws for its development. He informed that to facilitate transparent and efficient financing for stock market, the SECP has proposed authorisation of direct leverage finance in the form of CFS Mk II by eligible brokers, banks and non-banking financial institutions. To provide level playing field for the Lahore and Islamabad stock markets the Centralised CFS Mk II would be developed at the National Clearing Company Pakistan Limited.

He said to introduce much needed avenues of leverage financing in the market derivative products are being developed which include cash settlement future contracts, index futures, options on individual securities. SECP has proposed to the stock exchanges the establishment of trading floors in Peshawar and Quetta. A new NBFC law is being developed, as the ordinance does not appropriately cater for the regulatory needs of the NBFC sector. He said stamp duty on transfer of shares is being deferred for two years. He also disclosed that new computerised system is being installed for monitoring of stock markets, which would be installed in next three to four weeks. Some 200 professionals are being inducted in SECP for proper implementation and enforcement and monitoring of sectors being governed by the regulator.

Dr Salman Shah, Advisor to Prime Minister on Finance and Revenues while chairing the session on ‘financial deepening and development reforms and governance’ informed the participants that government’s role in remaining banks would also be reduced. He said National Bank of Pakistan’s shares are already with the public and now the government is planning for its GDR and provincial banks would also undergo GDR process through which the ownership of the banks would be shared with private sector.

In his presentation, representative from State Bank of Pakistan informed the donor community that road map developed for the regulator’s activities during next five years also include a set of reforms. While outlining the road map, he informed that it include increasing outreach of micro finance banks for low income groups, development of payment systems, financial diversification to cater to variety of consumers and their needs, introduction to universal banking based on new set of opportunities and challenges, entering into emerging regional markets.

http://www.dailytimes.com.pk/default.asp?page=2007\04\27\story_27-4-2007_pg5_1

 

[Neo]

Friday, April 27, 2007

US firm plans to invest $500m in power generation

ISLAMABAD: MG Power Systems, USA, has planned to set up 750 MW Power Generation Units in Pakistan by investing US $ 500 million.

This was stated by the visiting delegation of the company, which led by President of MG Power Systems, USA, W. Glenn Jackson called on the Minister of State for Petroleum and Natural Resources Mir Muhammad Naseer Mengal here on Thursday.

They discussed investment potential in oil and gas sector of the country. W. Glenn said his company had a vast expertise in the power generation and both the countries would benefit to learn a lot from each other’s experience in the field of energy.

The minister said the government was focusing on the promotion of energy sector on modern lines to meet the growing energy needs for sustaining the GDP growth rate of above 7 percent per annum. He said the country was endowed with huge coal deposit of 185 billion tons and the government was taking concrete steps to produce 20,000 mega watt coal based power by 2016.

He said the government had deregulated the petroleum sector and provided the investors a level playing field in a competitive and business friendly environment.

The minister said the government was also making concerted efforts to exploit the untapped hydrocarbon deposits and considering to import gas and LNG from the neighbouring countries to bridge the supply demand energy gap. Secretary Petroleum Ahmed Waqar, Joint Secretary Moosa Raza Effendi,

Director General (Oil) G.A. Sabri, Director General (Gas) Saeed Ullah Shah were also present in the meeting.

http://www.dailytimes.com.pk/default.asp?page=2007\04\27\story_27-4-2007_pg5_3

 

[Neo]

Pakistan has 55.62 million mobile subscribers
Friday 27 April 2007

The Pakistan Telecommunication Authority (PTA) has recorded a total of 55.62 million mobile subscribers in Pakistan as on 31 March 2007. Comparatively, the number of mobile subscribers totalled 52.88 million in February 2007. Mobilink had the highest number of subscribers with 24.65 million subscribers, followed by Ufone with 11.60 million subscribers, Telenor with 9.07 million subscribers, Warid with 8.96 million subscribers, Paktel with 1.03 million subscribers and Instsphone with 0.31 million subscribers. The mobile density was 35.79 in March 2007 compared to 34.03 in February 2007.

http://www.telecompaper.com/news/article.aspx?id=166157&nr=&type=&yr=

 

[Neo]

India's trade with Pakistan tipped to touch 1.5 billion dollars

New Delhi, Apr 27: Trade between India and Pakistan has shown enormous buoyancy and is expected to cross 1.5 billion dollars in 2006-07.

