Pakistan Economy - News & Updates - Archive

[Spring Onion]

Pakistan cbank sees 07/08 c/a deficit near 5 pct of GDP

KARACHI, Oct 29 (Reuters) - Pakistan aims to keep its current account deficit close to 5.0 percent of gross domestic product for the fiscal year ending June 2008, compared to 4.9 percent the previous fiscal year, the central bank said on Monday.

"For this year (2007/08) the target for the current account is close to 5 percent of GDP," Governor Shamshad Akhtar said at a news conference to unveil the central bank's annual report for fiscal year 2006/07.

Akhtar said the current account deficit, which ballooned to $7.2 billion or 4.9 percent of GDP in 2006/07, though manageable in the short-term, remained the single-biggest challenge due to a slowdown in exports.

Weak exports pushed the country's trade deficit in the fiscal year 2006/07 to $13.49 billion, an increase of 11.4 percent over the previous year.

Net foreign investment inflows to Pakistan have also eased in recent months, falling 10.8 percent to $990.1 million in the three months from July to September, after a record $8.4 billion in the whole of 2006/07.


Pakistan Business

 

[AgNoStiC MuSliM]

^^^
The drop in foreign investment inflow is most probably a short term phenomenon linked to the political instability - the situation will probably start improving once the SC rules on Musharraf's constitutionality, and especially after the Elections.

 

[Spring Onion]

^^^
The drop in foreign investment inflow is most probably a short term phenomenon linked to the political instability - the situation will probably start improving once the SC rules on Musharraf's constitutionality, and especially after the Elections.

Agreed Agno But
Though i am not good at Economy things but i guess these FDI may be good for short spane of time adding to our economy and providing employments in relative sectors but in the long run its the foreign companies that get the maximum benefit out of Pakistan to their native nations.
In the start they invest and after getting strong footing the flow of money truns outside Pakistan.

Isnt it ??

Or if my perception is wrong than do correct me.

Jana

 

[Neo]

Not necessarily Jana Jee, only the profit will return to the investor not the infrastructure. In emerging countries like Pakistan usually the gained profit is reinvested into the country as long as the returns remain high.

The presence of multinationals is good for any country making her entrance into globalisation since it will only enhance networking throughout the globe.
We've seen it happen in Korea, Singapore, China and Malaysia and its happening in India and Pakistan now.

We have more to gain from FDI than to lose.

 

[Spring Onion]

OK got to some extent Neo.

Tell me many brands of international products manufactured in a second country instead of the origion of the product, how much benfits the manufacturing country and the origional company.

One more question the Economic growth is nice but what about Cost push Inflation ??? Isnt it that with high growth we also face cost push inflation ?

 

[Neo]

OK got to some extent Neo.

Tell me many brands of international products manufactured in a second country instead of the origion of the product, how much benfits the manufacturing country and the origional company.

You will be surprised to learn how many American, British, German or Japanese brands you buy are actually manufactured in countries like China, Korea, Brasil or even Pakistan!
From garments, cosmetics and healthcare products to high tech manufactured electronic goods, you'll find those multinationals doubling the size of their production and multipying their profits by shifting production to cheaper and developped markets.

One more question the Economic growth is nice but what about Cost push Inflation ??? Isnt it that with high growth we also face cost push inflation ?

Relatively high inflation is comon to emerging economies like Pakistan since the demand for consumers goods doesn't always meet the supplyline from home and results into higher import hence higher prices.

To curb inflation we need to enhance production and effeciency of locally manufactured goods, provide better infrastrucure for these goods to reach the mass and to replace many imported items by local brands which can be produced way cheaper by our own industry. Also keeping strategic deposits or reserves in food items is a good way to secure supply at all times.

Just for the record, Pakistan imports 67% of its edible oils from abroad but we have the suiteable climate and know how to reach selfsufficiency.
Government should interfere in this and promote industrial growth in area's where we have the potential to become self reliant.

There's much more we can do and believe me current governemt is poised to fight inflation and bring it back to 5% within next five years.

 

[Spring Onion]

You will be surprised to learn how many American, British, German or Japanese brands you buy are actually manufactured in countries like China, Korea, Brasil or even Pakistan!
From garments, cosmetics and healthcare products to high tech manufactured electronic goods, you'll find those multinationals doubling the size of their production and multipying their profits by shifting production to cheaper and developped markets.

Yes i know and that is why i had asked you the question beacuse it doubles their production as well as benfits beacuse it involves cheap labour and saves the cost of transporting the products.
But i have a question despite this we get the products at relatively high price as compare to other countries.

 

[AgNoStiC MuSliM]

Yes i know and that is why i had asked you the question beacuse it doubles their production as well as benfits beacuse it involves cheap labour and saves the cost of transporting the products.
But i have a question despite this we get the products at relatively high price as compare to other countries.

That is complex question to answer, because the situation is different in different sectors of the economy. But take the automobile sector for example - the primary reason behind the higher cost of cars is the "deposit" or whatever the dealers charge on top of the MSRP. This is a consequence of both greed and higher demand than supply.

My personal opinion is that a lot of industrialists in Pakistan are still stuck in the old mentality of making money in the short term the quickest way possible, rather than investing in capacity increase, modernization, efficiency in systems etc. Of course this isn't completely their own fault, a stagnant, relatively small Pakistani economy never really provided them with the incentive to do any of the above.

 

[Neo]

Widening current account deficit, high inflation serious challenges: SBP ​

KARACHI (October 30 2007): Pakistan''s economy recorded one of the fastest growth rates in Asia during the 2007 fiscal year by achieving seven percent of real gross domestic product (GDP) growth This was stated by State Bank of Pakistan Governor Dr Shamshad Akhtar at a press conference on the occasion of the issuance of the State Bank''s annual report 2006 here on Monday.

GDP growth accelerated to 7percent in FY07.

Investment to GDP ratio at record 23 percent was complemented by a surge in domestic private investment and record FDI flows.

In proportion to GDP, national savings rose, external debt burden declined, total revenue increased, budget deficit stayed at FY06''s level of 4.3 percent of GDP.

-- Central bank chief expresses concern over present tax to GDP ratio.

-- Believes present expansionary fiscal policy poses a dilemma.

-- Underscores the need for developing long-term debt markets.

-- Declares that subsidies are unsustainable given the shrinking space available to government.

