Latest news with #Pakistan-IMF
Business Recorder
2 days ago
- Business
- Business Recorder
PSMA urges Pakistan govt to deregulate sugar industry
LAHORE: The Pakistan Sugar Mills Association (PSMA) has urged the government to completely deregulate the industry. In a statement, a spokesman for the PSMA said the Association made this request during a general body meeting held today. It requested the federal government to consider deregulating the sugar sector, as has already been done by the provinces in the case of sugarcane. It said the sugar industry is the second largest agro-based industry in Pakistan after textiles. During the crushing season, it generates direct and indirect business activity worth Rs. 1,000 billion in agriculture, transport, allied industries, wholesale, and retail markets. It pays approximately Rs. 225 billion in direct and indirect taxes to federal, provincial, and local governments, and provides $4 billion worth of import substitution to the national economy. Pakistan-IMF talks on tax-free sugar import underway The industry utilizes indigenous energy by using bagasse, through which an allied steel industry has also been established. The generated power is exported to the national grid as well. With conducive policy interventions, an industrial chain using by-products of sugarcane could emerge, as has happened in many other countries. The use of ethanol in vehicles as fuel—similar to Brazil and India—could strengthen our national energy mix, which is heavily dependent on imported petroleum products. The Ethanol Blending Policy, formulated in Pakistan in 2009 and later discontinued, needs to be revived. The current potential of bio-ethanol is sufficient to replace 7% of the country's total gasoline consumption. Two very important agro-based sectors— rice and maize— are already deregulated, with rice exports alone fetching nearly $5 billion. There are no restrictions on the import and export of rice and maize in Pakistan. Both sectors operate on free-market principles and are functioning efficiently. Rice and maize growers receive international prices, which has encouraged investment in research and development, resulting in improved yields. In contrast, scant efforts have been made in Pakistan to develop new sugarcane varieties for improving yield and sucrose recovery. The government should adopt a permanent policy for the deregulation of the sugar sector so that it can continue contributing to the national economy through import substitution, increased business activity, employment generation, tax revenue, and substantial foreign exchange earnings from regular exports of surplus sugar. The sugar industry has advocated for deregulation in several meetings with the government, including the most recent Sugar Advisory Board meeting held on July 17, 2025. The formation of a committee by the federal government on the deregulation of the sugar sector is a welcome step, and it is hoped that—like other agricultural sectors—the sugar industry will be given the opportunity to realize its full potential for national development. Copyright Business Recorder, 2025
Business Recorder
2 days ago
- Business
- Business Recorder
PSMA urges govt to deregulate sugar industry
LAHORE: The Pakistan Sugar Mills Association (PSMA) has urged the government to completely deregulate the industry. In a statement, a spokesman for the PSMA said the Association made this request during a general body meeting held today. It requested the federal government to consider deregulating the sugar sector, as has already been done by the provinces in the case of sugarcane. It said the sugar industry is the second largest agro-based industry in Pakistan after textiles. During the crushing season, it generates direct and indirect business activity worth Rs. 1,000 billion in agriculture, transport, allied industries, wholesale, and retail markets. It pays approximately Rs. 225 billion in direct and indirect taxes to federal, provincial, and local governments, and provides $4 billion worth of import substitution to the national economy. Pakistan-IMF talks on tax-free sugar import underway The industry utilizes indigenous energy by using bagasse, through which an allied steel industry has also been established. The generated power is exported to the national grid as well. With conducive policy interventions, an industrial chain using by-products of sugarcane could emerge, as has happened in many other countries. The use of ethanol in vehicles as fuel—similar to Brazil and India—could strengthen our national energy mix, which is heavily dependent on imported petroleum products. The Ethanol Blending Policy, formulated in Pakistan in 2009 and later discontinued, needs to be revived. The current potential of bio-ethanol is sufficient to replace 7% of the country's total gasoline consumption. Two very important agro-based sectors— rice and maize— are already deregulated, with rice exports alone fetching nearly $5 billion. There are no restrictions on the import and export of rice and maize in Pakistan. Both sectors operate on free-market principles and are functioning efficiently. Rice and maize growers receive international prices, which has encouraged