Islamabad [Pakistan], March 4 ,2023: Cash-Strapped Pakistan sees a ray of hope as the Industrial and Commercial Bank of China (ICBC) approved the rollover of USD 1.3 billion facilities.
Taking to Twitter, Pakistan Finance Minister Ishaq Dar announced, “Formalities completed [and] Chinese Bank, ICBC approved rollover of USD 1.3 billion facilities which has been repaid by Pakistan to ICBC in recent months.”
He further said that the facility would be disbursed in three installments, the first one of USD 500 million has been received by the State Bank of Pakistan and added “It will increase forex reserves!”
Pakistan is currently facing growing economic challenges, with high inflation, sliding forex reserves, a widening current account deficit and a depreciating currency, reported Geo News.
Foreign exchange reserves were at USD 3.8 billion as of February 24, just enough for less than a month of imports. While the liquid foreign exchange reserves stand at around USD 9 billion which includes USD 5.5 billion in net reserves held by commercial banks.
Hours before his announcement, the finance minister revealed that China has renewed a facility under which Pakistan expected an additional inflow of USD 500 million in the “next few days”.
Highlighting the Pakistan Democratic Movement (PDM)-led government’s economic achievements, Dar said that the foreign exchange reserves held by the SBP climbed to USD 3.8 billion from USD 2.8 billion — recorded last month. He maintained that the government returned USD 6.5 billion of foreign debt during the current fiscal year, according to Geo News.
Meanwhile, on Wednesday, the Pakistan Bureau of Statistics said that the monthly inflation, measured by a basket of products called the Consumer Price Index (CPI), jumped to 31.6 per cent in February year-on-year.
Last month, prices rose at the fastest pace ever in the country’s history, according to available data, with food, beverage and transport costs driving inflation to a point where analysts fear “families will have to make choices and sacrifices,” reported the Dawn.
This was the highest annual rate since available data, i.e. July 1965, according to the research firm Arif Habib Ltd, and is also expected to rise even further in the coming months.
Inflation surpassed 30pc last month after having stayed above 20pc for eight months from June to January. Inflation was 12.2pc in February last year, reported Dawn.
Union Finance Minister Nirmala Sitharaman presented the Union Budget for the fiscal year 2023-24 on Wednesday.
This is the 11th annual budget of Prime Minister Narendra Modi-led central government, and the fifth for Sitharaman as Finance Minister.
The new budget includes a few significant decisions amid a series of economic challenges, especially the steep inflation.
Here’s more on the Budget for 2023.
Key announcements by Sitharaman
For the fiscal year (FY) 2023, growth has been estimated at 7%.
Sitharaman also announced spending Rs. 2,200 crore for the horticulture sector.
The agricultural credit target has also been increased to Rs. 20 lakh crore.
She also proposed a capital expenditure of Rs. 10 lakh crore for the next FY.
The outlay for the Pradhan Mantri Awas Yojna will be Rs. 79,000 crore.
Government to bear Rs. 2 lakh crore under foodgrain scheme
According to the finance minister, the entire expenditure of about Rs. 2 lakh crore under PM Garib Kalyan Anna Yojana will be borne by the central government under new budget outlays.
She said the free food grain scheme has already been implemented in the country.
Sitharaman added that the scheme would be a top priority for the government next year as well.
Big boost to the investment sector
Sitharaman said the capital investment outlay would be increased by 33% to Rs. 10 lakh crore (3.3% of GDP).
The provision for interest-free 50-year loans to state governments had been extended for another year.
She said this would be done with an increased budget of Rs. 1.3 lakh crore to encourage infrastructure investment and to reward complementary policy initiatives.
Railway outlay increased nine times since 2013-14
Railway outlay is now at Rs. 2.40 lakh crore, as per the finance minister. She announced that the total outlay for the Indian Railway budget will be Rs 2.40 lakh crore, which is nine times more than the total outlay in 2013-14.
Green energy comes under priority sector
Sitharaman said the government will focus on green energy in the next fiscal year.
She said green hydrogen, clean energy storage, and transmission are the key drivers of the government’s “Green Growth” priority sector.
She announced the inter-state transmission system of 13 GW of renewable energy from Ladakh with an investment of Rs. 20,700 crore including Central support of Rs. 8,300 crore.
ICMR labs, 157 new nursing colleges announced
According to Sitharaman, the country would get 157 new nursing colleges and additional Indian Council for Medical Research (ICMR) labs to get more trained nurses as well as boost research and innovation.
She said a mission to eliminate sickle cell anemia by 2047 would be launched soon. It will include raising awareness and universal screening of seven crore individuals in afflicted areas, she noted.
Major relief under new income tax regime
The government announced significant changes in the new tax regime and extended rebates on income up to Rs. 7 lakhs.
The tax slabs have been made more flexible under the new tax regime.
