Issue 37

Budget Study Centre   Issue 37
April 04, 2019


Fortnightly Budget News Alerts

ADB forecasts grim outlook for Pakistan economy

The Nation (April 04, 2019)

ISLAMABAD   –   The Asian Development Bank (ADB) Wednesday forecasted that Pakistan’s GDP growth would decelerate to 3.9 percent during current fiscal year (FY2019) as macroeconomic challenges continue. “GDP growth is forecast to decelerate further to 3.9% in FY2019 as macroeconomic challenges continue and despite steps to tighten fiscal and monetary policies to rein in high and unsustainable twin deficits,” the ADB noted in its recent… Read More

KP CM for ensuring 100 pc utilization of development budget

Pakistan Today (Apr 04, 2019)

PESHAWAR: Khyber Pakhtunkhwa (KP) Chief Minister (CM) Mahmood Khan here on Thursday directed all departments to ensure 100pc utilisation of developmental budget with a focus on the provision of quality services to people. The Chief Minister further directed all the departments to surrender unutilized budget by April 15 and additional and supplementary grant should be released after his consultation… Read More

Pakistan’s GDP expected to slow down to 3.9pc: ADB report

Dawn News (Apr 03, 2019)

Pakistan will continue to face macroeconomic challenges despite steps to tighten fiscal and monetary policies to rein in high and unsustainable twin deficits, and in this backdrop, the country’s GDP is forecast to decelerate to 3.9 per cent in fiscal year 2019, says the Asian Development Bank (ADB) in a new report released on Wednesday. The report forecasts that continued fiscal consolidation (reduction in underlying fiscal deficit) in FY-2020 will keep growth subdued at 3.6pcRead More

Influence of elite is a big problem for Pakistan’s economy

Sama TV (Apr 03, 2019)

One of the biggest problems for Pakistan’s economy is the influence of the elite, says Finance Minister Asad Umar. He expressed the belief that this influence can be reduced if not finished. The finance minister was speaking at a pre-budget seminar held in Islamabad on Tuesday. The withholding tax net has increased, he said, adding that many of the 41 barriers to trade have been finished. The property sector needs reforms, he said, adding that withholding tax for non-filers in the bankingRead More

Budget 2019: Government’s tax relief will make a big difference to Indian community (Apr 02, 2019)

In his first Budget speech, Federal Treasurer Josh Frydenberg has handed down a pre-election budget for the Coalition government with a budget surplus of 7.1 billion dollars for 2019/20 and announced more tax relief for low and middle-income earners. “As part of our plan for a stronger economy, we will provide tax relief to Australian taxpayers with immediate relief for low- and middle-income earners,” Minister Frydenberg told Parliament. “The Government will provide…Read More

Budget 2019-20 likely to be presented in Parliament on May 24: Finance Minister

Sama Tv (Apr 01, 2019)

The federal government is likely to present a new budget for the fiscal year 2019-20 in the National Assembly and Senate on May 24,  Finance Minister Asad Umar told the media in Islamabad on Monday. “Earlier, May 17 was proposed for the presentation of the new budget, but now May 24 is under consideration and a decision will soon be taken in consultation with the National Assembly speaker,” he said…Read More

Pakistan diverts CPEC corridor funds: China ties under pressure

Economic Times (Apr 01, 2019)

NEW DELHI: A controversy has erupted over the China-Pakistan Economic Corridor (CPEC) ahead of the second Belt and Road Initiative (BRI) summit in Beijing following allegations that the Pakistani government has diverted Rs 2,400 crore (around $171.6 million) meant for joint infrastructure development projects with China under BRI to other projects. China had given the money as part of the $62-billion infrastructure funding to build the CPEC. However, Pakistan’s… Read More

CPEC’s effects on Pakistan’s economy analysed

The News (Mar 31, 2019)

The China-Pakistan Economic Corridor (CPEC) will have a positive effect on Pakistan but certainly not a transformative one. These views were expressed by Dr Matthew McCartney, associate professor of political economy and human development in South Asia, Oxford School of Global and Area Studies, University of Oxford, UK, while addressing the members of the Pakistan Institute of International Affairs (PIIA) and the media on Saturday evening…Read More

A stabilizing economy; Reversing the damage

The News (Mar 31, 2019)

