Latest news with #PakistanEconomicSurvey2024-25
Business Recorder
16-06-2025
- Business
- Business Recorder
Pakistan's cement sector joins solar wave as Gharibwal doubles down on renewable
Gharibwal Cement Limited has taken a significant step towards sustainable energy consumption with the successful commissioning of an additional 12.5 megawatt (MW) solar power system at its plant site. The listed company, engaged in the production and sale of cement, disclosed the development in its notice to the Pakistan Stock Exchange (PSX) on Monday. 'We are pleased to inform the PSX and other stakeholders that Gharibwal Cement Limited has successfully completed the installation and commissioning of an additional 12.5 MW solar power system at its plant site,' read the notice. Pakistan's solar boom continues as govt proposes 18% tax The cement maker shared that this new capacity has been integrated with the company's existing 12MW solar infrastructure, thereby enhancing the total installed solar generation capacity to 24.5MW. 'The additional 12.5MW solar power system has commenced commercial operations from June 16, 2025, and is now contributing to the company's captive energy requirements. 'This strategic investment aligns with the company's sustainability objectives and long-term energy cost optimization strategy by enhancing reliance on renewable energy resources, reducing dependence on fossil fuels, and contributing to environmental conservation,' it added. Despite being a low-income country plagued by economic and social issues, a green revolution is taking place in Pakistan, and the South Asian country has quietly emerged as one of the world's largest markets for the growing solar industry. According to the enter link description hereGlobal Electricity Review 2025 by Ember, an energy think tank in the UK, Pakistan imported 17 gigawatts (GW) of solar panels in 2024, joining the ranks of leading solar nations. This rising trend has left decision-makers grappling with its implications for the national grid and energy sector, as electricity consumption remains stagnant. In response, the federal government, in its budget for the financial year 2025-26, on Tuesday revealed its intention to impose an 18% sales tax on imported solar panels. The proposed tax would help the local industry grow, Finance Minister Muhammad Aurangzeb said in his budget speech in the National Assembly. The development comes amid a solar boom in the country, with net-metering capacity in Pakistan jumping to 2,813 megawatts (MW) as of March 31, 2025, according to the Pakistan Economic Survey 2024-25 released on Monday.
Express Tribune
14-06-2025
- Business
- Express Tribune
Govt borrowing crowds out private sector
Over half of the fresh borrowing in the education sector was done by the higher education sector. PHOTO: FILE Listen to article The Pakistan Economic Survey 2024-25 has highlighted a persistent structural imbalance in the country's banking sector, where lending to the government continues to dominate over credit disbursement to the private sector. Commercial banks have largely preferred investing in risk-free government securities, such as treasury bills and Pakistan Investment Bonds (PIBs), which offer secure and high returns, especially given the elevated interest rate environment that prevailed for most of FY24. The policy rate remained at a record high of 21% during much of the year as part of State Bank of Pakistan's (SBP) efforts to curb inflation. This made government securities particularly attractive to banks, leading to a further rise in their share within banks' asset portfolios. In terms of domestic debt, the government relied mostly on long-term borrowing through PIBs and Sukuk for financing the fiscal deficit. During the period, Rs2.4 trillion worth of treasury bills were retired. The government also introduced a new two-year, zero-coupon bond through which Rs610 billion was raised. These measures helped improve the maturity profile, reflected by the extension of the average time to maturity of the domestic debt from 2.9 to 3.5 years, according to the survey. "Regarding the auction of domestic debt securities, robust market participation was witnessed," said the report. Total bids received for treasury bills were Rs28.230 trillion (acceptance of Rs9.473 trillion), PIBs Rs23.540 trillion (acceptance of Rs9.682 trillion) and Sukuk Rs4.889 trillion (acceptance of Rs1.562 trillion). The government followed a calibrated acceptance strategy to manage cost and rollover risk. As a result, credit to the private sector remained subdued throughout the year. High borrowing costs discouraged private sector firms from taking new loans while macroeconomic uncertainty and weakened business confidence also dampened demand for credit. Furthermore, restrictions on imports and foreign exchange shortages earlier in the fiscal year adversely impacted industries that rely on imported raw material and machinery, further reducing the need for private borrowing. The survey suggests that private sector credit growth was either stagnant or negative