Akhtar said that investment to GDP ratio rose to a record 23 percent in FY07 from 21 percent in FY06, which have contributed by a surge in domestic private investment and record foreign direct investment (FDI) flows. As a result, the economy looks well poised to continue on a high growth trajectory in coming years.

However, despite the improvement, the investment to GDP ratio remains low in Pakistan. Governor SBP showed concern over the tax revenue ratio in the GDP, which still stands at 10.2 percent as against the 9.9 percent during FY06.

The present expansionary fiscal policy poses a dilemma. On one hand, the high fiscal deficit in recent years is driven primarily by development spending, particularly on infrastructure, which is quite necessary if the growth in the economy is to be sustained, she said.

Central bank believes that present expansionary fiscal policy poses a dilemma and it is believed that it would further grow the economy, while it underscores the need for developing long-term debt markets.

More specifically, and in proportion to GDP, national savings rose, the external debt burden declined and total revenue increased while the budget deficit stayed at last year''s level of 4.3 percent of GDP, she said.

However, key macroeconomic challenges remain to be fully addressed yet. The current account deficit widened further in FY07, the tax to GDP ratio is still very low, and inflation remained stubbornly high, showing only a sluggish decline in FY07, she added.

She said the economy would continue to grow strongly during the 2008 fiscal year 2008, but warned that external current account deficit and inflation would be the key challenges to the economy.

The SBP Governor said that domestic prices of key food staples had already been affected by rising international prices, and if 2008 financial year harvest of food crops remained below expectations, the situation could be aggravated.

Akhtar said that the first quarter data suggested that inflationary pressures were, however, strong, as efforts for reverting the food prices to double digits in September 2007 had not been made.

Key risks to the inflation outlook appeared to be the energy and food staple prices in the wake of rising international prices, enhancing production in 2008 financial year would be critical for easing sonic of the supply constraints, both to ease inflationary pressures as well as to provide for export growth.

"This is expected to keep domestic inflation close to the annual target in 2008 financial year, however, the domestic economy was partially insulated from the rise in international energy prices during 2007 financial year due to the government''s decision not to pass on to customers the increase in the prices of key fuels.

"This policy may not be sustainable if energy prices increased further," she added. The SBP Governor said private sector credit off-take had been low in the first quarter, partly reflecting the seasonal trends and partly because the companies are positioning themselves to gear up as the emerging environment unfolds.

"Foreign inflows remained in line with 2007 financial year trends in the first quarter and are likely to gain momentum in the second half of the year," she added.

Given that domestic sugar stocks could be exhausted by November 2007, any such delay in the sugar-crushing season could lead to a price hike. However, administrative measures such as extension in the network of utility stores and pro-active imports would help alleviate any short-term shortages, she said. Pakistan''s current account deficit, though sustainable in the short-term, would remain a key challenge for the economy.

Further deceleration in imports growth, together with a small improvement in export growth, and a robust rise in remittances underpinned the projected improvement in the current account deficit for 2008 financial year, while the deficit was expected to be larger than the 2007 financial year figure in absolute terms.

She said that aggressive monetary tightening should help contain demand pressure in the economy, with monetary growth forecast to remain within the indicative targets.

Uncertainly in the global oil prices and increasing commodity prices, which had been on the rise in the last few weeks, an anticipated increase in the import of telecom following China''s investment in Pakistan''s telecom sector, and the likely rise in power generating machinery imports might put upward pressure on the import bill, she added.

She said that it was likely that the GDP, inflation, imports, fiscal deficit and current account deficit targets would be achieved, while the targets of export, monetary assets would not chase.

Current SBP projections, based on the limited data availability to date, suggested that the growth was anticipated to be broad-based, with the strong contributions expected from agriculture and the services sector, she said.

"It has projected that the GDP growth target would be 7-7.4 percent, inflation 6-7 percent, monetary assets (M2) 13.2-14.2 percent, fiscal deficit around four percent and current account deficit growth would be 4.8 percent during the current fiscal year," she said.

During 2008 fiscal year, export would be 18.3 billion dollars as compared to target of 18.9 billion dollars as per balance of payment, while imports would be 28.9 billion dollars as against the target of 29.6 billion dollars.

"The slowdown in monetary growth is expected to be reflecting mainly through growth in private sector credit, lower government borrowings from the SBP, and slower net growth in net foreign assets (NFA) of the banking system, consequent to changes in the monetary policy framework in 2008 financial year," she said.

Regarding the changes in the financial act by providing some financial regulation responsibilities to the SECP, she made clear that SBP was solely responsible and regulator of the financial sector and would continue to regulate the sector in the future.

Akhtar also said that it was worth mentioning that in the coming years, the country was likely to face higher burden of debt-servicing as repayments of the rescheduled non-ODA Paris club debt stock would resume from 2008 financial year, and the maturities of the Eurobond, issued in 2004 financial year and Sukuk issued in 2005 financial year would become due in 2009 financial year and 2010 financial year respectively.

In addition, interest payments on various Eurobonds, issued recently, were likely to add to debt-servicing burden in coming years. Therefore, to maintain the same debt-servicing capacity, the country ''s foreign exchange earnings, and particularly export earnings needed to grow faster, she said.

She said that presently the country''s external debt stood 40.1 billion dollars during 2007 financial year and an important feature for 2007 was the sharp rise of 57.1 percent in interest payments on domestic debt. The strongest contribution to the increase was probably from maturing high-cost, zero coupon instruments (DSCs) issued in late 1990s.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Major economic targets achieved ​

KARACHI (October 30 2007): Pakistan has achieved major economic targets, including real gross domestic product (GDP) growth, agriculture, services sector, investment, tax revenue during 2007 fiscal year.

At the same time it missed the targets in sectors like manufacturing, large scale, consumer price index (CPI), sensitive price index (SPI) monetary assets (M2), import, export, credit to private sector, budgetary expenditure and budgetary deficit.

The State Bank of Pakistan, in its annual report on the state of economy, said that Pakistan''s economy witnessed a moderate recovery during 2007 financial year with real GDP growth reaching the 7.0 percent, as compared to 6.6 percent growth seen in 2006 financial year.

"The Pakistan is among countries in the region, which have achieved GDP growth at the rate of seven percent and other two countries are China and India," it said.

