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 5. TRADE  6. GULF



Feb-18 24, 2002

Large scale units to grow during January-June

Mounting demands for food items, construction material and a host of other goods from Afghanistan is expected to improve the performance of large scale manufacturing in the second half of this fiscal year.

In the first half of fiscal 2001-02 many sub-sectors of large scale manufacturing had shown dismal performance.

Cooking oil and ghee makers say supply of these items to Kabul has been in full swing after the fall of Taliban in October. They hope that the supply would rise further once the government puts in place the procedure for offering a fixed rebate on exports to Afghanistan. The government had announced to offer this rebate on January 17.

"We have exported thousands of tons of food items including cooking oil and ghee to Afghanistan since October," says Amjad Rashid a leading cooking oil and ghee maker and international supplier of food items. "We hope that exports of food items would rise further in the coming months particularly if the procedure for getting duty rebate is announced immediately."

Figures for food items export to Kabul in the first half of this fiscal year are not available but the fact that cooking oil industry has performed well during this period can be attributed to increased export of food items to Afghanistan.

According to Federal Bureau of Statistics, Pakistan produced more than 63,000 tons of cooking oil in July-December 2001 keeping its growth rate intact at 17 per cent.

Though production of vegetable ghee recorded a fall of 7.7 per cent at 385,000 tons in six months to December 2001 the country was still able to export thousands of tons of ghee to Afghanistan.

In the past, these and other food items used to be smuggled into land-locked country but since the induction of an interim government there smuggling has come to a halt. That is why an increase in exports to Afghanistan has not lowered local market supplies in cases where actual production of food items has fallen.

Water level at Tarbela, Mangla dismal

The water level at Tarbela reservoir has dropped to 1,386 feet, only 17 feet above the dead level, forcing drastic cuts on provincial shares.

According to the data released by Indus River System Authority (Irsa), the dead level of Tarbela is 1,369 feet and the level recorded on Tuesday was 1,386 feet, with an inflow of 13,100 and outflow of 22,000 cusecs.

When asked as to how long the storage at Tarbela would last, an Irsa official said they would try to manage with whatever water was available in Tarbela till March 31, the last day of kharif season.

He pointed out that at an Irsa meeting on Feb 6, the provinces were apprised of the deteriorating situation and they had voluntarily agreed to reduce their indents. "We are hoping that the situation after March 31 will improve as substantial snowfall has been reported in the Northern Areas," he added.

Inflation rises in seven months

Inflation rate based on Sensitive Price Indicator (SPI), Consumer Price Index (CPI) and Wholesale Price Index (WPI) during the first seven months of this fiscal, July-January 2001-2002 , surged by 2.09 per cent, 2.53 per cent and 2.53 per cent, respectively, over the corresponding period of 2000-2001.

Official figures released by Federal Bureau of Statistics (FBS) on Thursday, showed the inflation increased by 5.35pc, 4.88pc and 6.71pc during 2000-2001 in comparison with the period of 1999-2000.

And in 1999-2000, the rate of inflation increased by 1.84pc, 3.37pc and 1.53pc, respectively, over the same period of 1998-99.

ADB to provide $650m for four uplift projects

The Asian Development Bank (ADB) will provide $650 million for four new uplift projects during 2002.

Sources said on Tuesday, the bank had initially finalised funding for four development schemes which included Capital Market Follow up Loan ($250m), Sindh Rural Development Loan ($50m), Devolution Support Programme Loan ($250m), and Districts Schools Management Loan ($100m).

There were about six more loans to be finalised out of $1 billion assistance lined up by the ADB for this year.

Moody's, Standard laud reform

The credit rating agencies Moody's and the Standard and Poor on Monday expressed their continued faith in Pakistan's economic reform package in their meetings with Pakistan's Finance Minister Shaukat Aziz.

The Standard and Poor in January announced that Pakistan's foreign currency ratings are "B-(minus)/Stable/B" and Moody's is determined that Pakistan's economic outlook became positive from negative.

Consumers' power subsidy restored

The Water and Power Development Authority (Wapda) has restored, at its own, the subsidy to domestic consumers exceeding 1,000 units monthly power consumption with retrospective effect from Aug 8, 2001.

Brig Waseem Zafar told that in response to the public sufferings arising out of the withdrawal of subsidy under the National Electric Power Regulatory Authority (Nepra) directive, Wapda would itself absorb the financial burden of around Rs280 million.

GDP growth forecast

The second quarter (Oct-Dec 2001) report released by the ABN-AMRO Bank N.V (Pakistan) last week, 'fine-tunes' its earlier forecast of Pakistan's expected GDP growth in financial year 2002, from a range of 2.5 to 3.1 per cent, to a new provisional range of 2.7 to 3.1 per cent.