Exports to Pakistan in April-December (2006-07) stood at 980.33 million dollars while imports were US $ 247.48 million during the same period.

A business delegation led by Muhammad Nasir Khan, President of Islamabad Chamber of Commerce & Industry, called on Kamal Nath, Union Minister of Commerce & Industry, here this evening and expressed hope that the economic ties between the two countries would strengthen in the near future to benefit both countries, according to an official statement.

Kamal Nath highlighted the many benefits that could accrue to both India and Pakistan if trade relations improve, as it would make both countries more competitive in an increasingly globalised economy. He expressed hope that Pakistan would grant the much awaited most favoured nation status (MFN) to India and said that the segment of trade between two nations that currently took place through third countries would then be replaced by direct trade.

The Pakistan delegation requested the Minister to ensure easing of visa regime for Pakistani businessmen by the Indian government.

Kamal Nath assured that Government of India was committed to strengthening economic ties with its neighbour and this issue would also be taken care of in due course.

The main commodities of exports to Pakistan include sugar, dyes, plastic & petroleum products and cotton while main import items from Pakistan are petroleum & crude products, fruits & nuts (excluding cashew nuts), cotton yarn & fabrics and organic chemicals.

http://www.newkerala.com/news.php?action=fullnews&id=23139

 

[Introvert]

Pakistan sells 45,000 tons wheat to Yemen​

ISLAM ABAD, April 29 (Saba)- A global trading firm has sold 45,000 metric tons Pakistan-origin wheat to a buyer in Yemen at around $240/ton, cost and freight, a senior company executive said.

"One of the shipments has already reached Yemen while another is on its way," the official said, requesting anonymity for herself and her company.

http://www.sabanews.net/view.php?scope=f9129&dr=&ir=&id=130344

 

[Neo]

Asian Bank sees growth lower than seven percent target

ISLAMABAD (April 28 2007): Pakistan's economy in 2006-07 is projected to grow by 6.8 percent, less than government target of 7 percent, as the agriculture sector is expected to grow by 4.0 percent, services by 7 percent and manufacturing sector by 8.6 percent, according to Asian Development Bank (ADB) on Friday.

The Bank in its 'Economic Update' said that Pakistan's economy maintained strong growth in the first half of 2006-07, catalysed by improved performance of commodity producing sector and robust growth in the services sector. However, some macroeconomic fundamentals remained strained. On the back of a tight monetary policy, inflation declined but still remained high. The current account deficit rose further on account of weak export performance and the government maintained an expansionary fiscal policy.

However, the ADB warned that slowing exports, growing current account deficit, continuing high inflation, and the emerging power shortage were potential risks to the country's medium-term economic prospects. The end of the China-specific safeguards imposed on Chinese exports by the USA and EU in 2008 may further weaken Pakistan's trade balance. The current expansionary fiscal policy, if continued, may weaken the budgetary position, said the Bank.

DOMESTIC SECTOR

GROWTH: In the first half of 2006-07, agriculture and manufacturing picked up and expanded at a faster pace than in the same period of 2005-06. Sugarcane production, one of the four major crops, is estimated to be significantly higher than last year. The cotton crop, estimated at 12.5 million bales, is also marginally higher. The quantum index of large scale manufacturing sector showed a higher increase (9.7 percent) in the first quarter of 2006-07 than the increase (8.7 percent) recorded in the same period of 2005-06. The services sector also continued to expand in the first half of 2006-07, with the telecom and financial services maintaining strong growth.