"This is the fourth successive year of sustained high growth in the economy, with the average annual growth accelerated to seven percent during 2003-07 period. The continued strong performance of the services sector made the major contribution to the 2007 financial year''s outcome, while growth in agriculture and industry also witnessed improvement over the previous year. "The investment to GDP ratio rose to a record 23 percent in 2007 financial year from 21 percent in 2006 financial year.

"This was contributed by a surge in domestic private investment and record foreign direct investment (FDI) flows. As a result, the economy looks well poised to continue on a high growth trajectory in coming years. "However, despite the improvement, the investment to GDP ratio remains low in Pakistan," the report said.

Although the savings to GDP ratio had also increased to 18 percent during 2007 financial year compared with 17.2 percent in the preceding year, it was still low as compared to regional and international standards, said the report.

"To increase the savings rate, it is necessary to expand the network of banks, microfinance institutions, and postal savings to the far-flung areas with simple procedure and friendly atmosphere for small depositors. In addition, savings schemes for school/college students could also help inculcate savings behaviour from an early age," annual report added.

Agriculture sector witnessed a strong growth of five percent in 2007 financial year as against the target of 4.5 percent. "The recovery in the agricultural growth during 2007 financial year is principally driven by a remarkable growth of 7.6 percent by major crop sub-sector.

"A striking feature in 2007 financial year is that the yields obtained on almost all-important major crops were either at or near 10-year highs. Apart from favourable weather, the improvement in yields in recent years was probably helped by tile improved access to credit and supportive government polices (the latter includes ensuring better seed availability, provision of subsidy on DAP fertilisers.

"The industrial sector witnessed a moderate recovery, with 6.8 percent growth during 2007 financial year compared with five percent in 2006 financial year. "This was the second consecutive fiscal year when growth targets for industrial sector remained unachieved. Within the industrial sector, the highest growth was observed," the report observed.

In the construction sub-sector with value-addition rising by 17.2 percent in 2007 financial year, compared with only 5.7 percent in 2006 financial year. The SBP report said that LSM growth remained a significant contributor to the GDP growth during 2007 with value-addition rising by 8.8 percent, down from the 10.7 percent growth in the preceding year and as against the target of 11 percent.

The electricity and gas distribution sub-sector continued to record losses in 2007 financial year, with the value-addition by this sub-group falling by 15.2 percent in 2007 on top of the decline of 23.8 percent in the preceding year.

For yet another year, the services sector growth remained well above target; the eight percent increase in value-addition during 2007 financial year was substantially above the 7.1 percent target. The 2007 financial year target had been set lower than the 9.6 percent growth recorded in 2006 financial year.

The sustained strong growth by the services sector for the last six successive years has contributed to a structural shift in the economy, with services contributing over half of GDP in 2007 financial year.

The sustained high pace of growth in the economy is also reflected in a record level of investment during 2007. The total investment to GDP ratio rose to a record level of 23 percent in 2007, significantly higher than 21.7 percent seen in the preceding year as well as the annual target of 21.5 percent, the SBP said in the report.

"This impressive performance is a result of continued strength of domestic demand, a sharp rise in foreign direct investment (FDI) as well as a healthy increase in the public sector development programme (PSDP).

"Country''s budgetary expenditures and deficit has also surpassed the annual target by reaching 19.2 percent and 4.3 percent of GDP respectively as compared to targets of 17.5 percent and 4.2 percent of GDP.

"Inflationary pressures visibly declined in the domestic economy during the initial months of 2007, pulling down the inflation numbers for the period below that in the preceding fiscal year. This reflects the impact of weaker growth in the prices of non-food components," the SBP annual report said.

However, the targets of the CPI and SPI had not achieved as the CPI stood at 7.8 percent as against the target of 6.5 percent, while CPI stood at 9.4 percent during 2007 financial year.

Inflationary pressures remained strong throughout 2007 financial year despite a visible slowdown in non-food inflation. Strength of food price inflation drove the annual average CPI inflation for 2007 to 7.8 percent, resulting in price index slippage by 1.3 percent relevant to the annual target of 6.5 percent.

Food inflation remained in double digits for most of the months of 2007 financial year due to the following reasons:

-- Rising food prices in international market.

-- Domestic supply shortages of some important minor crops.

-- Higher demand on the back of increasing income levels.

"The latter indicates a significant contribution by policies to contain excessive growth in aggregate demand. Despite these gains, the eventual 2007 financial year inflation outcome was disappointing, given that the average annual CPI inflation of 7.8 percent was considerably higher than the 6.5 percent target for the year.

"A surge was observed in direct tax collections and in non-tax revenues during 2007 financial year, but the fiscal deficit for the year rose to 4.3 percent of GDP, a little higher than the target of 4.2 percent," annual report said.

"As a result of a relative slowdown in the growth of the current account deficit and a record increase in investment inflows, Pakistan''s external account surplus improved substantially to 3.7 billion dollars during 2007 financial year as compared to 1.3 billion dollars in 2006 financial year.

"The 2007 financial year moderation in the growth of current account deficit is attributable mainly to a sharp fall in the growth of imports and strong increase in remittances," it said.

However, the impact of lower import growth (8.1 percent) in 2007 financial year on the trade deficit was lost due to the unanticipated weakness in exports, it said.

Export growth fell from 14.3 percent in 2006 financial year to only 3.2 percent in 2007 year. The slowdown in textile exports was the major contributor to the decline in the overall export growth, but the accompanying fall in exports of non-textile manufacturers and commodity producing sector made matters worse, it said.

Nevertheless, an impressive rise in the foreign private investment continued to moderate the impact of growing current account deficit in 2007 financial year. Specifically, financial account surplus increased substantially from 5.8 billion dollars in 2006 financial year to a record surplus of 10.1 billion dollars during 2007 financial year, the reports said.

This improvement in the financial account was largely contributed by equity flows rather than debt, it said, adding benefiting from the substantial surplus in the external account, Pakistan''s overall reserves increased by 2.5 billion dollars in 2007 as compared to 524 million dollars rise in 2006.

After persistent widening during last four years, the difference between import and export growth seems to be converging during 2007 on the back of substantial slowdown in import growth, from 38.7 percent in 2006 to 6.9 percent in 2007.

However, this welcome slowdown in import growth could not help in reducing the trade deficit due to a concurrent slowdown in export growth from an average 15.9 percent during last four years to 3.4 percent during 2007. As a consequent, the trade deficit reached an all time high of 13.5 billion dollars during the period under review.

