Latest news with #JameelAhmed
Business Recorder
15 hours ago
- Business
- Business Recorder
Policy rate kept unchanged at 11pc
KARACHI: Amid evolving macroeconomic indicators and emerging risks, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) has decided to maintain the benchmark interest rate at 11 percent, signaling a cautious stance to ensure price stability and support economic recovery. The committee observed that the external outlook remains vulnerable to several risks, primarily driven by escalating geopolitical tensions, volatility in global oil prices, potential adverse effects of proposed budgetary measures, and the possibility of shortfalls in anticipated financial inflows. The meeting of the MPC held on Monday at SBP head office and chaired by SBP Governor Jameel Ahmed. During the meeting the committee noted that the increase in inflation in May to 3.5 percent y/y was in line with its expectation, whereas core inflation declined marginally. Meanwhile, inflation expectations of both households and businesses moderated. However, going forward, inflation is expected to trend up and stabilize in the target range during FY26. The committee has also emphasized the timely realization of planned foreign inflows, achievement of the targeted fiscal consolidation and the implementation of structural reforms as essential to maintain macroeconomic stability and achieve sustainable economic growth. The MPC also assessed that economic growth is picking up gradually and is projected to gain further traction next year, supported by the still-unfolding impact of earlier policy rate cuts. At the same time, the Committee noted some potential risks to the external sector amidst the sustained widening in the trade deficit and weak financial inflows. It was observed that some of the proposed FY26 budgetary measures may further widen the trade deficit by increasing imports. In this regard, the Committee deemed that unchanged decision appropriate to sustain the macroeconomic and price stability. The Committee noted the following key developments since its last meeting. First, the real GDP growth for FY25 is provisionally reported at 2.7 percent, and the government is targeting higher growth of 4.2 percent for next year. Second, despite a substantial widening in the trade deficit, the current account remained broadly balanced in April. Meanwhile, the completion of the first EFF review led to the disbursement of around $1 billion, which increased the SBP's FX reserves to $11.7 billion as of June 6. Third, the revised budget estimates indicate the primary balance surplus at 2.2 percent of GDP in FY25, up from 0.9 percent last year. For next year, the government is targeting a higher primary surplus of 2.4 percent of GDP. Lastly, global oil prices have rebounded sharply, reflecting the evolving geopolitical situation in the Middle East and some ease in US-China trade tensions. Taking stock of these developments and potential risks, the MPC assessed that the real interest rate remains adequately positive to stabilize inflation within the target range of 5–7 percent. As anticipated, headline inflation increased to 3.5 percent y/y in May from 0.3 percent in April. This reversal largely reflected the phasing out of the favourable base effect from food prices, along with persistence in core inflation. In contrast, energy prices continued to remain lower than last year, mainly reflecting the impact of moderation in global oil prices. Further, the MPC's initial assessment indicates the recent budgetary measures to have a limited impact on the inflation outlook. Nonetheless, some near-term volatility in inflation is expected, before it gradually inches up and stabilizes within the 5-7 percent target range. This outlook, however committee believed that, remains subject to multiple risks emanating from potential supply-chain disruptions from regional geopolitical conflicts, volatility in oil and other commodity prices, and the timing and magnitude of domestic energy price adjustments. According to provisional PBS estimates, the economy gained momentum during the second half of FY25, with real GDP growth accelerating to 3.9 percent from 1.4 percent in H1-FY25, broadly in line with the MPC's earlier expectations, though with compositional differences. The agriculture sector underperformed relative to FY24 due to a sizable decline in