- Pakistan's textile group exports slightly declined by 0.19% to $13.683 billion during the first 10 months of the fiscal year 2023-24. Overall exports increased by 9.10% to $25.279 billion during July-April 2023-24 compared to the same period last year.
- The All Pakistan Fruit and Vegetable Exporters Association aims to export 100,000 metric tons of mangoes this season, targeting markets like China, America, Turkey, and Japan. Climate change has impacted mango production, leading to a reduced export target compared to last year with expectations of generating $90 million in foreign exchange.
- The Meteorological Department warned of severe heatwaves across most of the country for the next 10 days, particularly in the plain areas affecting Punjab and Sindh from May 21. Temperatures are expected to be 4 to 8 degrees above normal during this period.
- Pakistan is considering seeking a 5-year extension for Chinese IPPs' $15.36 billion debt, pending consent from China. Negotiations may be lengthy. If approved, the extension could increase the debt to $16.61 billion over five years, equivalent to an increase of Rs 377 billion in rupee terms.
- Pakistan's informal economy is estimated to be around $457 billion, dwarfing the formal economy, which stood at $340 billion in 2023. This revelation came during a workshop organized by SMEDA and the ILO to develop a national action plan for formalizing SMEs.
- Fifteen EU states advocate for new measures to manage irregular migrants, including relocating some to third countries. Their unified position, outlined in a letter to the European Commission, precedes upcoming European Parliament elections amid anticipated gains for far-right anti-immigration parties.
AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS
- Pakistan Targets 100,000 Tons Mango Export: The All Pakistan Fruit and Vegetable Exporters Association aims to export 100,000 metric tons of mangoes this season, targeting markets like China, America, Turkey, and Japan. Climate change has impacted mango production, leading to a reduced export target compared to last year. This season's goal is expected to generate $90 million in foreign exchange. [BR] [Dawn] [ET]
- Pakistan's Meat Trade: Challenges & Opportunities - Pakistan's meat trade share is only 0.2%, earning $300 million annually and not ranking among the top 15 exporting industries. Despite having one of the world's largest livestock populations, Pakistan faces challenges due to the lack of traceability systems for cattle stock, hindering compliance with international standards and limiting access to global markets. [BR]
- Pakistan Pharma Sector Aims for $3B Exports: Pakistan’s pharmaceutical sector could reach $3 billion in exports over five years with policy support and a favorable business environment. Increasing exports is vital for non-debt foreign exchange inflow, especially compared to India's projected $28 billion in pharmaceutical exports for 2023-24, while Pakistan's highest was $713 million in 2022-23. [BR]
- Pakistan's Textile Exports Dip, Overall Exports Rise: Pakistan's textile group exports slightly declined by 0.19% to $13.683 billion during the first 10 months of the fiscal year 2023-24, according to the Pakistan Bureau of Statistics (PBS). However, overall exports increased by 9.10% to $25.279 billion during July-April 2023-24 compared to the same period last year. In April 2024, textile exports rose by 0.37% to $1.237 billion year-on-year. [BR] [Dawn]
- Punjab Farmer Package Criticized by Jamaat-i-Islami: Jamaat-i-Islami leader criticizes Punjab government's farmer package, alleging double standards. He questions the discrepancy between wheat procurement refusal and Rs 400 billion package announcement, expressing concerns about potential corruption. [Dawn]
- Tea Import: Rs 14.5 billion was the import value of tea in April 2024, up 55.9% compared to Rs 9.32 billion in April 2023, according to the PBS. [ET]
- Cotton Yarn Export: Rs 15.05 billion was the export value of cotton yarn in April 2024, down 17.14% compared to Rs 18.16 billion in April 2023, according to the PBS. [ET]
ENERGY - WEATHER, WATER & POWER
- Severe Heatwaves Expected, Rains in Northern Areas: The Meteorological Department warned of severe heatwaves across most of the country for the next 10 days, particularly affecting Punjab and Sindh from May 21. Temperatures are expected to be 4 to 8 degrees above normal during this period. Additionally, dust storms, thunderstorms, and heavy rains are forecasted for northern areas. [Dawn]
- OGRA Approves PSO's Fuel Price Adjustment: OGRA has approved Pakistan State Oil's request for an exchange rate adjustment, with an increase of Rs 1.43 per liter on high-speed diesel and 32 paisa per liter on petrol for May 16-31. PSO's adjustment for the second half of May contrasts with a previous negative adjustment, resulting in differences of Rs 1.55 per liter on HSD and 45 paisa per liter on petrol. [BR]