Nonetheless, the trade deficit as compared to size of economy slightly declined from record high level of 9.46 percent during 2006 to 9.31 percent during 2007, the SBP said in the annual report. "The country has missed export target and just 3.4 percent growth witnessed in the exports as against the target of 13.1 percent, while the imports show 6.9 percent growth during last fiscal as compared to target of two percent decline.

"On the import side, uncertainly in the global oil prices, increasing commodity prices, anticipated increase in the import of telecom following China''s investment in Pakistan''s telecom sector and likely rise in power generating machinery may put upward pressure on the import bill," the SBP report added.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

SPI-based inflation up 8.68 percent ​

ISLAMABAD (October 30 2007): The unhindered increase in wheat and wheat flour prices, as pointed out in Sensitive Price Indicators (SPI), has made it difficult for the poor to make both ends meet with chapati price going up from Rs 3 to Rs 4.

The data on weekly SPI released by the Federal Bureau of Statistics here on Monday shows that per kg wheat price has gone up from Rs 14.61 on October 18 to Rs 15.03 on October 25. As a result, the price per kg of average quantity wheat flour touched Rs 16.59 from Rs 16.23 of last week.

The volatility in the prices of essential commodities was a great concern for the poor, as it was eroding their monthly budget. Every week, they were put in a different situation to deal with the price of every commodity as one after another was going up. During the week under review, the prices of tomatoes, onion and chicken declined, while the prices of egg, red chilli, mustard oil and bath soap soared high.

The SPI-based inflation was recorded at 8.68 percent up on the week ending October 25 against the corresponding period last year, but declined to 163.65 from 164.96 last week.

The inflation was recorded 10.75 percent on October 25 for the income group earning Rs 3,000 and 10.61 percent for between Rs 3,000 to Rs 5,000 earners. Food experts believe that if unabated food inflation is not checked in time it could be disastrous in the years to come.

The SPI bulletin, based on data, collected from 17 urban cities across the country on 53 essential items, showed increase in the prices of 14 food items, decrease in 11, whereas prices of 25 items though remained unchanged yet dearer over the same period last year.

The FBS records sharp decline in the price of tomatoes, from Rs 45 during the last week to Rs 32 on week ending October 25, but it was surprising to note that FBS records average price of plain bread medium-size in Rawalpindi and Islamabad Rs 16, in fact, the price of bread is Rs 25 in the twin cities.

Further analysis of the data shows that FBS claims that rice Irri-6 is available at Rs 22 per kg in the twin cities. The fact is that no brand of rice is available at Rs 22 per kg.

Similarly, the price of milk is different from what was reported by the FBS. Milk in the twin cities is being sold at over Rs 30 per liter, but FBS claims its price as Rs 28 per liter. There is also difference between actual prices and the prices reported by the FBS of some other commodities.

The data when compared to last years shows that eggs are 38.13 percent dearer over the same period last year, red chillies 51 percent, mustard oil 45.17 percent, wheat flour 26.457 percent, wheat 27.37 percent and bath soap 22.04 percent.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Debt, liabilities rise by 10 percent in fiscal year 2007 ​

KARACHI (October 30 2007): Country's total stock of debt and liabilities (TDL) rose by 10 percent in FY07 to reach Rs 5,023.6 billion. The major causative factors for this increase in TDL were the rising level of country's current account deficit and a large fiscal deficit that raised the financing needs of the country.

State Bank of Pakistan in its annual report on economy has warned that in the coming years, country is likely to face higher burden of debt servicing as repayments of the rescheduled non-ODA Paris club debt stock will resume from FY08, and the maturities of the Eurobond issued in FY04 and Sukuk issued in FY05 will become due in FY09 and FY10 respectively.

In addition, interest payments on various Eurobonds issued recently are likely to add to debt servicing burden in coming years. Therefore, in order to maintain the same debt servicing capacity, the country's foreign exchange earnings, and particularly export earnings need to grow faster.

Despite this increase in the TDL stock, the ratio of total debt and liabilities to GDP continued to decline which shows country's improved debt servicing potential.

During FY07, 62.5 percent share of the new inflows was on floating interest rates, including $750 million 10-year Eurobond issued by the country and a substantial portion of inflows from ADB.

Pakistan's external debt and liabilities (EDL) rose to $40.1 billion during FY07, representing a $2.9 billion increase over the stock in FY06. The rise in the EDL stock constituted inflows from IDA, ADB, and the issuance of a new Eurobond. Private loan inflows also had a sizeable contribution in the increase of the debt stock. Encouragingly despite this rise in the stock of EDL, Pakistan's EDL to GDP ratio continued to improve, reflecting country's improved debt servicing ability, central bank said.

Pakistan's domestic debt stock increased sharply during FY07, registering a growth of 11.9 percent - much higher than the average growth of 7.7 percent during the preceding four years. This rise in stock is driven by the growth in the floating debt category, which accounted for nearly two-thirds of the rise in domestic debt in FY07, central bank added.

However, despite the raise in the TDL, SBP said "the TDL to GDP ratio for FY07 remained significantly below the target of 60 percent set for the country in the Fiscal Responsibility and Debt Limitation Act 2005 to be achieved in FY13."

The SBP said that an important feature for FY07 is the sharp rise of 57.1 percent in interest payments on domestic debt. The strongest contribution to the increase is probably from maturing high-cost, zero coupon instruments (DSCs) issued in late 1990s.

A significant share of the inflows received during FY07 had a long term maturity ranging from 15-40 years. The improved maturity structure of loan inflows to some extent offsets the effects of the floating interest rate structure of these loans, annual report said.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Fourth successive year of sustained high growth in economy: SBP ​

ARTICLE (October 30 2007): Reproduced alongside is the executive summary of State Bank of Pakistan Annual Report 2006-07 released by SBP Governor Dr Shamshad Akhtar on Monday. Pakistan's economy witnessed a moderate recovery during FY07 with real GDP growth reaching the 7.0 percent target, as compared with 6.6 percent growth seen in FY06.

This is the fourth successive year of sustained high growth in the economy, with the average annual growth accelerated to 7.0 percent during FY03-07 period. The continued strong performance of the services sector made the major contribution to the FY07 outcome. Growth in agriculture and industry also witnessed improvement over the previous year.

