July 23 -
Foreign debt seen at 28.7pc of GDP by 2012
Pakistan's foreign debt will increase from $33
billion to $40 billion by 2012, according to a latest official study.
It said that foreign debt as percentage of Gross
Domestic Product (GDP) will come down from 58 per cent in 2001 to 28.7
per cent in 2012. In absolute amount, the foreign debt in current
dollar terms will be around $40 billion.
The foreign exchange reserves will amount to $11.1
billion by end 2012, compared to $2.3 billion at the end of 2001.
The projected external scenario includes Foreign
Direct Investment (FDI) rising from the base of about $600 million
annually to around $1 billion annually by the end 2012. It is expected
that part of it will be financed from the reversal of capital flight
already taken place from Pakistan and the return of foreign currency
accumulated abroad on account of under invoicing of exports and over
invoicing of imports.
The envisaged public finance scenario reduces
internal debt from the existing 46.5 per cent of the GDP to 25.4 per
cent of the GDP by 2012. It involves raising tax revenues from 1.5 per
cent GDP to about 20.5 per cent of GDP by 2012. "This appears
somewhat optimistic but keeping in view the expected domestic
environment featuring documentation, good governance and financial
discipline, this is some thing unattainable," fears the study.
Empirically, it is not difficult to find examples
of low fiscal deficit or even surplus of the emerging economies like
Indonesia (+0.5%), Malaysia (+0.3), Thailand (+3.0) and Singapore
To achieve the envisaged levels of inflation rate
and real growth, monetary expansion is planned to be at least equal to
the nominal growth rate of
Gross National Product. The expansion is likely to
range between about 10 per cent to 11 per cent per annum.
SBP cuts discount rate to 13pc
The State Bank on Wednesday cut its discount rate
to 13 per cent from 14 per cent, in a move bankers called aggressive.
"Effective from July 19, 2001, the minimum rate of return to be
paid by recipients of financing facilities from the State Bank...has
been reduced from 14 per cent to 13 per cent on an annual basis,"
said a circular issued by the State Bank.
It added the new rate would be applied to the SBP
three-day repo facility offered against Government of Pakistan Market
Treasury Bills, together with Federal Investment or Pakistan
The SBP raised its discount rate to 14 per cent
from 13 per cent on June 6 in a bid to arrest the slide of the rupee,
which has lost more than 20 per cent of its value against the dollar
since last July.
Bankers said the central bank decision was an
Accords on debt rescheduling signed
Pakistan has signed $447.2 million debt
rescheduling accords with nine donor countries while the rest are to
be inked before the end of next month, official sources told APP on
Rescheduling pacts with 10 donor states, which are
in the pipeline, include USA-$392 million; Japan- $598 million;
Canada- $41 million; South Korea-$166 million; Switzerland-$18
million; the Netherlands -$17 million; Sweden-$40 million, UK-$4
million; Belgium-Non ODA-$ 8million; and Russia-17 million.
Debt agreements, signed with the nine donor states,
include Norway, Denmark, Finland, Germany, France, Italy, Belgium (ODA),
Spain and Austria.
Signing of 10 loan rescheduling treaties, valuing
$23 million, with non-Paris Club members, including Czech Republic,
the UAE, Saudi Arabia, Kuwait and Libya, will complete the whole
rescheduling process of $1.8 billion before September 2001, according
to the sources.
Gold touches new peak
Gold prices on Thursday touched all time high at
Rs5,925 per 10 grams against Rs5,898 per 10 grams on June 27 and
Rs5,847 on June 9.
ICI plans Rs1.6bn TFC for PTA
A signing ceremony for ICI Pakistan Limited Rs1.6
billion listed Term Finance Certificate (TFC) issue for the company's
PTA business, was held at the company's head office on Thursday, an
ICI press release said.
The issue has been jointly arranged by ABN Amro
Bank and Jahangir Siddiqui & Co. Ltd, the company statement
stated, adding that it had been successfully placed amongst a large
number of employee and corporate funds, insurance companies and
investment/ commercial banks.
PICIC raises rate of return on TCs
Pakistan Industrial Credit and Investment
Corporation (PICIC) has increased the rate of return on its term
certificates particularly for retirees, widows and orphans.
A senior official of the corporation said on
Thursday that family income certificates (FICs) have been made
flexible and attractive for the certificate holders in terms of
He said that the return is even higher than
national saving schemes and other fixed deposit products.
SLIC announces bonuses
State Life Insurance Corporation (SLIC) of Pakistan
has allocated bonuses of Rs9.2 billion for the policy-holders.
National Bank of Pakistan
The National Bank is likely to post pretax profit
of over Rs1.0 billion for the year 2000, up 98 per cent from Rs519.9
million for the previous year. After tax profit has multiplied almost
15 times from Rs31.3 million to Rs461.2 million producing earning per
share at Rs3.15, up from Re0.21 in 1999.
Palm oil price rises
Prices of palm oil in the domestic market has risen
to Rs1,495 per maund on Tuesday from Rs1,425 per maund two days back
following rising trend in Malaysia.
Till July 6, palm oil was quoted at Rs1,310 per
maund, thus rising by 14 per cent till now. Importers told that the
FOB price of palm oil was $260 per ton till first week of this month,
but increased to $302 per ton on Saturday and $340 per ton on Tuesday.