. .

Nov 13 - 19, 2000

National savings rise to 13.4pc

The national savings rose to 13.4 per cent of GNP (gross national product) from 11.2 per cent a year earlier.

According to the State Bank annual report for 1999-2000, this happened due to an increase of 28.5 per cent in national savings at the current market prices during the year against a fall of 17.3 per cent previous year.

The report released on Monday said that the improvement in savings was mainly attributable "to deceleration both in the growth of consumption expenditure and the rate of inflation."

Consumption expenditure registered a growth of 9.7 per cent in 1999-00 compared with 13 per cent a year earlier. The consumer inflation fell to 3.6 per cent from 5.7 per cent in 1998-99.

"Better performance of the corporate sector also supported the rise in private savings," that grew by 13.8 per cent from 10.4 per cent in 1998-99.

"Had net factor income from abroad not declined by 48 per cent in 1999-00 the increase in savings would have been much higher," notes the report. The report says that national savings financed 88 per cent of gross total investment in the last fiscal year up from 74.9 per cent a year ago. The resource gap (the difference between savings and investment rates) of 12 per cent in 1999-00 was financed by foreign savings or net inflows of external capital. The report says that a pronounced drop of 48.1 per cent in the net inflow of external capital was observed in 1999-00 in contrast with an increase of 33 per cent a year earlier.

Gross fixed investment at current prices has been estimated at Rs421.9 billion in 1999-00 depicting an increase of 9.5 per cent as compared to the decline of 4.3 per cent in the preceding year. Here, whilst the ratio of gross fixed investment to GNP merely increased from 13.4 per cent in 1998-99 to 13.5 per cent in 1999-00, private fixed investment rose by 9.4 per cent to Rs252.9 billion against a decline of 11.6 billion a year ago.

ADB to give $150m loan

The Asian Development Bank has decided to provide a $150-million soft-term loan to the Micro-Finance Bank (MFB) which will be extended to half a million poor households.

According to an official announcement on Saturday, the most obvious manifestation of poverty is the low household income. The lack of access to affordable financial services in the formal financial sector limits opportunities to the poor to augment their income, keeping them in debt and deficit.

The government has, therefore, adopted a policy to develop a micro-finance system that can provide the poor with an access to affordable and sustainable financial service.

The key aspect of the policy is to provide finances to promote income- earning opportunities to the poor, particularly women.

LoI received for $600m IMF loan

The government on Saturday received a Letter of Intent from the IMF to secure the much sought after $600 million loan under Stand-by Arrangement.

"I have received the LoI which is now being signed and sent back to IMF for circulation among the members of the board of directors of the Fund", said the minister for finance Shaukat Aziz.

He said that the government was now hopeful to get a $3.5 billion joint package from the IMF, World Bank, the Asian Development Bank and the Paris Club.


National Bank President S. Ali Raza said on Wednesday that NBP would be made a truly commercial bank both in terms of its working and outlook by June 2001 at an estimated cost of Rs 400-500 million.

Caltex raises furnace oil prices

Caltex Pakistan has decided to raise the furnace oil prices by Rs301 per metric ton to Rs13,508 from Rs13,207. The new price will be effective from November 10, sources in Caltex Pakistan told on Wednesday. They said the decision had been taken following price increase made by the local refineries on Tuesday. An official at the National Refinery Limited (NRL) said the company had increased the fuel oil prices to Rs11,442 pmt from Rs11,180 pmt.

Berger Paints

Berger Paints Pakistan Limited announced the financial figures for the year ended June 30, 2000, posting a growth of 73 per cent in pretax profit to Rs48.7 million, from a year ago pretax earnings at Rs28.2 million. After tax profit jumped 95.9 per cent to Rs33.1 million, from Rs16.9 million the previous year.

Govt borrows Rs135bn

The present tight monetary policy of the State Bank has its roots in an excessive government borrowing from the central bank in the last fiscal year.

The government borrowed Rs135 billion in fiscal 1999-00 that created an imbalance in the interest rates structure of treasury bills. Senior bankers say by tightening its monetary policy last month SBP has tried to remove them.

The State Bank annual report released on Monday discloses that in 1999-00 the federal government borrowed from SBP Rs 135 billion i.e. 15 times more than its 1998-99 borrowing of around Rs 9 billion. But at the same time it retired Rs 95 billion of commercial bank credit that kept the net borrowing for budgetary support at a level of Rs40 billion.

Rs22 billion profit

The State Bank earned a net profit of Rs22 billion in fiscal 1999-00, according to the balance sheet of the central bank released as part of its annual report.

NIT, ICP privatization

Privatization Commission Chairman, Altaf M. Saleem, on Monday said that plans are on the cards to sell the rights to operate the National Investment Trust (NIT) and Investment Corporation of Pakistan (ICP) without selling the assets themselves.

Cherat Papersack

The Cherat Papersack Limited announced financial results for the year ended June 2000. Net sales were shown to have improved 4.3 per cent to Rs 615.6 million from a year ago sales at Rs 590.2 million. The benefit did not, however, travel down to the bottomline, as pretax profit stood down by 13 per cent to Rs 74.2 million, from Rs 85.3 million and after tax profit declined 13.8 per cent to Rs 71.1 million, from Rs 82.5 million the previous year.