The disaggregation of the aggregate demand presents an encouraging scenario. Firstly, the growth in real private consumption remained stable, inching up from 3.3 percent during FY06 to 4.1 percent. Secondly (and more importantly) real gross fixed capital formation registered a double digit growth for the third consecutive year, accelerating to 20.6 percent in FY07, due to higher FDI inflows and an acceleration in public investment on the back of a higher PSDP. As a result of the increase in public and private investment, the investment to GDP ratio rose to a record 23.0 percent in FY07.

AGRICULTURE:

Agricultural growth witnessed a recovery in FY07. This was primarily due to a considerably improved performance by the cropping sub-sector that overshadowed the impact of a moderation in the growth of the livestock sub-sector. The contribution of the remaining sub-sectors to overall agricultural growth was not material.

A sharp rise in value addition by crops, in turn, centered essentially around three major crops, ie, wheat, sugarcane and gram, all of which recorded exceptionally strong growth during FY07, comfortably offsetting the disappointing growth in two other cash crops (cotton and rice).

The growth of the livestock sub-sector in FY07 is one of the strongest in a decade (exceeded only by the exceptional FY06 growth). Moreover, consequent to robust demand, this sub-sector is attracting investment in the production, processing, transportation and storage of dairy products. This augurs well for future growth prospects.

In recent years, agriculture credit disbursement has increased substantially reflecting improvements in access (as banks have aggressively expanded activities in the sector), and sustained demand (as farmers were encouraged by strong commodity prices, supportive polices and reasonable weather). This was also seen in FY07, when the annual target was exceeded by 5.5 percentage points to reach Rs 168.8 billion against Rs 137.5 billion disbursed in FY06.

INDUSTRY:

The industrial sector witnessed a moderate recovery, with 6.8 percent growth during FY07 compared with 5.0 percent in FY06. This was the second consecutive fiscal year when growth targets for industrial sector remained unachieved. Within the industrial sector, the highest growth was observed in the construction sub-sector with value-addition rising by 17.2 percent in FY07, compared with only 5.7 percent in FY06. The FY07 growth is not only higher than the 7.0 percent target, it is also the second highest growth recorded by this sub-sector since FY76.

Mining & quarrying sector witnessed 5.6 percent YoY growth during FY07 which is not only higher than the 4.6 percent growth seen in FY06, but also well above the 3.2 percent growth target for FY07.

LSM growth remained a significant contributor to GDP growth during FY07 with value-addition rising by 8.8 percent, down from the 10.7 percent growth in the preceding year. This deceleration in LSM growth appears to reflect a broad moderation in external and domestic aggregate demand, as well as capacity and input constraints in some industries. The textile sector contributed almost a quarter of the increase in value-addition in LSM during FY07.

The electricity and gas distribution sub-sector continued to record losses in FY07, with the value addition by this sub-group falling by 15.2 percent in FY07 on top of the decline of 23.8 percent in the preceding year.

SERVICES;

For yet another year, the services sector growth remained well above target; the 8.0 percent increase in value-addition during FY07 was substantially above the 7.1 percent target. The FY07 target had been set lower than the 9.6 percent growth recorded in FY06 taking into account the anticipated deceleration in some of the larger sub-sectors of the services group, but the performance of two sub- sectors - finance & insurance, and social & community services - proved to be much better than forecast. The sustained strong growth by the services sector for the last six successive years has contributed to a structural shift in the economy, with services contributing over half of GDP in FY07.

NATIONAL SAVINGS:

During FY07, national savings rose sharply by 19.8 percent, raising its share in GDP to 18 percent, the highest in the last four years. It should be noted that the despite a rise in FY07, Pakistan's savings to GDP ratio remains quite low relative to other emerging economies. To maintain the growth momentum, there is a need of investment flows in the economy without putting pressures on external balances. This is only possible by a rise in savings in the economy. The main causes of low savings in Pakistan include low per capita income, lack of proper saving infrastructure (particularly in small towns and rural areas) and high dependency ratio.

To increase the savings rate, it is necessary to expand the network of banks, microfinance institutions, and postal savings to the far flung areas with simple procedure and friendly atmosphere for small depositors. In addition, savings schemes for school/college students could also help inculcate savings behaviour from an early age.

INVESTMENT:

The sustained high pace of growth in the economy is also reflected in a record level of investment during FY07. The total investment to GDP ratio rose to a record level of 23 percent in FY07, significantly higher than 21.7 percent seen in the preceding year as well as the annual target of 21.5 percent.

This impressive performance is a result of continued strength of domestic demand, a sharp rise in foreign direct investment (FDI) as well as a healthy increase in the public sector development program (PSDP).

In real terms, total investment witnessed a growth of 20.6 percent, the highest-ever growth recorded for Pakistan. The sustained double-digit growth in real investment for three years in a row is also an unprecedented phenomenon for Pakistan. The persistent increase in real investment reinforces the view that the current economic growth momentum would continue for a longer period. However, there is a need for effective implementation of second generation reforms, focusing on institution-building, improvement in governance, etc so that the cost of doing business can be reduced substantially in years ahead.

PRICES:

Inflationary pressures visibly declined in the domestic economy during the initial months of FY07, helping pull down the inflation numbers for the period below that in the preceding fiscal year. This evident deceleration in inflation, shown by all of the price indices, mainly reflects the impact of weaker growth in the prices of non-food components. The latter indicates a significant contribution by policies to contain excessive growth in aggregate demand.

Despite these gains, the eventual FY07 inflation outcome was disappointing, given that the average annual CPI inflation of 7.8 percent was considerably higher than the 6.5 percent target for the year.

The inability to achieve the inflation objective was principally due to the unexpected strength of food price inflation during the year, which considerably offset the gains from (1) the demand management policies and (2) the government subsidies that partially cushioned the domestic economy from high international oil prices.

PUBLIC FINANCE:

A surge was observed in direct tax collections and in non-tax revenues during FY07 but the fiscal deficit for the year rose to 4.3 percent of GDP a little higher than the target of 4.2 percent. The relatively higher fiscal deficit during FY06 and FY07 is mainly attributed to the exceptional expenditure on account of relief and rehabilitation of earthquake affected areas. In FY07 it is also supported by strong growth in current expenditure.

The large increase in current expenditure, driven by a sharp rise in debt servicing costs, overshadowed the impact of a substantial increase in revenues. The above-target 22.9 percent increase in CBR tax collection pushed up the tax-to-GDP ratio to 10.2 percent in FY07, up from 9.9 percent in the previous year. The strong growth in CBR taxes was caused by an extraordinary growth of 48.2 in direct tax collection during FY07. However, the weak performance in indirect taxes partially offset the impact of this rise. The exceptional tax collection was equally supported by 26.2 percent YoY growth in non-tax revenue.