- Government Mulls Carbon Tax for Petroleum Products: The government is considering implementing a carbon tax on petroleum and related products as part of broader tax reforms urged by the IMF for better VAT implementation. This move aims to align with climate investment standards and attract international financial support for green initiatives and aid instruments. [Dawn]
- Pakistan Eyes 5-Year Extension for Chinese IPP Debt: Pakistan is considering seeking a 5-year extension for Chinese IPPs' $15.36 billion debt, pending consent from China. Negotiations may be lengthy. One proposal involves reducing consumer tariffs to alleviate the debt burden. If approved, the extension could increase the debt to $16.61 billion over five years, equivalent to an increase of Rs 377 billion in rupee terms. [The News]
- PIA Sale Deadline Unlikely Extended: Official - The deadline for expressing interest in buying PIA is unlikely to be extended further, according to a Privatization Commission official. Previously extended by two weeks to May 17 by the Federal Minister for Privatization, Abdul Aleem Khan, due to reported interest from local and international companies. [BR]
- Govt Eyes Thar Coal Conversion for CPEC Plants: The government plans to convert three coal plants using imported coal to Thar coal, with Minister Ahsan Iqbal tasked with engaging China's NDRC leadership for this conversion, following his recent visit to China. These plants include Sahiwal, Port Qasim, and Hub, part of the CPEC imported coal projects. [BR]
- Sindh Govt Integrates BRT Lines, Announces Fare Cards: The Sindh government integrated the BRT Green and Orange lines to increase ridership, with Transport Minister Sharjeel Inam Memon inaugurating the system. Plans for automatic fare payment cards for the Orange Line were also announced, reflecting the vision of President Asif Ali Zardari and Chairman PPP Bilawal Bhutto-Zardari for Karachi. [Dawn] [ET]
- PM Orders Probe into Hydropower Project Fault: Prime Minister Shehbaz Sharif ordered an urgent investigation into the technical fault at the Neelum-Jhelum Hydropower Project during his visit to Azad Jammu and Kashmir. The project's electricity generation was suspended due to issues with the Head Race Tunnel. He also expressed satisfaction over resolving issues that led to recent protests in the region. [Dawn] [ET]
- Sindh Irrigation: Flow to Improve, Methodology Dispute - Water flows in Sindh's irrigation channels are expected to improve within a week, but officials are skeptical about their reliability. The Indus River System Authority (Irsa) announced a change in water distribution methodology, using para-2 of the Water Apportionment Accord of 1991 instead of the three-tier formula, which Sindh disputes. The matter is currently awaiting adjudication by the Council of Common Interests (CCI). [Dawn]
PAKISTAN - ECONOMICS, POLITICS & SECURITY
- Imran Khan's Silent Court Appearance Continues: Imran Khan appeared bored during a recent Supreme Court hearing via video link, where he didn't speak. Despite this, the arrangement for his virtual appearance will continue, giving him potential future opportunities to share his concerns. The next hearing date will be announced later, with Chief Justice Qazi Faez Isa ordering the continuation of the virtual linking arrangement for Imran Khan from Adiala jail. [Dawn]
- China Reaffirms Support for Pakistan, CPEC: China reiterated support for Pakistan's sovereignty and efforts against terrorism. Both nations urge global cooperation on counter-terrorism and reject double standards. The federal cabinet directed the Finance Ministry to clear dividends owed to Chinese firms and ensure no taxes in CPEC Special Economic Zones, withdrawing any if imposed. [The News] [BR]
- Pakistan's Debt Dynamics: Sept. 2023 Snapshot - As of September 2023, Pakistan's external debt hit $86.36 billion, while domestic debt was at Rs 39.7 trillion. Domestic sources covered 58% of federal fiscal deficit financing, with external sources at 42%. The government retired Rs 452 billion of short-term debt and issued Rs 2.2 trillion of Pakistan Investment Bonds, alongside Rs 657 billion of Ijarah Sukuks. [BR]
- Govt to End Tax Exemptions for Former FATA, PATA: Federal Finance Minister Senator Muhammad Aurangzeb clarified that the government has no plans to extend tax and duty exemptions for former FATA and PATA regions. He highlighted the need for equal treatment across all chambers of commerce nationwide and noted that the exemptions in these areas will expire on June 30, 2024. [BR]