investment in research and development, resulting in improved yields. In contrast, scant efforts have been made in Pakistan to develop new sugarcane varieties for improving yield and sucrose recovery. The government should adopt a permanent policy for the deregulation of the sugar sector so that it can continue contributing to the national economy through import substitution, increased business activity, employment generation, tax revenue, and substantial foreign exchange earnings from regular exports of surplus sugar. The sugar industry has advocated for deregulation in several meetings with the government, including the most recent Sugar Advisory Board meeting held on July 17, 2025. The formation of a committee by the federal government on the deregulation of the sugar sector is a welcome step, and it is hoped that—like other agricultural sectors—the sugar industry will be given the opportunity to realize its full potential for national development. Copyright Business Recorder, 2025
Express Tribune
12-03-2025
- Business
- Express Tribune
Stocks fall on policy rate status quo
Listen to article Pakistan Stock Exchange (PSX) on Tuesday closed modestly lower by 179 points, which analysts attributed to thin trade and investor caution following the State Bank of Pakistan's (SBP) decision to keep policy rate on hold amid inflationary pressures, price volatility and external account challenges. Despite a surge in the latter half fuelled by robust remittances, global equity sell-off, a weak rupee and uncertainty surrounding the International Monetary Fund (IMF) review dampened investor sentiment. According to Ahsan Mehanti of Arif Habib Corp, stocks closed lower amid thin trade after the SBP maintained the status quo in its key policy rate owing to the persistent core inflation, price volatility and external account pressures. He said that late-session support emerged in the wake of upbeat data showing $3.1 billion in remittances, a surge of 40% year-on-year in February 2025. Global equity sell-off on US recession worries, a weak rupee and uncertainty about the outcome of Pakistan-IMF talks played the role of catalysts in bearish close at the PSX, Mehanti added. At the end of trading, the benchmark KSE-100 index recorded a decrease of 178.69 points, or 0.16%, and settled at 114,177.66. In its market review, Topline Securities commented that the KSE-100 index witnessed a fierce tug of war between bulls and bears. The market opened on a negative note, reacting sharply to the State Bank's decision to maintain the policy rate at 12%, despite a significant decline in inflation, it said. "This decision dampened investor sentiment, pushing the index to the intra-day low of 746 points." However, the second half of the session saw a resurgence of buying interest. Market participants responded positively to speculation about possible clearance of the longstanding circular debt. The optimism propelled the index to the intra-day high of 129 points, Topline said. The positive movement was primarily fuelled by Pakistan State Oil (PSO), Pakistan Petroleum, Oil and Gas Development Company (OGDC), Meezan Bank and Hub Power, which together contributed 425 points to the index. Conversely, UBL, Service Industries, Fauji Fertiliser Company and Engro Fertilisers pulled the index down by 210 points, it added. Arif Habib Limited (AHL) remarked that the KSE-100 index saw an early decline to 113,600 points, following the SBP's decision to leave the policy rate unchanged, before a sharp recovery that brought the index in the green. Some 26 shares rose while 70 fell with PSO (+6.67%), Pakistan Petroleum (+2.86%) and OGDC (+1.89%) contributing the most to index gains. On the flip side, Service Industries (-5.25%), Engro Fertilisers (-0.83%) and Systems Limited (-1.21%) were the biggest drags, it said. "The key benchmark indices continue to indicate that accelerated gains are on the menu. The weekly objective remains to be 116,000 points," the brokerage house added. JS Global analyst Muhammad Hasan Ather said that the KSE-100 witnessed a range-bound session, with the benchmark index settling at 114,178, down 179 points. The decline followed the State Bank's decision to keep the policy rate unchanged, contrary to market expectations. Selling pressure was observed in key sectors including cement and banks, he said. "Looking ahead, market volatility may persist due to the global protectionist policies and food price fluctuations. Investors should remain cautious and monitor economic indicators," Ather added. Overall trading volumes decreased to 318.5 million shares compared with Monday's tally of 324.7 million. Shares of 438 companies were traded. Of these, 132 stocks closed higher, 233 fell and 73 remained unchanged. The value of shares traded during the day was Rs22.9 billion. Sui Southern Gas Company was the volume leader with trading in 26.4 million shares, gaining Rs1.58 to close at Rs37.03. It was followed by The Bank of Punjab with 22.1 million shares, gaining Rs0.04 to close at Rs13.16 and Worldcall Telecom with 18.1 million shares, falling Rs0.02 to close at Rs1.33. During the day, foreign investors sold shares worth Rs315.9 million, the NCCPL reported.