Reliance to finance the fiscal deficit of Rs 377.5 billion was almost on external and domestic resources during FY07. The major sources of external financing during FY07 were program loans/commodity aid, project aid and borrowings from international capital market through the issuance of various bonds. Domestically, the government obtained an amount of Rs 177.8 billion that was on almost same level in FY06. But a compositional shift in financing was observed in domestic sources as in FY06 government used a large amount of Rs 97 billion from privatisation proceeds to finance the deficit that remained at Rs 19 billion in FY07.

The total provincial revenue receipts stood at Rs 483.4 billion during FY07 with tax revenue contributing Rs 400.1 billion. All the provinces recorded revenue surpluses accompanied with a substantial rise in development expenditure. The provincial share in federal tax receipts increased from 89.1 percent in FY06 to 91.6 percent in FY07.

MONEY AND BANKING:

SBP continued to maintain a tight monetary policy during FY07. This was desirable to further moderate aggregate demand pressures in the economy which were still present despite continued monetary tightening since September 2004. The presence of excessive demand pressures was already obvious in terms of high inflation through most of FY06.

The inflation target for FY07 was set 6.5 percent compared to a high inflation of 7.9 percent in FY06. However, the monetary management during FY07 was complicated by the dual mandate of maintaining price stability and economic growth that required SBP to avoid significant slippage in targeted real GDP growth for FY07 that could have occurred due to excessive tightening.

In this backdrop, the monetary policy framework for FY07 envisaged a further slowdown in monetary expansion (M2) to 13.5 percent from 15.1 percent growth realised in FY06. Simultaneously, as export growth continued to weaken, SBP took measures to partially shelter strategic sectors (textiles, and exports).

In order to achieve the broad money target, SBP first raised the reserve requirements for banks and then increased its policy rate by 50 basis points to 9.5 percent. At the same time, SBP also continued to drain excess liquidity from the interbank market and maintained the overnight rates persistently close to the discount rate through most of FY07. In addition, the SBP provided support to the exporters in the form of reducing rates on export finance scheme (EFS), and a debt-swap facility for strategic sector of the economy that substantially reduced the cost of fixed investment loans acquired in recent years.

SBP monetary policy proved effective in considerably moderating aggregate demand pressures in some sectors of the economy as reflected in a visible slowdown in import demand and private sector credit during FY07. The reduction in aggregate demand was also reflected in the continued downtrend in core inflation (NFNE). More importantly, the monetary tightening was clearly not excessive, given that the real GDP growth during FY07 comfortably achieved its target. Moreover, tight liquidity conditions in the interbank market probably helped in reducing speculative and unproductive demand for credit. In this perspective, it is encouraging to see that the demand for fixed investment loans during FY07 has remained intact, even a part of the slowdown visible in working capital loans appears short-lived (as a few structural factors limited the demand and supply of these loans during the year).

Unfortunately, the impact of the slowdown in aggregate demand pressures in the economy did not translate into a decline in overall CPI inflation during FY07. Average CPI inflation for the year was 1.3 percentage points higher than the annual target, mainly because the gains from a deceleration in aggregate demand growth in some sectors of the economy were largely offset by an unexpected strength in food inflation, particularly during H2-FY07. To put this in perspective, had food inflation in FY07 remained at the average level observed in FY06 (ie, 6.9 percent), CPI inflation would have remained below the 6.5 percent target for the year.

Another problem for monetary policy was the abrupt rise in monetary aggregates during the last month of FY07, entirely caused by a surge in external receipts. As a result, M2 growth exceeded the annual target by 5.8 percentage points to reach 19.3 percent. Since the acceleration in the growth of monetary aggregates was concentrated in the last month of FY07, it probably had only a weak contribution to inflation in FY07, but is more likely to impact FY08 inflation. For that reason, the central bank undertook corrective monetary policy measures in July 2007.

A large part of the slippage in M2 target during FY07 stemmed from government borrowings. In particular, the sharp rise in net foreign assets (NFA) of the banking system during June 20075 principally reflected external financing needs for budgetary expenses of the government (such as receipts from Eurobond and GDR issues, US Aid inflows, multilateral loans, receipts against logistics support etc).

To put this in perspective, M2 growth during Jul-May FY07 was 14.1 percent which was slightly less than the nominal GDP growth of 14.7 percent for the year. This also suggests that the magnitude of slippage in M2 growth from its target would have been substantially lower had the budgetary finance from the external sector been incorporated more accurately in the monetary policy framework for FY07.

While the overall monetary indicators raised a few concerns from inflationary perspectives, financial soundness continued to exhibit improvement during FY07. More importantly, though the rise in interest rates did create some impact on the quality of loans, the stringent provisioning requirements as well as increased capital requirements did not allow the impact of loan quality on financial stability of the banking institutions. Not only did banks remain adequately capitalised, but the overall asset quality measured in terms of NPLs to loan ratio (net of provisioning) continued to decline.

DOMESTIC & EXTERNAL DEBT:

Country's total stock of debt and liabilities (TDL) rose by 10 percent YoY in FY07 to reach Rs 5,023.6 billion. The major causative factors for this increase in TDL were the rising level of country's current account deficit and a large fiscal deficit that raised the financing needs of the country. Encouragingly, despite this increase in the TDL stock, the ratio of total debt & liabilities to GDP continued to decline which shows country's improved debt servicing potential. The TDL to GDP ratio for FY07 remained significantly below the target of 60 percent set for the country in the "Fiscal Responsibility and Debt Limitation Act 2005" to be achieved in FY13.

Pakistan's domestic debt stock increased sharply during FY07, registering a growth of 11.9 percent - much higher than the average growth of 7.7 percent during the preceding four year. This rise in stock is driven by the growth in the floating debt category which accounted for nearly two-thirds of the rise in domestic debt in FY07. The share of short term debt continued to rise and reached 43 percent during FY07.

This rising share of short term domestic debt means increased vulnerability to adverse short-term interest rate movements, potentially rendering future debt management more difficult. An important feature for FY07 is the sharp rise of 57.1 percent in interest payments on domestic debt. The strongest contribution to the increase is probably from maturing high-cost, zero coupon instruments (DSCs) issued in late 1990s.