in real terms when adjusted for inflation, signalling constrained access to affordable financing. On the other hand, the government's borrowing requirements remained elevated due to a large fiscal deficit and the need to meet substantial debt servicing obligations. Consequently, banks found it easier and safer to park their funds in government debt rather than riskier private sector lending. This behaviour has caused a "crowding out" effect, limiting credit availability for productive sectors such as small and medium enterprises (SMEs), agriculture and export-oriented industries – sectors that are essential for economic diversification, job creation and sustainable growth. Recognising this imbalance, the State Bank of Pakistan (SBP) introduced various policy measures to promote private-sector credit. These include the Export Finance Scheme (EFS), Long-Term Financing Facility (LTFF) and SME Asaan Finance (SAAF), designed to offer concessional financing to priority sectors. However, the uptake of these facilities has remained moderate, largely due to the high cost of borrowing, uncertain economic prospects and low-risk appetite among both lenders and borrowers. The Economic Survey cautions that unless private sector credit conditions improve, the country's broader goals of industrial modernisation, technological upgrading and export competitiveness may remain unfulfilled. The limited flow of financing to the private sector restricts the potential for new investment, expansion of productive capacity and diversification of the economy. This structural weakness poses a long-term challenge to Pakistan's growth trajectory and must be addressed through coordinated fiscal, monetary and structural reforms aimed at reducing the government's borrowing needs and enhancing the creditworthiness of private enterprises. Financial inclusion remains a strategic priority but continues to face hurdles. The survey notes encouraging growth in microfinance and branchless banking sectors, yet large segments of the population – particularly women and rural communities – remain underserved. The microfinance sector reported significant expansion, with active borrowers increasing from 9.56 million in December 2023 to over 12.34 million by the end of 2024. Total deposits in microfinance institutions rose from Rs597 billion to Rs732.9 billion over the same period. However, the average loan size decreased from Rs59,988 to Rs48,971, indicating smaller loan amounts that may limit economic empowerment potential. Branchless banking, a vital tool for reaching the underserved population, saw positive momentum as well. The number of branchless banking accounts increased 11% to 126.7 million in December 2024, with transaction volumes growing 38% to over 5.4 billion during the year. The value of these transactions surged 42% to Rs25.8 trillion, highlighting growing reliance on digital financial services. Despite these gains, infrastructure gaps, limited digital literacy and low trust in formal financial institutions continue to impede broader financial inclusion.
Business Recorder
12-06-2025
- Business
- Business Recorder
Pakistan's solar boom continues as govt proposes 18% tax
Cherat Cement Company Limited (CHCC) has further enhanced its renewable portfolio with the commissioning of a 2.935 MW solar power plant at its facility in Khyber Pakhtunkhwa. The listed company engaged in the manufacturing of cement disclosed the development in its notice to the Pakistan Stock Exchange (PSX) on Thursday. 'We are pleased to inform that the company has commissioned remaining 2.935 MW solar power plant at its factory site Nowshera, Khyber Pakhtunkhwa on June 11, 2025, out of the total project of approximately 9 MW,' read the notice. 'After commissioning of this project, the total captive solar power generation capacity of the company will become around 23 MW,' it added. Back in April, the cement manufacturer added 6.065MW to its renewable capacity. Despite being a low-income country plagued by economic and social issues, a green revolution is taking place in Pakistan, and the South Asian country has quietly emerged as one of the world's largest markets for the growing solar industry. According to the Global Electricity Review 2025 by Ember, an energy think tank in the UK, Pakistan imported 17 gigawatts (GW) of solar panels in 2024, joining the ranks of leading solar nations. This rising trend has left decision-makers grappling with its implications for the national grid and energy sector, as electricity consumption remains stagnant. In response, the federal government, in its budget for the financial year 2025-26, on Tuesday revealed its intention to impose an 18% sales tax on imported solar panels. The proposed tax would help the local industry grow, Finance Minister Muhammad Aurangzeb said in his budget speech in the National Assembly. The development comes amid a solar boom in the country, with net-metering capacity in Pakistan jumping to 2,813 megawatts (MW) as of March 31, 2025, according to the Pakistan Economic Survey 2024-25 released on Monday.