PRICES AND MONETARY POLICY: Inflation declined, but was still high at 7.6 percent in the first eight months of 2006-07. In view of persistent high inflation, the State Bank of Pakistan (SBP) further tightened monetary policy in July 2006. Among other measures, the discount rate was raised from 9.0 to 9.5 percent. The private sector demand for credit declined to Rs 241.6 billion in the first eight-and-a-half months of 2006-07 from Rs 330.5 billion in the same period of 2005-06. However, the overall monetary growth in the first eight-and-a-half months of 2006-07 was higher than last year.

FISCAL POLICY: The government continued to pursue an expansionary fiscal policy, and the fiscal deficit in the first half of 2006-07 remained more or less at the same level as in the first half of 2005-06. Both expenditure and revenue increased by 23.5 percent. Tax revenue, collected by the Central Board of Revenue, increased by 27.0 percent, with a particularly sharp increase in direct taxes. The ratio of tax receipts to GDP increased from 4.4 percent to 4.9 percent.

EXTERNAL SECTOR

MERCHANDISE TRADE: Growth of both exports and imports decelerated further in the first eight months of 2006-07. Export growth declined to only 3.9 percent and import growth to 9.9 percent from 20.2 percent and 46.9 percent, respectively, in the first eight months of last year. The sharp slowdown in exports was due to decline in volume. The decline in import growth was attributable to lower international oil prices and substantial slowdown of domestic demand for consumer durables due to rising interest rates. Import of motor vehicles declined by 9.2 percent.

CURRENT ACCOUNT: The current account deficit increased by 43.3 percent to $5.8 billion in the first eight months of 2006-07. With import growth outstripping the export growth, the trade gap widened by 24.9 percent.

The income account recorded a 40.4 percent larger deficit than last year, and the deficit in the services account also was 6.4 percent higher. Increasing deficits on trade, services, and income accounts were partly offset by higher surplus in current transfers, including remittances, which increased sharply by 21.8 percent to $3.4 billion.

Despite deterioration in the current account, the overall balance of payments recorded a surplus of $158 million, because of a substantial improvement in the financial account.

Foreign exchange reserves held by SBP increased by $263 million to $11.0 billion at end of February 2007, sufficient to finance 4.7 months' imports. The exchange rate depreciated to Rs 60.73/$ at the end of December 2006 from Rs 60.16/$ at the end of June 2006. External debt increased by $1.2 billion to $36.9 billion in the first half of 2006-07. However, as percentage of GDP, external debt continued to decline, and was 25.4 in December 2006 compared with 27.8 in June 2006.

OUTLOOK Main commodity producing sectors are expected to pick up, and the services sector is likely to maintain its robust growth of 6.8 percent in 2006-07. Due to a sharp increase in import of agricultural machinery last year, as well as the package of incentives for the crop and livestock sub-sectors announced in the 2006-07 budget, the agriculture sector growth is projected to increase 4.0 percent in 2006-07.

The manufacturing sector is expected to expand by 8.6 percent, supported by a substantial increase in import of capital goods in the past several years and particularly heavy investments last year in capacity expansion in cement and fertiliser industries. The expected further easing of oil prices in the second half of the year will also help.

In the services sector, substantial foreign investment in telecom in recent years, along with the privatisation of the Pakistan Telecommunication Company, will help the sector maintain robust growth in 2006-07. Strengthened by reforms and privatisation and ongoing mergers and acquisitions, the financial sector will also maintain robust growth.

However, growth of the wholesale and retail trade will be lower due to deceleration of exports and imports. The services sector, as a whole, is projected to grow by more than 7 percent in 2006-07.

Inflation is expected to decline further in 2006-07 due to the lagged effect of significantly lower monetary growth than the growth of nominal GDP in 2005-06, further tightening of monetary policy in 2006-07, and easing of oil prices. Inflation in 2006-07 is expected to decline to 7.0 percent, but will remain higher than the targeted 6.8 percent.