Pakistan's external debt and liabilities (EDL) rose to US $40.1 billion during FY07, representing a US $2.9 billion increase over the stock in FY06. The rise in the EDL stock constituted inflows from IDA, ADB, and the issuance of a new Eurobond. Private loan inflows also had a sizeable contribution in the increase of the debt stock. Encouragingly despite this rise in the stock of EDL, Pakistan's EDL to GDP ratio continued to improve, reflecting country's improved debt servicing ability. This improvement in debt ratios was probably an important factor that led to improvement in sovereign rating; Moody's up-graded country's foreign and local currency bond ratings to B1 from B2 in FY07.

Pakistan also witnessed an improvement in the maturity profile of its external debt stock in FY07. A significant share of the inflows received during FY07 had a long term maturity ranging from 15 - 40 years. The improved maturity structure of loan inflows to some extent offsets the effects of the floating interest rate structure of these loans.

During FY07, 62.5 percent share of the new inflows was on floating interest rates, including US $750 million 10-year Eurobond issued by the country and a substantial portion of inflows from ADB. The rising share of such inflows in the total debt stock calls for the need of greater prudence in the future management of country's debt burden. A higher share of flexible rate loans might translate into increasing debt servicing burden for the country in case of adverse movements in these variable lending rates.

It is worth mentioning that in the coming years, country is likely to face higher burden of debt servicing as (1) repayments of the rescheduled non-ODA Paris club debt stock will resume from FY08, and (2) the maturities of the Eurobond issued in FY04 and Sukuk issued in FY05 will become due in FY09 and FY10 respectively. In addition, interest payments on various Eurobonds issued recently are likely to add to debt servicing burden in coming years. Therefore in order to maintain the same debt servicing capacity, the country's foreign exchange earnings, and particularly export earnings need to grow faster.

EXTERNAL SECTOR BALANCE OF PAYMENTS:

As a result of a relative slowdown in the growth of the current account deficit and a record increase in investment inflows, Pakistan's external account surplus improved substantially to US $3.7 billion during FY07 as compared to US $1.3 billion in FY06. The FY07 moderation in the growth of current account deficit is attributable mainly to a sharp fall in the growth of imports (that compensated for an unexpected deceleration in exports) and strong increase in remittances (that partially offset the rise in investment income outflows).

The deceleration in the imports growth was expected in the wake of falling oil prices, improved domestic production of some key food items and overall slowdown in capacity expansion. However, the impact of lower import growth (8.1 percent) in FY07 on the trade deficit was lost due to the unanticipated weakness in exports.

Export growth fell from 14.3 percent in FY06 to only 3.2 percent in FY07. The slowdown in textiles exports was the major contributor to the decline in the overall exports growth, but the accompanying fall in exports of non-textile manufacturers and commodity producing sector made matters worse.

Nevertheless, an impressive rise in the foreign private investment continued to moderate the impact of growing current account deficit in FY07.

Specifically, financial account surplus increased substantially from US $5.8 billion in FY06 to a record surplus of US $10.1 billion during FY07. This improvement in the financial account was largely contributed by equity flows rather than debt.

Benefiting from the substantial surplus in the external account, Pakistan's overall reserves increased by US $2.5 billion in FY07 compared to US $524 million rise in FY06. During FY07, Pak Rupee exhibited a mixed trend vis-à-vis benchmark currency US Dollar; depreciating by 1.14 percent in the first half and then appreciating by 0.81% in the second half of FY07. In the first half, the widening trade deficit drove the Rupee depreciation while in the second half, improved market related inflows helped Rupee to regain most of its lost ground, consequently the Rupee saw a net depreciation of 0.31 percent during FY07.

TRADE ACCOUNT:

After persistent widening during last four years, the difference between import and export growth seems to be converging during FY07 on the back of substantial slowdown in import growth, from 38.7 percent in FY06 to 6.9 percent in FY07. However, this welcome slowdown in import growth could not help in reducing the trade deficit due to a concurrent slowdown in export growth from an average 15.9 percent during last four years to 3.4 percent during FY07.

As a consequent, the trade deficit reached an all time high of US $13.5 billion during the period under review. Nonetheless, the trade deficit as compared to size of economy slightly declined from record high level of 9.46 percent during FY06 to 9.31 percent during FY07.

The broad based slowdown in import growth is mainly attributed to (1) decline in global oil prices, (2) the reduction in excess demand, (3) gradual absorption of one-off impact of liberalising of automobile & telecommunication sectors, and (4) improved domestic production of food items such as sugar and wheat.

On the other hand, the sudden decline in export growth is little confusing given the support to this sector in policy formulation. The poor performance of exports becomes even more worrisome when analysed in the perspective of better environment in the form of robust economic growth in the domestic and key global markets. The slowdown in export growth was also broad based as the textile exports growth declined from last four years average of 14.4 percent to only 4.9 percent during FY07, whereas non-textile export growth declined from last four years' average of 19.2 percent to only 0.6 percent during FY07.

Poor rice, fruit and cotton crops together with EU ban on fish & fish preparations imports from Pakistan and industry specific issues are considered as the main contributory factors behind the sluggish growth in non-textile exports during FY07. On the other hand, slowdown in the textiles exports can be attributed to: (1) low quality of the textile products on account of contaminated cotton and unskilled labour, (2) concentration of exports in the low and middle value added textile items, (3) frequent power failures in the country, and (4) EU market specific issues such as the antidumping duty on the bedwear exports and only partial restoration of GSP facility.

Going forward, the rising cotton price which is main input for textile industry coupled with abolition of China specific textile and clothing safeguards in 2008 by EU and US, along with accession of Vietnam to WTO, are some factors that are likely to give tough time to Pakistan's textile industry. While, the rising cotton prices may not increase Pakistan's relative cost of production against its competitors as global cotton prices are also anticipated to rise, Pakistan's apparel exports to US and EU markets may weaken following the end of the US and EU safeguard measures imposed on China.

On the import side, uncertainly in the global oil prices, increasing commodity prices, anticipated increase in the import of telecom following China's investment in Pakistan's telecom sector and likely rise in power generating machinery may put upward pressure on the import bill. However, increase in hydro power generation on account of better water availability and capacity constrains in the thermal power generation may lead to slower growth of furnace oil import, thereby relieving some pressure from the overall oil import growth.