Express Tribune
10-03-2025
- Business
- Express Tribune
PSX flat over policy rate, IMF uncertainty
Pakistan Stock Exchange (PSX) on Monday closed almost flat amid uncertainty surrounding the State Bank of Pakistan's (SBP) monetary policy decision later in the day and the outcome of review talks between Pakistan and the International Monetary Fund (IMF). Analysts attributed the bearish performance to foreign fund outflows, a weak rupee and expectations of an increase in the Consumer Price Index (CPI)-based inflation. The KSE-100 index fluctuated between the peak of 650 points and the low of 246 points, before settling at 114,356, reflecting a thin decline of 42 points. Ahsan Mehanti of Arif Habib Corp stated that stocks closed flat amid uncertainty about the SBP's monetary policy and the outcome of Pakistan-IMF talks after reports suggested that the lender had opposed the idea of circular debt settlement through taking loans from banks. Foreign outflows, a weak rupee and an expected surge in CPI inflation played the role of catalysts in bearish close at the PSX, he said. At the end of trading, the benchmark KSE-100 index recorded a decrease of 42.36 points, or 0.04%, and settled at 114,356.34. In its review, Topline Securities commented that the stock market experienced a volatile session, with the benchmark index fluctuating between the peak of 650 points and the low of 246 points. It ultimately closed at 114,356, reflecting a modest decline of 42 points (-0.04%). The market's performance was largely influenced by prevailing uncertainty surrounding the monetary policy and circular debt concerns, it said. The positive movement was primarily fuelled by Engro Holdings, UBL, HBL, Pakistan Oilfields and Service Industries, which together contributed 504 points to the index. Conversely, Pakistan Petroleum, Oil and Gas Development Company and Pakistan State Oil (PSO) weighed on the market, pulling the index down by 317 points, Topline noted. Arif Habib Limited (AHL) reported that the week started flat at the PSX, ahead of the SBP's monetary policy committee meeting, with the high-on-day touching 115,000 points. Some 42 shares rose while 53 fell, with UBL (+1.98%), Engro Holdings (+4.06%) and HBL (+2.23%) contributing the most to index gains. On the flip side, Oil and Gas Development Company (-4.05%), Pakistan Petroleum (-2.76%) and Pakistan State Oil (-3.84%) were the biggest index drags, AHL commented. "Venturing above 115k bodes well for the remainder of the week, with expectations of gains towards 116k," it added. Ali Najib of Insight Securities stated in his market review that the PSX resumed trading in the new week in a consolidation mode as the KSE-100 index ended on a flat note at 114,356, down 42 points, or 0.04%. During the day, a mixed behaviour was witnessed, ahead of the crucial monetary policy announcement by the State Bank for the next couple of months. "The street view was scattered from maintaining the status quo to a 100-basis-point cut," he said. Najib added that movements in the KSE-100 index remained range bound amid a low trading volume. Overall trading volumes decreased to 324.7 million shares compared with Friday's tally of 404.4 million. Shares of 435 companies were traded. Of these, 194 stocks closed higher, 170 fell and 71 remained unchanged. The value of shares traded during the day was Rs20.7 billion. Power Cement was the volume leader with trading in 24.8 million shares, gaining Rs0.6 to close at Rs11.76. It was followed by Fauji Cement with 22.2 million shares, falling Rs2.08 to close at Rs43.91 and Maple Leaf Cement with 19.8 million shares, falling Rs0.6 to close at Rs56.03. During the day, foreign investors sold shares worth a net Rs186.5 million, according to the National Clearing Company.