A little more than 200 days have passed since the PTI took over reins of the country in the midst of the worst economic crisis. It inherited multiple deficits that were allowed to surpass levels that are enough to run any economy to the ground. This article broadly lays out the significant progress on the economic stabilisation front in the first 200 days of PTI’s government and the direction that economic policy will take in the coming days. A country like Pakistan needs an adequate… Read More

Massive drop in foreign assistance, only $2.94bn received in July-Feb

Dawn News (Mar 30, 2019)

ISLAMABAD: Pakistan received a paltry $2.94 billion of budgeted foreign assistance in first eight months (July-February) of the current fiscal year, showing a massive decline of over 61pc over last year. This was despite the fact that Pakistan needed significantly higher inflows to finance a large current account deficit. Resultantly, the government had to mostly bank on short-term deposits and commercial loans worth more than $9bn from bilateral sources — Saudi Arabia, United …Read More

Government’s projected indicators

Business Recorder (Mar 30, 2019)

According to a Business Recorder exclusive, the government’s projected macroeconomic indicators for the current year shared with the International Monetary Fund (IMF) include: (i) growth rate of 3.7 percent (Planning Ministry had earlier showed a growth rate of 4.2 percent and downgraded it to 4 percent in February this year though the SBP second quarterly report projected a rate of 3.5 to 4 percent); (ii) budget deficit at 5.6 percent of GDP (Fitch rating agency projected a …Read More

Budget 2019-20: Essential reforms

Business Recorder (Mar 29, 2019)

In this article, we are presenting some fundamental institutional/ structural reforms in tax system prior to announcement of budget 2019-20. For the last many decades, the main emphasis of every budget has been meaningless and cumbersome changes in the existing outdated, oppressive and anti-growth tax system, which itself is the root cause of major fiscal ills. It is strange and shocking that we want to reform a system that needs to be dismantled in entirety and should be… Read More

Finance minister to chair 9th NFC Award meeting today

The News (Mar 29, 2019)

LAHORE: Finance Minister Asad Umar will chair the fifth meeting of 9th National Finance Commission Award here today (Friday) which will be attended by the finance ministers of all the four provinces, and their nominated non-statutory members including Dr Salman Shah, Dr Asad Saeed, Musharraf Rasul, Mehfooz Ali Khan and other officials concerned including FBR chairman to brief about the performance of the six working groups constituted for …Read More

Govt spending massively up, subsidies down in last FY

The Nation (Mar 28, 2019)

ISLAMABAD – The federal and four provincial governments massively slashed the subsidies by over 35 percent in last fiscal year 2017-18. The federal and provincials governments of the country had paid Rs260 billion as subsidies during the year 2017-18 as against Rs403 billion in preceding year showing reduction of over 35 percent. Pakistan’s budget deficit had ballooned to highest ever level of Rs2.26 trillion during last fiscal year despite slashing the subsidies massively…Read More

What Sri Lanka’s 2019 Budget Tells Us About Its Economic Health

The Diplomat (Mar 27, 2019)

Following one of the most dramatic political crises in the recent history of South Asia, Sri Lanka’s government budget for 2019 was approved by the majority of the parliament on March 12. The 2019 budget was supposed to be presented to the parliament in November 2018, but President Maithripala Sirisena’s unexpected (and later overturned) decision to change prime ministers in October 2018 pushed back the budget. Later, a Vote of Account was… Read More

Shujaat calls for APC on economy

Pakistan Today (Mar 26, 2019)

Pakistan Muslim League-Quaid (PML-Q) President Chaudhry Shujaat Hussain on Tuesday underscored the need for an all parties conference to boost economy. Talking to journalists, Shujaat said that the prevailing political situation was harmful for economic stability. Referring to the train march of Pakistan People’s Party, he said that some elements were giving preference to personnel interests over national interests. The PML-Q said that nothing would… Read More

Pakistan eyes package as IMF mission chief arrives today

Dawn News (Mar 26, 2019)

ISLAMABAD: As the arrival of $2.1 billion Chinese loans jacked up Pakistan’s total foreign exchange reserves to $17.58bn — highest since April 2018 — the government is expecting finalisation of a bailout package with the International Monetary Fund (IMF) in four-six weeks to form the basis for next year budget. IMF’s new mission chief for Pakistan Ernesto Ramirez Rigo is set to touch base with Finance Minister Asad Umar and senior officials of his ministry on Tuesday over authorities’… Read More

Macro-economic stabilization steps start yielding: SBP report

The News  (Mar 25, 2019)