RECOMMENDATIONS BY INTER-MINISTERIAL COMMITTEE ON FOOD INFLATION:

The prices of food items in Pakistan rose sharply during FY07, leading the government to set up an Inter-Ministerial Committee to assess the causes of the increase and recommend corrective policy measures. The committee found that most of the rise in food inflation was caused by high prices of a small number of commodities.

The increase in the prices of some of these food commodities was found to be structural in nature reflecting diverse factors, such as, rising international prices, where government intervention has a very limited role to play, in the short run. The committee therefore recommended a mix of short-term measures to alleviate the impact of high prices in the short run, as well as, policies to address the structural factors. The key policy recommendations focused on wheat, pulses, sugar, and dairy product prices.

WHEAT:

-- The committee recommended that farmer profitability should be ensured so that the country should be self sufficient in wheat production. In order to achieve this, the committee has suggested that the government should provide support price and promote efficient farming practices resulting in cost reduction.

-- MINFAL has been assigned the task of formulating policies to increase productivity and cost reduction plans in collaboration with the provinces.

PULSES:

-- The committee suggested controlling of pulse prices by adopting a policy of procuring the surplus pulses at market price and later releasing them regularly to maintain the target price and minimise speculators edge.

-- Design a campaign to support farmers before planting. This may include ensuring availability of certified seed with incentives, and announcement of marketing support at support or market price.

-- In case of gram, an aim to procure at least 25% of consumption and a regular intervention is needed to keep gram price from unnecessarily rising throughout the year.

-- MINFAL has been asked to specially focus on the productivity of Mash and Masur and ensure marketability of production and sustain profitability of the farmers.

-- MINFAL has been delegated the task to develop a focused strategy and work with the provinces to predict supply/demand timing, special funding window and incentives for improving farming practices.

SUGAR:

-- Farmers should be able to get at least minimum guaranteed support price.

-- Provinces and Federal government should formulate sugarcane/sugar policy in consultation with stakeholders by September 15 every year.

-- Sugar may not be imported until the duration of sugar season is determined by end March. However in case of abnormally high prices of sugar this condition may not be applied.

-- Build up buffer stocks by importing or purchasing from the local mills and use these stocks to intervene to control sugar prices as and when needed.

LIVESTOCK:

-- A breakthrough can only be made by attracting expatriates and using them to bridge the yawning knowledge gap. The government should facilitate best research practices and provide alternatives to fodder which is very expensive.

Business Recorder [Pakistan's First Financial Daily]

 

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Uranium exploration projects cost may be revised: CDWP meeting on November 3​

ISLAMABAD (October 30 2007): The government is likely to revise the cost of two important projects, related to extensive uranium exploration in D G Khan and Bannu-Kohat plateau, sources told Business Recorder on Monday.

They said that the two projects--Detailed Exploration of Uranium Resources in DG Khan worth Rs 2.06 billion, and Detailed Exploration of Uranium in Bannu Basin and Kohat Plateau costing Rs 1.882 billion--would be revised by Central Development Working Party (CDWP) in its meeting on November 3. Pakistan Atomic Energy Commission (PAEC) is the sponsoring agency of the projects.

The meeting, which will be presided over by Planning Commission Deputy Chairman Dr Akram Sheikh, will take up 50 development schemes in various economic and social sectors.

According to PAEC estimates, Pakistan is home to around 1,000 uranium-favourable sites, which could provide the required fuel for its proposed nuclear power plants, and there is need of intensification of uranium exploration activities all over the country. Sources said that exploration in DG Khan has been going on since 2004. This scheme will be completed by 2014.

The project in Kohat was started in 2005 and this would also be completed in 2014. Apart from this, the CDWP will consider PAEC projects of National Tokamak Fusion Programme worth Rs 1.554 billion, Upgradation and Strengthening of Nuclear Institute for Food and Agriculture, Peshawar Rs 246 million, and Gujranwala Institute of Nuclear Medicine and Radiotherapy, costing Rs 423.6 million.

In water resources sector, Punjab's Barani Integrated Water Resources project, costing Rs 6.27 billion is also on the agenda of the CDWP meeting. The Asian Development Bank is expected to provide Rs 4.5 billion for this project. Management of Hill Torent in Chashma Right Bank Canal area in D G Khan worth Rs 1.6 billion will also be taken up in the meeting.

Ports and Shipping Division has sought Rs 6.6 billion for establishment of 'free zone' at Gwadar, and Rs 500 million for acquisition of land for construction of expressway and railway line on east bay of Gwadar port. These two projects will come up for consideration of the CDWP.

In education sector, the CDWP will look into awarding of 100 scholarships to Bangladeshi students in the fields of medicine, engineering, and IT. This project will cost Rs 77 million.

The CDWP will take up six forestry and wildlife projects. These projects are: Development of Forestry Sector Resources for Carbon Sequestration in the four provinces and AJK.

The government would spend Rs 3.7 billion on this project in Punjab, Rs 3.02 billion in NWFP, Rs 2.0 billion in Balochistan, Rs 1.5 billion in Sindh, and Rs 2.34 billion in AJK. Besides this, a multi-sectoral project for Conservation of Juniper Forests in Balochistan worth Rs 495 million, and Concept Clearance of scheme for Conservation and Development of Indus Delta Mangroves in Sindh of Rs 120 million will also be considered by the CDWP.

Business Recorder [Pakistan's First Financial Daily]

 

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PPIB, EEL sign accord for 226.5 megawatts power project ​

ISLAMABAD (October 30 2007): The Implementation Agreement (IA) for 226.5 MW power project by Engro Energy Limited (EEL) was signed on Monday at Private Power and Infrastructure Board (PPIB). Mohammad Yousuf Memon, Managing Director PPIB signed the agreement on behalf of the Government of Pakistan, while Khalid Mansoor, CEO of Engro Energy (Pvt) Limited (EEL) on behalf of the company.

Earlier on October 26, the company had signed the Power Purchase Agreement (PPA) with NTDC and financial closing of the project is expected very soon. The power plant will be located at Qadirpur, Sindh, using Low BTU permeate gas from Qadirpur field, and will apply combined cycle technology.

The Power Complex will be set up with an estimated cost of $205 million, the sponsor of the project is Engro Chemical Pakistan Limited (ECPL), while the financing will be provided by foreign banks. It is expected that the Power Complex will start supplying power to the national grid by December 2009.

Business Recorder [Pakistan's First Financial Daily]