With the projected high GDP growth, extension of the tax net to real estate transactions and increase in tax rates on some financial services, tax receipts are expected to increase at a robust double-digit rate in 2006-07. Current expenditure is expected to exceed the budget target because of a likely overrun in defence expenditure and higher domestic debt servicing due to higher interest rates. On balance, the fiscal deficit is likely to increase to 4.5 percent of GDP in 2006-07.

Import growth is likely to decelerate in 2006-07, because of expected easing of oil prices in the second half of the year and lower demand for import of consumer durables because of higher interest rates. However, the projected high economic growth and substantial increase forecast in investment will still sustain at 10.0 percent.

Despite a continued robust growth in global trade and continued China-specific safeguards imposed by the USA and European Union (EU) on import of textiles and clothing (T&C), textile and clothing exports are expected to witness a slowdown and overall export growth is projected to decline to 6.0 percent. Both trade and services deficits will widen, increasing the current account deficit (excluding official transfers) to $7.0 billion, or 4.8 percent of GDP.

With pro-growth government policies, continuous increase in the Public Sector Development Program, and the projected increase in total investment, the medium-term outlook for the economy is positive, and the growth target of 7 to 8 percent looks feasible.

Increasing trade with countries in the region, including China, will also help the economy. The boom in banking and telecom is likely to continue. Investments in the oil and gas sector will also start paying off.

A possible further increase in the oil price, in case of escalated tensions on Iran's nuclear issue, or on account of other adverse developments in the region, could hurt Pakistan's economic prospects. In the longer run, the overall continuing low level of savings and investment could depress the economic growth, the ADB 'Economic Update' said.

http://www.brecorder.com/index.php?id=556735&currPageNo=3&query=&search=&term=&supDate=

 

[Neo]

Fata development plan unveiled

ISLAMABAD (April 28 2007): Pakistan on Friday unveiled a $2.06 billion Federally Administrated Tribal Areas (Fata) development plan at Pakistan Development Forum (PDF) and sought $1.06 billion financing from the donors and development partners to implement it on top priority.

The plan comprises a long-term strategy with main focus on building-up of basic infrastructure such as roads, communication and other linkages between Fata and other parts of Pakistan, besides providing resources to the people for income by setting-up industrial zones and promoting cottage industry. NWFP Governor, Aurakzai presented Fata development plan before PDF participants and later on shared its details with them at a special session.

The sector-wise details of the plan indicated that Fata's water supply and sanitation need $54 million, rural development $25 million, agriculture $100 million, livestock ad poultry $25 million, forestry and fisheries $100 million, irrigation, water management and power $100 million.

It also indicated that for physical planning and housing Fata needs $50 million, water and power $54 million, industry $143 million, mining $55 million, trade and commerce $0.6 million.

It also counts key challenges confronted with Fata. These included poor access to public services, socio cultural barriers, limited livelihood opportunities, depleting natural resources, capacity constraints, availability of base line data, skewed development interventions.

The goals and objectives to be achieved for Fata by implementing the development plan included promotion of just, peaceful and equitable society, basic social needs/disparities institutional and financial capacities, expansion of opportunities, increased livelihood security and monitoring and evaluation.

The governor told the participants that the government was actively pursing an agenda of bringing deprived and underprivileged people into main stream by providing them basic facilities. He demanded that Pakistan's development partners should come up with generous financing support to help Islamabad implement its agenda.

He was of the view that Fata traditions and rules will be followed in development process to make the people of that area feel that their were on board for consultative process for the plan. He said employment and hope for better future could help change thinking of youth in Fata and less developed areas of Pakistan and shun away extremism. He said the development agenda will change the lives of the people in less developed areas and encourage them to participate in healthy activities.

The participants of the forum were informed about the step taken to improve law and order situation in Fata. Japanese ambassador was told in response to his question that NWFP and political agents in Fata will facilitate visit of a Japanese fact-finding mission to see the realities on ground in that area.

http://www.brecorder.com/index.php?id=556703&currPageNo=3&query=&search=&term=&supDate=