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Wednesday, 12 June, 2024 I |5 Zil-Hajj, 1445
Rs 20.00 | Vol XIV No 343 I 8 Pages I Islamabad Edition
GOVT UNABLE TO KEEP UP WITH SOARING EXPENDITURES, PAKISTAN ECONOMIC SURVEY REVEALS
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LAST YEAR GOVT TRIED TO INCREASE REVENUES AND SUCCEEDED, BUT STILL UNABLE TO KEEP UP WITH RISING EXPENDITURE PROFIT
ABDULLAH NIAZI
HERE were no real surprises when Finance Minister Muhammad Aurangzeb presented the Pakistan Economic Survey for 2023-24. Days after returning from China where the government faced a hard time finding investors willing to put their trust in Pakistan, Mr Aurangzeb painted a bleak picture of the year that was for Pakistan’s economy. There were few positives to take away from the past year. Pakistan’s economy registered moderate recovery reflected by a GDP growth of 2.38 percent against previous year’s contraction of 0.21 percent. Agriculture emerged as a main driver of economic growth, registering a growth of 6.25 percent on the back of double digit growth in output of major crops. Industrial and services sectors also showed resilience with each posting a growth of 1.21 percent. Current account deficit was kept under check, with marked improvement in foreign exchange reserves, reaching US$ 14.6 billion by end May 2024. The fiscal sector progressed towards stability, propelled by consolidation efforts and targeted reforms. Fiscal deficit remained manageable with an overall primary surplus. Rupee appreciated by almost 3.0 percent during the first eleven months. But other than the small victories that the economy was able to steal, important indicators remained far from satiated. There was a decline in the investment-to-GDP ratio, sluggish
large-scale manufacturing, and high public debt. “It is important to see the level of inflation in 2022-23. [In this] year, the Pakistani rupee suffered nearly 29pc depreciation and the foreign reserves went to just two weeks of import cover,” the finance minister said during his presentation of the survey. As the report itself pointed out, fiscal policy continues to grapple with the legacy of persistently high fiscal deficits and debt, resulting from unprecedented expenditures and moderate growth in revenues. This essentially means that the government has continued to have its expenses increase without having the necessary revenues to cover these costs. The government’s efforts last year were focused on increasing revenues and many fiscal consolidation efforts were made over the last year. The prob-
lem, however, has remained rising expenditures mainly caused by higher markup payments. Total expenditure increased by 36.6 percent in July-March FY 2024, compared to 18.7 percent last year. Within total expenditures, current expenditures grew by 33.4 percent due to a 54 percent increase in markup payments during the first nine months of FY24 In contrast, prudent expenditure management strategies led to non-mark-up current spending growth of 20.4 percent relative to mark-up expenditures. Total revenues grew by 41.0 percent in JulyMarch FY 2024, compared to the growth of 18.1 percent observed last year. The substantial increase in revenues has been primarily attributed to a sharp rise in non-tax revenues, which grew by 90.7 percent, driven by higher receipts from SBP profit, petroleum levy, markup (PSEs and others), and
royalties on oil/gas, etc. Total tax collection (federal and provincial) grew by 29.3 percent during July-March FY 2024, compared to the growth of 16.5 percent last year. There was some improvement in the matter of inflation but not by much. The CPI inflation for the period JulyApril FY 2024 recorded at 26.0 percent as against 28.2 percent during the same period last year. The other inflationary indicators like Sensitive Price Indicator (SPI) recorded at 30.2 percent as against 31.7 percent last year. Wholesale Price Index (WPI) recorded at 22.4 percent in July-April FY 2024 compared to 34.1 percent in the same period last year. On the surface, debt management also seems to have been an area of improvement. There has been a substantial increase in interest payments on external debt and liabilities, which rose by approximately US $ 0.9 billion to US $ 4.2 billion during JulyMarch FY2024, compared to US$3.3 billion during the same period last year. External public debt was recorded at US$ 86.7 billion at end-March 2024, revealing an increase of around US$ 2.6 billion during the first nine months of the current fiscal year. The debt stock of multilateral sources increased by US$ 1.7 billion. The main gross inflows included US$ 1.9 billion from the IMF program, US$ 1.4 billion from World Bank, US$ 657 million from ADB and US$ 300 million from AIIB. Multilateral loans are mostly contracted on concessional terms i.e., low interest rate and long tenor.