The new tax rates are 0-Rs. 3 lakh (nil), Rs. 3-6. lakh (5%), Rs. 6-9 lakh (10%), Rs. 9-12 lakh (15%), Rs. 12-15 lakh (20%) and above 15 lakh (30%).
Fiscal deficit cut significantly
The fiscal deficit target for FY24 has been cut from 6.4% of GDP to 5.9%. “I reiterate my intention to bring the fiscal deficit below 4.5 percent of GDP by 2025-26,” the finance minister said.
Jan 16,22:The world’s top 1 percent grabbed nearly two-thirds of the $42 trillion in new wealth created since 2020, Oxfam says in a new report released to coincide with the annual meeting of the World Economic Forum in Davos, Switzerland.
The share was almost twice as much money as the amount obtained by the bottom 99 percent of the world’s population, according to Oxfam’s “Survival of the Richest” report released on Monday.
Billionaire fortunes are increasing by $2.7bn a day, while at least 1.7 billion workers now live in countries where inflation is outpacing wages, the report said.
At the same time, half of the world’s billionaires live in countries with no inheritance tax for direct descendants, Oxfam said, putting them on track to pass on $5 trillion to their heirs, more than the gross domestic product (GDP) of Africa.
Oxfam said a 5 percent tax on the world’s multi-millionaires and billionaires could raise $1.7 trillion a year, enough to lift 2 billion people out of poverty.
“While ordinary people are making daily sacrifices on essentials like food, the super-rich have outdone even their wildest dreams. Just two years in, this decade is shaping up to be the best yet for billionaires — a roaring ‘20s boom for the world’s richest,” said Gabriela Bucher, executive director of Oxfam International.
“Taxing the super-rich and big corporations is the door out of today’s overlapping crises. It’s time we demolish the convenient myth that tax cuts for the richest result in their wealth somehow ‘trickling down’ to everyone else. Forty years of tax cuts for the super-rich have shown that a rising tide doesn’t lift all ships — just the superyachts.”
The annual meeting of the World Economic Forum in Davos, Switzerland, brings together global business and political leaders to discuss political and economic issues of global concern.
The summit, which takes place from Monday to Friday, will be attended by 52 heads of state and nearly 600 CEOs.
Sept 15,2022:French Finance Minister Bruno Le Maire said on Wednesday that the economy was not facing recession after the government lowered its economic outlook for 2023.
Le Maire also told CNews television that 2022 economic growh was being revised up to 2.7 per cent from 2.5 per cent.
Sept 03,2022:India has surpassed the United Kingdom to become the fifth largest economy in the world, Bloomberg reported on Friday. India overtook the UK in the final three months of 2021 to become the fifth-largest economy, pushing the UK to the sixth spot for the second time after it had done the same in 2019.
According to the report, the size of the Indian economy in ‘nominal’ cash terms in the quarter through March was $854.7 billion while the UK was $816 billion. This was an adjusted basis and using the dollar exchange rate on the last day of the relevant quarter.
The report comes just two days after the government put out the GDP data for the first quarter according to which the Indian economy grew at 13.5 per cent year-on-year. While this number was little lower than what the RBI had forecast, the growth rate was still highest among the developing countries. India is projected to grow at about 7 per cent this fiscal.
July 03,2022:Argentina’s Economy Minister Martin Guzman, the architect of a recent debt deal with the International Monetary Fund (IMF), has resigned.
Guzman’s announcement on Saturday came amid deep splits in the ruling coalition about how to handle Argentina’s mounting economic crisis.
A minister since late 2019 and close ally of President Alberto Fernandez, the 39-year-old Guzman did not say why he resigned.
But in a seven-page letter posted on Twitter, he suggested the internal battles were at least part of his reason for leaving, calling on Fernandez to mend the divisions so that the “next minister does not suffer” the same difficulties he did.
Guzman, who had clashed with Vice President Cristina Fernandez de Kirchner, a powerful two-term former president, said he maintained “confidence in my vision of the path Argentina should follow”.
The former minister was the driving force in sealing a new $44bn deal with the IMF earlier this year to replace a failed programme from 2018.
But legislators allied with the vice president, who has called for greater spending to alleviate poverty levels, voted against the agreement with the IMF and the deal only passed Congress thanks to support from the centre-right opposition.
Suman Bery
According to a statement issued by the Department of Personnel and Training, the Appointments Committee of the Cabinet has accepted the resignation of Rajiv Kumar and will relieve him from his post on April 30.
It also said that Bery has been appointed, with immediate effect, as a full-time member of NITI Aayog on the same terms and conditions as are applicable to the position, and will take over as Vice Chairperson on May 1.
Rajiv Kumar was the government think-tank’s Vice Chairperson since September 2017.
Bery has served in the Economic Advisory Council to the Prime Minister and the National Statistical Commission, as well as being Director General of the National Council of Applied Economic Research (NCAER), New Delhi. He also had a stint in the World Bank.