- Finance Division Highlights Fiscal Challenges in 2023: The Finance Division noted in the Fiscal Policy Statement-January 2024 that in fiscal year 2022-23, government borrowing costs and mark-up payments rose due to a policy rate increase to tackle inflation. They also mentioned challenges such as the international commodity super-cycle, balance of payments crisis, and the 2022 floods, which exacerbated macroeconomic vulnerabilities. [BR]
- Pakistan's Forex Reserves Reach $9.13 Billion: As of May 10, Pakistan's State Bank saw a $15 million weekly rise in foreign exchange reserves to $9.13 billion, while total liquid foreign reserves stood at $14.62 billion. Commercial banks held net foreign reserves of $5.49 billion. Last week's increase to above $9 billion followed the receipt of the final $1.1 billion tranche from the IMF for its $3 billion Stand-By Arrangement. [BR] [Dawn]
- Pakistan's Informal Economy Dominates: Workshop - Pakistan's informal economy is estimated to be around $457 billion, dwarfing the formal economy, which stood at $340 billion in 2023. This revelation came during a workshop organized by SMEDA and the ILO to develop a national action plan for formalizing SMEs. The study highlights the significant scale of informality in Pakistan. [ET]
INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT
- Arab League Urges UN Peacekeepers in Palestine: The Arab League urges the deployment of a UN peacekeeping force in Palestinian territories amid Israel's promise to escalate its ground offensive in Rafah. The 22-member group advocates for international protection until a two-state solution is realized and supports a UN-led conference to address the Palestinian issue. [Dawn]
- Xi Jinping, Vladimir Putin Strengthen Alliance in Beijing: Xi Jinping and Vladimir Putin emphasized their nations' alliance during their meeting in Beijing, highlighting China's support for Russia amid Western sanctions over Ukraine. Putin's visit, his first trip abroad since reelection, underscores the importance of China as an economic partner. Xi welcomed Putin at a grand ceremony outside Beijing's Great Hall of the People. [Dawn] [ET]
- Azerbaijan, Armenia Reach Border Agreement: Azerbaijan and Armenia announced on Thursday an agreement over disputed sections of their shared border, brokered between the two former Soviet republics. The deal involves the return of four border villages to Azerbaijan, previously seized by Armenia in the 1990s. Both nations express hopes for a comprehensive peace agreement. [ET] [WE News]
- ECB Cautions on Geopolitical Risks to Euro Stability: The European Central Bank (ECB) highlighted geopolitical tensions and policy uncertainty as risks to euro area financial stability amidst global election cycles. While conditions have improved since its last assessment, ECB vice-president Luis de Guindos noted reduced concerns about a deep recession and rising unemployment compared to six months ago. [BR]
- EU States Seek Migrant Measures Before Elections: Fifteen EU states advocate for new measures to manage irregular migrants, including relocating some to third countries. Their unified position, outlined in a letter to the European Commission, precedes upcoming European Parliament elections amid anticipated gains for far-right anti-immigration parties. [Dawn]
- Oil Futures Rise on Positive Economic Indicators: Oil futures climbed on Thursday, driven by a steadying US job market and lower-than-anticipated inflation figures, boosting expectations for Federal Reserve interest rate cuts in the autumn. Brent crude futures rose by 50 cents to $83.25 a barrel, while US West Texas Intermediate crude (WTI) increased by 62 cents to $79.25, as of 11:06 a.m. EDT (1506 GMT). [BR]
- Opinion: The Unending Circular Debt Saga - “The power sector has continued to bleed as the circular debt pile swells without any check. Though successive governments have attempted to find workable solutions, success has eluded them for years. The Pakistan Tehreek-e-Insaf (PTI) government, which remained in power from August 2018 to April 2022, left unsettled Rs 1.6 trillion in circular debt. The debt accumulated to Rs 3.3 trillion during the government of Pakistan Democratic Movement (PDM) – a coalition of big and small political parties – which came to power after the PTI administration stepped down. ” - By Zafar Bhutta [ET]
- Opinion: Innovation for Agriculture - “Pakistan’s agricultural sector is not just a segment of the economy; it is the lifeblood that sustains the country`s populace and fuels its economic engine. With over 37 per cent of the labour force employed in it and its contribution of approximately 46pc to GDP both directly and indirectly estimated by employing backward and forward linkages between agriculture and other sectors of the economy, agriculture`s significance cannot be overstated. It is a pivotal source of foreign exchange earnings, with a substantial delta as high as $15 billion in our current account, underscoring its role as a cornerstone of Pakistan`s financial stability.” - By Zafar Masud [Dawn]