Business Recorder
10-06-2025
- Business
- Business Recorder
Budget 2025-26: Pakistan govt proposes 18% tax on imported solar panels
Pakistan government on Tuesday proposed the budget for the financial year 2025-26, revealing its intention to impose 18% sales tax on imported solar panels. The proposed tax would help the local industry grow, Finance Minister Muhammad Aurangzeb said in his budget speech in the National Assembly. The development comes amid a solar boom in the country, with net-metering capacity in Pakistan jumping to 2,813 megawatts (MW) as of March 31, 2025, according to the Pakistan Economic Survey 2024-25 released on Monday. Key highlights of Pakistan Economic Survey 2024-25 The net-metering capacity rose by over 300MW from the previous fiscal year, when the capacity stood at around 2,500MW, as per NEPRA's State of the Industry Report 2024. The 300MW jump in net-metering capacity was largely attributed to a sharp fall in solar panel prices and the financial incentives net-metering offers to consumers. However, with 18% tax proposed in the budget for FY26, the prices for solar panels may increase. Despite being a low-income country plagued by economic and social issues, a green revolution is taking place in Pakistan and the South Asian country has quietly emerged as one of the world's largest markets for the growing solar industry. According to the Global Electricity Review 2025 by Ember, an energy think tank in the UK, Pakistan imported 17 giga-watts (GW) of solar panels in 2024, joining the ranks of leading solar nations. 'Solar is now so cheap that large markets can emerge in the space of a single year - as evidenced in Pakistan in 2024,' read the report published earlier this year. 'Amid high electricity prices linked to expensive contracts with privately-owned thermal power stations, rooftop solar installations in Pakistan's homes and businesses soared as a means of accessing lower-cost power.' A recent research report stated that China exported more solar panels to Pakistan than to many G20 nations, with over 16 gigawatts (GW) imported in 2024 alone. The report titled 'Leader of One or Leader of None - China's Choice for Clean over Coal in Pakistan' published by think tank Renewables First said more than 39GW of solar panels, nearly all from China, entered Pakistan in the last five years. Solar panels: Pakistan govt mulling withdrawing ST exemption These solar panels are 'enough to exceed three-quarters of Pakistan's installed national generation capacity', the report said. 'Pakistan may be the first to experience this clash between legacy coal and democratised solar at this scale, but it will not be the last. If China gets this right, it will not just lead to Pakistan's energy transition. It will prove itself as the architect of a new Global South energy paradigm, one that is fast, fair, and truly transformative,' the report envisaged.
Business Recorder
10-06-2025
- Business
- Business Recorder
July-March 2025: LSM experiences 1.5% negative growth
ISLAMABAD: Large-Scale Manufacturing (LSM) has experienced a negative growth of 1.5 percent during July-March 2025 in contrast to a slight decline of 0.22 percent observed in the corresponding period of the previous year. Within manufacturing, LSM plays a dominant role, accounting for 67.5 percent of the manufacturing sector and 8.0 percent of GDP, followed by Small-Scale Manufacturing (SSM) and Slaughtering, which contribute 2.4 percent and 1.4 percent to GDP, respectively, according to Pakistan Economic Survey 2024-25. The quarterly pattern highlights continued challenges in LSM, which has consistently weighed down industrial performance in the outgoing fiscal year. Gradual recovery likely in LSM sector, says FD Overall manufacturing growth slowed to 1.3 percent in FY 2025, compared to 3.0 percent last year. This deceleration was primarily driven by a contraction of 1.5 percent in LSM, compared to a modest growth of 0.9 percent in the previous year. In contrast, SSM and Slaughtering grew by 8.8 percent and 6.3 percent, respectively, providing some support to the sector. This marks the third consecutive year of negative growth in LSM, which can be attributed to ongoing structural challenges, elevated input costs, and downturns in critical sectors such as Food, Chemicals, Iron & Steel, and Electrical Equipment. Despite the overall lacklustre performance, nearly half of the LSM sectors demonstrated positive growth, including significant industries such as Wearing Apparel, Textiles, Coke & Petroleum Products, Pharmaceuticals, and Automobiles, according to the survey. However, in March 2025, the growth of LSM registered a Year-on-Year (YoY) increase of 1.8 percent, in contrast to a growth rate of 1.7 percent during the same month in the previous year. On a Month-on-Month (MoM) basis, LSM experienced a decline of 4.6 percent in March2025, following a drop of 5.6 percent in February 2025. The LSM, based on the Quantum Index of Manufacturing (QIM), declined by 1.53 percent during current fiscal 2025, compared to a growth of 0.94 percent last year. The slowdown reflects mixed performance across key industries - declines were observed in chemicals (-5.51%), iron and steel (-10.94%), electrical equipment (-15.89%), and fabricated metal products (-17.16%), while strong growth was recorded in automobiles (40.0%), wearing apparel (7.62%), textiles (2.15%), and petroleum products (4.48%) High input costs, and elevated tax rates, continued to pose headwinds to LSM growth. Copyright Business Recorder, 2025