the production of major crops. In contrast, the industry and services sectors contributed to the uptick in real GDP growth, particularly in H2-FY25. Looking ahead, the MPC anticipates the industry and services sectors to continue to drive economic growth in FY26 and this assessment is supported by the sustained momentum in high-frequency indicators, including credit to private sector, imports of machinery and intermediate goods, and business sentiments and easing financial conditions. On balance, the Committee expects real GDP growth to increase further during FY26. According to monetary policy statement, on external front, the current account was almost balanced in April 2025, taking the cumulative surplus to $1.9 billion during July-April FY25. Imports continued to grow in line with improving economic activity; while export growth decelerated, partly due to the challenging global trade environment. However, workers' remittances continued to remain strong and more than offset the impact of the widening trade deficit on the current account. Based on these trends, the current account is expected to remain in surplus in FY25. Nonetheless, the uncertain global trade environment, coupled with expected continued strong import demand, is projected to turn the current account into a moderate deficit in FY26. Meanwhile, the MPC noted that despite net financial inflows remaining weak so far, the SBP's FX reserves are expected to increase to around $14 billion by end-June 2025. Going forward, external outlook is susceptible to multiple risks, which mainly stem from heightened geopolitical tensions, volatility in international oil prices, possible adverse impact of proposed budgetary measures, and potential shortfalls in planned financial inflows On Fiscal side, the revised budget estimates indicate that both the overall fiscal and primary balances improved further during FY25. This improvement came on the back of an increase in revenues and relatively contained expenditures, especially PSDP. Copyright Business Recorder, 2025
Business Recorder
15 hours ago
- Business
- Business Recorder
Risks in agri sector: FY26 growth target challenging: SBP
KARACHI: The State Bank of Pakistan (SBP), in a briefing to analysts, has said that the GDP growth target of 4.2 percent for FY26 is considered achievable but remains challenging, primarily due to risks in the agriculture sector. According to Arif Habib Limited Research, in the Analyst Briefing, it was mentioned the projected growth is expected to be driven by industrial and services sectors, buoyed by robust import volumes, a rebound in auto sales, rising capacity utilization, improved employment sentiment, and a Purchasing Managers' Index (PMI) consistently above 50 since December 2024. Moreover, Governor SBP Jameel Ahmed informed that the SBP will release its own assessment in July, which will include projections for GDP, inflation, current account, and FX reserves. FY25 debt repayments amounted to $25.8 billion are almost fully settled, only $400 million pending. FY26 debt servicing to remain similar; exact details will be shared in the next MPC. SBP BSC & Bank of Punjab join hands for Agri Kissan Mela The SBP anticipates a current account surplus for FY25, with improved external buffers going into FY26. FY25 remittances projected at $38 billion for FY25, up from $31.3 billion last fiscal year. The $7 billion jump is largely due to a one-time shift from informal to formal channels. Incentives are being designed in coordination with banks and government to maintain the formal inflow trend. The OMO stock increased mainly due to two reasons higher currency in circulation during Eid and secondly time lag between debt repayments and incoming inflows. However, OMO levels are expected to decline in the coming weeks as inflows materialize. It was informed that the SBP's profit of Rs 2.4 trillion will be transferred to the government after audit and Board approval in early FY26. This figure was validated by SBP and included in the FY26 budget. Since the 2022 SBP Act amendment, profit is transferred annually, not quarterly. The SBP confirms it is on track to meet the June NIR target under the IMF program. Additionally, the Dec'24 target was also met with a wide margin. The SBP mentioned that its baseline oil price assumption is USD 75/barrel. According to Topline Research for the next fiscal year (FY26), Governor SBP Jameel Ahmed mentioned that external debt repayments will be more or less the same. Copyright Business Recorder, 2025