Cabinet thumbs up to legislation to set up Digital Commission, Pakistan Digital Authority
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Finance Minister unveils budget today
PM-LED MEETING ASKS LAW MINISTRY FOR REVIEW OF ACT, AIMS AT DIGITIZING SERVICES SECTOR
ISLAMABAD
STAFF REPORT
The federal government has announced that the budget for the fiscal year 2024-25 will be presented in Parliament on June 12 (Wednesday). Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb will present the budget which has been formulated while ‘considering’ the existing challenges being faced by the economy at domestic and international fronts. “The budget will be aimed at mitigating the people’s sufferings, transforming the agriculture sector, promoting information technology (IT), and boosting exports,” the government sources said. The government also claimed that in addition to fiscal management, revenue mobilisation, measures for economic stabilization and growth, reduction in nondevelopment expenditures, job creation and people-friendly policies for the socioeconomic prosperity of the country would feature in the budget. The preparations for the announcement of the federal budget for fiscal year 2024-25 continued in full swing in accordance with the prescribed timelines. The budget is being prepared in close coordination among all the departments and ministries involved in the budget-related events, including the presentation of the budget in the Parliament and launching of the Economic Survey. It is pertinent to mention here that the budget is being presented when Pakistan is deliberating with the International Monetary Fund (IMF) for a package of up to $8 billion.
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ISLAMABAD STAFF REPORT
The federal cabinet on Tuesday approved in principal the Digital Nation Pakistan Act 2024 to establish the National Digital Commission and Pakistan Digital Authority besides ensuring digitization of national economy and paperless governance. The cabinet which met under the chair of Prime Minister Shehbaz Sharif, asked the Law Ministry to carry out the requisite review of the Act, which also aims at digitizing the services sector in accordance with international standards. Under the Act, the National Digital Commission would act as a policymaking organisation, to be headed by the prime minister and comprising federal and provincial members. Moreover, a Pakistan Digital Authority would be established to achieve the objectives of
Digital Pakistan. Being a corporate entity, the authority would have financial and administrative autonomy. The federal cabinet also approved the appointment of mem-
bers of the National School for Public Policy from both the public and private education sectors. On the recommendation of the human rights ministry, a cabinet committee was constituted to initiate the appointment of a member from Islamabad in the National Commission for Human Rights. The meeting principally approved The Arbitration Bill 2024 and relevant consultation with the provinces under Article 144 of the constitution, and the signing of an MoU between the National Accountability Bureau and Sri Lanka’s Commission to Investigate Allegations of Bribery and Corruption to promote cooperation against bribery and illegal flow of money.
High-powered Chinese delegation to visit Pakistan soon: PM ISLAMABAD
STAFF REPORT
Prime Minister Shehbaz Sharif said Tuesday that a high-powered delegation from China would soon visit Pakistan after his “successful” trip to Beijing as the South Asian nation seeks economic support from its brotherly nation. “A high-powered Chinese delegation will be visiting Pakistan soon,” PM Shehbaz said
while briefing the federal cabinet members on his recently concluded five-day trip to China. Shedding light on his trip, the premier revealed that the Chinese side, on multiple occasions, raised their concerns. However, he reassured that the government prioritized the security issue at every step whether it be discussions at government-to-government or government-to-business or other high-level forums.