KARACHI: State Bank of Pakistan (SBP) on Monday released its second quarterly Report on “The State of Pakistan’s Economy for fiscal year 2018-19,” which stated the effects of macroeconomic stabilization measures taken since December 2017 have started to unfold as the economy moved into the second quarter of fiscal year 2018-19. More specifically, monetary tightening along with exchange rate adjustments, reduction in development expenditures of the federal… Read More

EU, Pakistan agree on new engagement plan for trade, economy

The Geo Tv (Mar 25, 2019)

ISLAMABAD: Pakistan and the European Union (EU) on Monday agreed to a new strategic engagement plan for building a sturdy partnership in the fields of defence, trade, democracy, governance and human rights. The agreement to this effect was reached during the fourth round of a strategic dialogue between Pakistan and the European Union here. Foreign Minister Shah Mahmood Qureshi led the Pakistani side, while EU Representative for Foreign Affairs and…Read More

China finance minister says balancing budget revenue and spending difficult this year

The Reuters (Mar 24, 2019)

BEIJING (Reuters) – China’s Finance Minister, Liu Kun, said on Sunday it will be difficult for the government to balance its budget revenue and spending this year due to various tax and fee cuts planned this year to support growth. Liu, speaking at the China Development Forum, said the government is still able to balance its budget overall through a variety of means, adding that general central government spending will be cut by more than 10 percent this year…Read More

To fix the economy, start with the power sector

Dawn News (Mar 24, 2019)

From time to time Dawn invites people with stakes or expertise in any area of the economy to contribute their thoughts on issues of pressing concern. Today we invite Dr Kamal Munir, a professor of strategy & policy at the University of Cambridge and Salman Khalid, an emerging markets investment professional and a former Fulbright Scholar, to reflect on the rising costs of power in Pakistan…Read More

‘Pakistan can become economic leader’

The Express Tribune (Mar 23, 2019)

LAHORE: Pakistan should aim for achieving top position in the international ranking for ease of doing business instead of considering jumping just a few notches. It was stated by Lahore Chamber of Commerce and Industry President Almas Hyder while briefing a three-member World Bank delegation, led by Lars Grava. During the meeting, textile, information technology, agro-business and other sectors of the economy came under discussion. Hyder added that Pakistan…Read More

Declining investment-to-GDP ratio

Business Recorder (Mar 23, 2019)

A World Bank report titled “Pakistan@100 Growth and Investment” maintains that Pakistan’s low public and private investment will place it at a disadvantage to peer countries. The investment-to-GDP ratio in Sri Lanka, Bangladesh, Thailand, Cambodia and India has been continuously higher than in Pakistan for the past 10 years; savings in Pakistan at present are 13.8 percent of GDP with an investment at 15 percent of GDP and in contrast, Sri Lanka’s savings…Read More

Pakistan to receive $2.1 billion loan from China by March 25

The Khaleej Times (Mar 22, 2019)

Cash-strapped Pakistan will receive over $2 billion loan from China by Monday to provide a boost to its ailing economy, the Finance Ministry has announced. Ministry’s adviser and spokesperson Khaqan Najeeb Khan said that “all procedural formalities” for the transfer of $2.1 billion (15 billion yuan) loan being provided by the Chinese government have been completed, and “the funds will be deposited in the State Bank of Pakistan’s account by Monday, March 25”, the…Read More

Murad says provinces face financial crises due to poor state of national economy

Dawn News (Mar 09, 2019)

JAMSHORO: Sindh Chief Min-is¬ter Syed Murad Ali Shah has said that provinces face severe crisis due to poor state of national economy as federal government has thus far failed miserably to improve conditions. The government should work harder to bolster economy and scale up tax collection instead of launching scathing attacks on others and issuing boastful statements, said Mr Shah while talking to media persons after graduation ceremony at the US-Pakistan Centre for…Read More

CPEC likely to contribute 3.5%to Pakistan’s GDP

The Express Tribune (Mar 22, 2019)

KARACHI: China’s investment of over $60 billion in Pakistan’s infrastructure and power projects under the China-Pakistan Economic Corridor (CPEC) is expected to increase Pakistan’s economic growth by around 3.5 percentage points, said Standard Chartered Bank (Pakistan) CEO Shahzad Dada on Thursday. “CPEC projects are estimated to contribute around 3.5 percentage points to Pakistan’s GDP (gross domestic product) growth once they are fully delivered,” he… Read More