Highlights of the Economic Condition of Pakistan during the week ended 31st March 2023
9th Review of the IMF Program
The most awaited 9th review of the IMF rollover plan is still underway due to the demand for reasonable guarantees by the IMF from the UAE and Saudi Arabia to fill the gap in the balance of payments up till June this year. The foreign reserves of Pakistan deteriorated by USD 354 billion during the week bringing the reserves to USD 4.2 billion. After six consecutive weeks of rise in the reserves.
IMF has also shown concerns over the revision of the petroleum policy of increasing the prices by PKR 100 for a certain class of consumers.
Roll Over of USD 2 billion Chinese Loan
The rollover of USD 2 billion loan from China has been finalized, which is good news for uplifting the country’s economy and coping with the economic crisis in Pakistan for a short time. The Foreign Minister confirmed in the Senate Session on Friday that the documentation of the rollover program has been completed.
Increase in Policy Interest Rate
The State Bank of Pakistan is likely to increase the policy interest rate by 150 basis points to 21.5% in the upcoming review of monetary policy to cope with the rising inflation in the country. The central bank is making all possible efforts to secure the 9th review of the IMF program which has been pending so far without any conclusion since November 2022. The meeting of the Monetary Policy Committee of the State Bank is likely to be held on April 04, 2023 (Tuesday).
Tax Collection Target for the Quarter
FBR issued provisional data on Friday the close of the quarter that shows a decline in the collection of tax revenue. The tax collection target for the quarter could not be met as against the targeted revenue of PKR 727 billion, a tax of PKR 663 billion was collected which is short by 8.8% of the target collection. The shortfall will increase the pressure on the FBR for tax collection during the last quarter of the fiscal year.
Stock Market
The KSE 100 index closed at 40000 points with a gain of 152 points over the previous day. A total of 112 million shares were traded on the last day of the quarter i.e. 31st of March 2023. The upward trend DoD (Day on Day) was due to the quarter-ending factor otherwise based on the previous data, the market is showing a decline over the past period due to rising inflation in the country coupled with political instability and economic crisis in the shape of weakening foreign reserves and rising interest rate.
Sensitive Price Indicator (SPI)
The Sensitive Price Indicator (SPI) is a tool to assess the changes in the prices of basic essential commodities that are computed weekly by the Pakistan Bureau of Statistics (PBS). It is an indicator to assess the situation of prices in the country for comparison and review of inflation. The SPI is computed for 51 essential items on the data collected from 17 urban cities of Pakistan.
The SPI for the week ended on 31st of March 2023 declined by 0.36% as compared to the last week as per the weekly report issued by the Pakistan Bureau of Statistics.
The decrease and increase in prices in terms of percentage during the week are shown in the table below:-
For a review of SPI for the last week click on the following link
The economic condition of Pakistan, the week ended 24th March 2023
The condition is continuously going down. This country needs an early elections now. Stable government and people’s choice is the need of the hour.