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PTI initiates move towards dialogue with govt to ease political tensions ISLAMABAD
MONITORING REPORT
Pakistan Tehreek-e-Insaf (PTI) Chairman Barrister Gohar on Tuesday announced that party founder Imran Khan has approved the initiation talks with the government. Speaking to journalists outside Adiala jail, Gohar stated, “We conveyed to the PTI founder the necessity of dialogue as the rift is growing. He concurred with us.” Gohar noted that Khan is open to dialogue, expressing willingness to reconcile and move past previous grievances. “Imran Khan has often said, ‘I am ready to forgive what happened to me,'” reiterated Gohar. When questioned about the potential role of the Supreme Court in facilitating these talks, Gohar mentioned, “The Supreme Court’s suggestion is being considered, but the decision to negotiate is PTI’s own.” He clarified that Khan did not send any formal request to the Supreme Court regarding negotiations but that the party would respond to the suggestion. Gohar also mentioned that PTI plans to initiate discussions with Pashtunkhwa Milli Awami Party (PkMAP) leader Mahmood Khan Achakzai. “We have alliances that we need to involve,” he noted. “Negotiations can also take place at the alliance level, but PTI can proceed independently as well.” He reiterated that the party has always been open to dialogue, stating, “We have never refused to negotiate. The ice is breaking. We want things to improve.” Gohar stressed that this initiative should not be seen as a compromise but as a step towards resolution. This statement comes after Imran Khan reportedly decided to soften his stance, instructing PTI leaders to engage with political entities both inside and outside Parliament to alleviate the ongoing political tension. Sources informed Geo News that PTI leadership has been directed to initiate talks with various political parties, enhancing relationships within the ruling coalition government. Gohar also revealed that the PTI founder met with lawyers and discussed being restricted from communicating with his sons. Khan’s decision follows his interaction with Chief Justice of Pakistan Qazi Faez Isa during a Supreme Court hearing on National Accountability Bureau (NAB) law amendments. CJP Isa had suggested that Khan engage with Parliament to help resolve Pakistan’s issues, emphasizing the need for the country to move forward. According to sources, Khan has authorised a three-member PTI committee to establish contact with the establishment, signifying a move towards dialogue and potential reconciliation.
SC orders closure of Monal among all eateries on Margalla Hills KARACHI
STAFF REPORT
The Supreme Court ordered on Tuesday the closure of all eateries including the famous Monal Restaurant built on Magalla Hills National Park. The court also rejected the Capital Development Authority’s (CDA) report on Islamabad’s Monal restaurant. During the hearing, Chief Justice Qazi Faez Isa mentioned that the SC had sought a report on several other restaurants. He noted that the report also mentioned the Sports Club Pak-China Center and Arts Council National Monument, which he commended as a display of the honesty of CDA officials. He then questioned whether the apex court building and the CDA office were also situated in the Margalla National Park. CJP Isa suggested that if that were the case, it would be preferable for the authority to demolish its own building. Justice Isa pointed out that the number of restaurants built alongside the Monal Restaurant was well-known worldwide, except by the CDA, which seemed unaware. In March the apex court had sought details from authorities within one month pertaining to all restaurants working in National Park.
Pakistan’s agriculture sector achieves 6.25% growth in FY2024 PROFIT
GHULAM ABBAS
Pakistan’s agriculture sector experienced significant growth in the fiscal year 2024, achieving an overall increase of 6.25 percent, according to the Economic Survey 2023-2024. The production of key crops surged by 16.82 percent, driven by substantial increases in cotton, rice, and wheat outputs. Cotton production soared by 108.2 percent, reaching 10.22 million bales compared to 4.91 million bales the previous year. Rice production increased by 34.8 percent, totaling 9.87 million tonnes, up from 7.32 million tonnes, while wheat production rose by 11.6 percent, amounting to 31.44 million tonnes from 28.16 million tonnes.
However, the production of sugarcane and maize declined by 0.4 percent and 10.4 percent, respectively, partly due to crop switching. Sugarcane production stood at 87.64 million tonnes, slightly down from 87.98 million tonnes, and maize production was 9.85 million tonnes, compared to 10.99 million tonnes. Other crops demonstrated a growth of 0.90 percent, recovering from a contraction of 0.92 percent last year. This growth was bolstered by increases in fruits (8.40 percent), vegetables (5.77 percent), and pulses (1.45 percent). Cotton ginning, which comprises 1.34 percent of the agriculture sector and 0.32 percent of GDP, saw a substantial growth of 47.23 percent, supported by the high growth in cotton production.
Key Highlights from the Economic Survey 2023-24: Livestock: Representing 60.84 percent of the agriculture sector and 14.63 percent of GDP, livestock grew by 3.89 percent, compared to 3.70 percent last year. Forestry: Contributing 2.33 percent to agriculture, forestry grew by 3.05 percent, a decrease from last year’s 16.63 percent growth. Fishing: With a sectoral share of 1.30 percent, fishing recorded a growth of 0.81 percent, up from 0.60 percent last year. Key Indicators: n Overall Agriculture Growth: 6.25 percent n Crop Sector Growth: 11.03 percent n Livestock Growth: 3.89 percent n Forestry Growth: 3.05 percent n Agriculture Credit: Increased by
33.8 percent
n Fertilizer Off-Take: 3,957 thousand tonnes
n Certified Seeds Availability: 642.5 thousand tonnes