NDTV
02-06-2025
- Politics
- NDTV
"Why Target Us?" Fear In Delhi's Batla House As Demolition Deadline Looms
Fear and anxiety is palpable among the residents of Muradi Road and Khizar Baba Colony in Delhi's Batla House as they face eviction notices from the Delhi Development Authority (DDA) and the Uttar Pradesh Irrigation Department, with demolitions looming as early as June 11. Clutching rent deeds, utility bills, and property tax records spanning decades, the communities are mounting a legal fight to protect their homes, determined to halt the bulldozers. The notices, stemming from a May 7 Supreme Court order, target unauthorized structures on 2.8 bigha (0.702 hectare) of land in Khasra number 279 along Muradi Road, under DDA's jurisdiction, and 4.5 bigha (1.12 hectare) in Khasra number 277 in Khizar Baba Colony, claimed by the UP Irrigation Department. Red crosses on doors and walls signal the impending threat. For residents, the orders are a shock after decades of unchallenged residency. "We've lived here for over 50 years. My grandfather built this house," said Jameel Ahmed, a 60-year-old Muradi Road resident, displaying a worn rent deed from the 1980s. "No one ever told us this was DDA land - no signs, no warnings. Now they want us out in 15 days?" The DDA's notice spares homes covered by the Pradhan Mantri - Unauthorised Colonies in Delhi Awas Adhikar Yojana (PM-UDAY), a 2019 scheme to legalise ownership in 1,731 unauthorised colonies. Yet, many residents argue their properties, backed by pre-2014 title documents, are wrongly excluded. In Khizar Baba Colony, the UP Irrigation Department's May 22 notice offers no such relief, with an Okhla office official confirming plans for bulldozers and security forces. Shoaib Danish, a former councillor, is leading the resistance. "We're petitioning the Supreme Court against the DDA and approaching a local court for the UP notice," he said, as residents pooled documents. "These aren't slums-these are multi-storey homes with families who've paid taxes and built lives. How can they be uprooted overnight?" he added. On June 2, the Supreme Court declined interim relief to 40 Batla House petitioners, directing them to other authorities, with a full hearing set for July after the court's summer recess. "We got a brief reprieve, but it's not enough," said AAP MLA Amanatullah Khan, urging families to apply for PM-UDAY regularisation. In Khizar Baba Colony, the Delhi High Court granted temporary relief on May 30, halting evictions for 115 families until an August 4 hearing. Lawyer Dr Farrukh Khan, representing them, noted the UP Irrigation Department's history of losing similar Okhla land disputes due to unproven ownership claims. Residents like Gulshana Khan, a mother of three, are gripped by uncertainty. "Our children go to school here. Losing everything is unthinkable," she said, her voice trembling. Mohammad Usman, a Muradi Road confectionery shop owner, added, "We have electricity bills, tax slips-everything. Why this harassment?" Fahemm Akhtar, a shopkeeper on Khasra 279, voiced economic fears: "People are scared, anxious. Crores of businesses are at stake. Where will families go with such high inflation?" Rizwan, a Khizar Baba Colony resident, emphasised the area's established nature: "Khasra 277 and 279 are lined with showrooms, five-to six-storey buildings, and a government hospital nearby. We've lived here for 70 years. There was never an issue. The Supreme Court's July hearing gives us hope, but demolishing this area contradicts public interest. This isn't a slum like Madrasi Camp near a drain - or other areas being demolished. Why target us?" The legal battle rests on claims of PM-UDAY eligibility and the Recognition of Property Rights Act, 2019. Residents argue their homes lie outside the Supreme Court's demolition zone and that authorities violated natural justice by omitting proper notice or hearings. "These are legitimate residents, not encroachers," said lawyer Sanjay Hegde, representing petitioners in the Supreme Court. "The DDA's actions lack fairness." With a narrow 20-foot road dividing Muradi Road and Khizar Baba Colony, residents brace for the fight to save their homes especially as Eid al-Adha approaches.