Express Tribune
04-03-2025
- Business
- Express Tribune
IMF talks begin amid tax challenges
In the first half of FY25, the economic slowdown, exchange rate stability, lower-than-expected inflation, and sluggish LSM recovery led to a revenue loss of Rs338 billion. photo: file Listen to article Pakistan has made a strong start in talks with the International Monetary Fund (IMF), and the tax shortfall is expected to be significantly lower than Rs1 trillion due to anticipated large recoveries in court, Finance Minister Muhammad Aurangzeb said on Tuesday. Aurangzeb stated that the shortfall would be considerably less than Rs1 trillion and that the government would take several steps, including ensuring recoveries from court cases. He spoke to The Express Tribune after the formal opening of Pakistan-IMF negotiations, which will continue until March 14. However, sources revealed that the global lender had been informed that, due to lower-than-projected autonomous growth, the Federal Board of Revenue (FBR) suffered a loss of approximately Rs450 billion by February. No further shortfall on this account is expected until June. Additionally, another Rs540 billion in losses are anticipated due to weak responses to policy measures. The government has struggled to break the strong lobby of traders and the real estate sector. This results in a total revenue shortfall of Rs990 billion, stemming from low economic growth, weak enforcement against traders and real estate, and overestimations of new tax measures introduced in the budget. Despite these setbacks, the IMF was informed that some of these losses would be recovered through court cases related to tax matters. The government set an annual target of Rs12.97 trillion, and after adjusting for these losses, collections are expected to fall below Rs12 trillion, sources said. The finance minister expressed optimism about the talks, stating that the government expects a positive outcome. He also confirmed that Pakistan would discuss the framework for the next budget with the IMF during the ongoing negotiations to create fiscal space for relief measures. "We had a good start in talks today, and the Fund also had productive meetings in Karachi on Monday with the Pakistan Banks Association and the Pakistan Business Council," Aurangzeb said. For the first time, the IMF is holding separate meetings with the State Bank of Pakistan (SBP) and the federal government in different cities, deviating from the previous good practice of conducting all negotiations in one location. Pakistan and the IMF are conducting talks from March 3 to 14 for the first review of the $7 billion package. The discussions will gauge the implementation of agreed conditions for the July-December period of the current fiscal year. A successful review will pave the way for the release of the second loan tranche of over $1 billion. Following a separate meeting in Karachi with the SBP governor, IMF Mission Chief to Pakistan Nathan Porter opened talks with the finance minister in Islamabad. In his briefing, Porter discussed the FBR, the power sector, and the Pakistan Sovereign Wealth Fund (PSWF). He also acknowledged the introduction of agricultural income tax laws in the provinces. On Tuesday, the IMF team held multiple rounds of discussions with the FBR regarding tax collection performance during the current fiscal year. The FBR's eight-month revenue shortfall stood at Rs606 billion, which could rise to nearly Rs1 trillion by June if corrective measures are not taken. The IMF was informed that the government aims to recover approximately Rs300 billion from the Rs4 trillion stuck in court cases. An additional Rs100 billion is expected to be generated by lowering taxes on beverages and cigarettes, sources said. Prime Minister Shehbaz Sharif, during a special open cabinet meeting, stated that the government is working expeditiously to secure court decisions in tax cases involving Rs4 trillion. He highlighted the Rs23 billion recovered in the windfall income tax case, which was ruled in the government's favour by the Sindh High Court last week. The prime minister directed authorities to recover at least Rs500 billion from the Rs4 trillion stuck in court cases by June. Attorney General for Pakistan Mansoor Awan informed the cabinet that the legal team would closely monitor these cases. Awan further stated that tax cases have been delayed due to outdated legal procedures adopted by the FBR. However, with the prime minister's intervention, these mechanisms have been revised. Despite this, the government has provided a conservative estimate of Rs300 billion in recoveries to the IMF, FBR officials said. However, the Supreme Court of Pakistan recently ruled against the government in multiple tax cases, indicating that not all pending cases may be decided in favour of the tax authorities. In the past, the IMF has been sceptical of the government's claims regarding revenue collection from pending court cases and enforcement measures. The IMF's scepticism has often been validated. It remains unclear whether the IMF will accept the government's claim that Rs300 billion will be recovered this time. If the IMF does not accept the government's projections, the Ministry of Finance will need to find alternative ways to reduce expenditures. Development spending has already been curtailed and may face further cuts. According to the FBR's analysis, in the first half of the fiscal year, the economic slowdown, exchange rate stability, lower-than-expected inflation, and sluggish recovery in large-scale manufacturing led to a revenue loss of Rs338 billion. By the end of February, this gap had widened to Rs450 billion, sources said. The government assured the IMF that the economy is expected to recover from March onward, preventing further revenue losses due to autonomous growth in the March-June 2025 period. Aurangzeb told The Express Tribune that many policy measures did not yield the expected revenue results.