Business Recorder
23-05-2025
- Business
- Business Recorder
Forex reserves exceed $16bn mark on IMF tranche
KARACHI: Pakistan's total liquid foreign exchange reserves rose by $1.034 billion during the last week, supported by the release of a loan tranche by the IMF. According to the State Bank of Pakistan (SBP), with the arrival of IMF inflows, the country's total liquid foreign exchange has crossed the $16 billion mark and surged to $16.649 billion as of May 16, 2025 compared to $15.614 billion as of May 9, 2024. Previously, total liquid foreign exchange reserves touched the $16 billion mark in November 2024. During the week under review, SBP's reserves increased by $1.043 billion to $11.447 billion, up from $10.403 billion a week earlier. The current level of SBP's reserve is a 4-month high. The SBP received the 2nd tranche of SDR 760 million ($1.023 billion) from the IMF under the EFF program on May 13, 2025, of which the reserves have been increased. However, net foreign reserves held by commercial banks declined by $9 million to $5.202 billion at the end of the week. The IMF has also approved a Resilience and Sustainability Facility (RSF) program for Pakistan, granting access to approximately $1.4 billion (SDR 1 billion) to bolster the country's resilience to climate shocks and promote sustainable growth. This program is part of a broader agreement that includes a 37-month Extended Fund Facility (EFF) program, which provides $7 billion in financial support for Pakistan's economic recovery and stabilization. In addition, the release of the IMF tranche will also unlock inflows from other donors and international institutions. Jameel Ahmed, governor of SBP, has already projected that SBP's foreign exchange reserves will continue to build in the coming months and cross the $14 billion mark by June 2025, supported by sufficient foreign inflows. Copyright Business Recorder, 2025
Business Recorder
17-05-2025
- Business
- Business Recorder
April C/A posts $12m surplus
KARACHI: Pakistan's current account remained in surplus in April 2025, posting a modest $12 million surplus despite a higher import bill. Analysts had anticipated a deficit for the month due to a wider goods trade gap; however, the surplus was supported by strong $3.1 billion inflows of home remittances. In April 2025, goods imports rose by 17 percent to $5.237 billion, up from $4.448 billion in March. Meanwhile, exports remained nearly flat at $2.6 billion. The State Bank of Pakistan (SBP) on Friday reported that the country recorded a $12 million deficit in April 2025 compared to $315 million in April 2024, depicting a decline of 97 percent or 303 million on year-on-year (YoY) basis. The surplus in April 2025 is also lower than March 2025, in which the country registered a record surplus of $1.2 billion. March surplus was largely supported by record-high remittance inflows of $4.1 billion, the highest ever in a single month. However, cumulatively, Pakistan's external account is performing well driven by a rise in home remittance inflows, with the current account recording a surplus of $1.9 billion in the first ten months (July-April)of this fiscal year as against $1.337 billion deficit in the same period of last fiscal year (FY24). Analysts said overall surplus in current account is an encouraging development for the economy and will reduce the pressure on the external account. According to the SBP, current account surplus and the SBP's foreign exchange purchases partially cushioned the impact of large ongoing debt repayments on the SBP's foreign exchange Governor Jameel Ahmed is expecting that the country's foreign exchange reserves are likely to reach the $14 billion mark by the end of June 2025. The monetary policy committee of SBP has also observed that the moderation in import bill, mainly due to the reduction in global oil prices, along with the continued uptick in HVA-textile exports, also contributed to the current account surplus. According to the SBP statistics, Pakistan's goods trade deficit widened by 19 percent or $3.3 billion, reaching $21.343 billion during the first ten months of the current fiscal year, compared to $18 billion in the same period of last fiscal year. The increase in the deficit was driven by a rise in imports. Imports grew from $43.5 billion to $48.62 billion, while exports reflected a moderate improvement in performance increasing from $25.5 billion to $27.276 billion. On May 14, Pakistan has received $1.023 billion as tranche of IMF's Extended Fund Facility (EFF) program of $7 billion to build the foreign exchange reserves. In addition, the IMF Executive Board had approved an arrangement under the Resilience and Sustainability Facility (RSF), with access of about $1.4 billion (SDR 1 billion) for Pakistan. Analysts stated that these inflows will also contribute to improving the current account, which is projected to show a surplus of $2.5-3.0 billion, or 0.6-0.7 percent of GDP, by the end of this fiscal year. Copyright Business Recorder, 2025
