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Business Recorder
a day ago
- Business
- Business Recorder
‘Lowest in 9 years': Pakistan agriculture sector projected to grow only 0.56% in FY25
Pakistan's agriculture sector will grow marginally by 0.56% in the financial year 2024-25, as per the provisional data unveiled in the Economic Survey for FY25, against 6.40% growth recorded in the sector in 2023-24. The growth in the FY25 would be the 'lowest in 9 years', Topline Research said in a statement. 'Agri sector is expected to post lowest growth of 0.56% in 9 years (FY16: +0.41%) vs. 5 years avg. growth of 3.38%,' it said. The lower growth was attributed to decline in important crops production and cotton ginning by 13.5% and 19.0%, respectively. While other crops posted growth of 4.78%, livestock, forestry and fishing are expected to post growths of 4.72%, 3.03% and 1.2% respectively. On the other hand, important crops and cotton are expected to post declines of 13.49% and 19.03%, respectively. 'The crop sub-sector witnessed negative growth as a result of weather-related adverse challenges,' read the Economic Survey. 'Overall, the agriculture sector in FY25 showed a combination of resilience and challenges across its sub-sectors. The growth trend emphasizes the sector's enduring importance, while also highlighting the urgent need for modernisation, climate adaptation, knowledge enhancement, and productivity improvements to sustain its contribution to economic growth and social well-being.' In the Kharif 2024 season, water availability was 60.5 million acrefeet (MAF), lower than average system usage and Kharif 2023. For Rabi 2024-25 water availability remained at 29.4 MAF. The Rabi season observed reduced rainfall, while the Kharif season saw above-average rainfall, according to the survey. Agriculture in South Asia is shaped by a shared agro-climatic context, but countries vary in crop priorities due to policy choices, market demands and natural resource endowments. The Economic Survey said the country's cotton ginning sector showed volatility and cyclical patterns in the last six years. In FY 2025, the sector witnessed a contraction of 19.03% over exceptional growth of 47.23% the previous year. 'This decline reflects underlying structural challenges, adverse weather conditions and pest outbreaks.' To address challenges in the sector, the survey mentioned that the government is pursuing a 'multi-pronged approach focused on improving irrigation efficiency, advancing seed sector reforms, scaling up digital agriculture initiatives, and strengthening R&D and extension services'. 'These measures are essential not only for short-term stability but also for fostering a resilient, self-sustaining agriculture sector capable of driving inclusive economic growth and rural transformation,' the Economic Survey said. 'Agriculture in South Asia is shaped by a shared agro-climatic context, but countries vary in crop priorities due to policy choices, market demands and natural resource endowments.' Last week, Pakistan Kissan Ittehad Council (PKIC) President Khalid Mehmood said the agriculture sector witnessed a dramatic slowdown in the FY25, as he claimed that the farmers collectively suffered losses of around Rs2.2 trillion in wheat alone Khokhar stated that since May 2024, farmers have collectively suffered losses of around Rs2,200 billion in wheat alone — equivalent to 23.15% of the crop sector's contribution to gross domestic product (GDP) for the fiscal year 2023–24. The resulting financial strain had weakened farmers' purchasing power and affected the productivity of other crops as well, he said. PKIC has also warned the government against imposing general sales tax (GST) on agricultural inputs in the upcoming budget, stating that such a move would deal a final blow to the already struggling agricultural sector and further damage the national economy.
Business Recorder
22-05-2025
- Business
- Business Recorder
Budget 2025-26: Pakistan govt likely to bring YouTubers, freelancers into tax net
Pakistan government is projected to impose new taxes including on the income of freelancers, vloggers, and YouTubers, aiming to raise additional taxes worth around Rs500-600 billion in the upcoming budget for the financial year 2025-26, according to a research report issued on Thursday. In its report titled 'Pakistan Federal Budget FY26 Preview', Topline Research said the government was expected to give a revenue collection target of Rs14.1-14.3 trillion to the Federal Board of Revenue (FBR), showing a year-on-year growth of 16-18% in tax collection in FY26 compared to FY25. Out of this required 16-18% growth, 12% would be achieved through autonomous growth driven by real gross domestic product (GDP) growth of 3.6% and inflation of 7.7%. 'The remaining 4-5% growth translates into additional tax measures of Rs500-600 billion,' the report estimated. The budget presentation for FY26 is scheduled for June 2, 2025. Various institutions have recommended government for taxing income from social media platforms like YouTube, Tiktok amongst others. The initial proposal by the Institute of Cost and Management Accountants of Pakistan (ICMAP) was to implement tax rate of 3.5% on social media income. The institute expects additional collection of Rs52.5 billion (from social platforms), the report mentioned. Tax on pensioners Besides, the government is contemplating to impose a tax rate on pensioners in range of 2.5-5% on monthly pension of over Rs400,000 per month, the report said, citing media reports. Last year, the government also tried to consider taxing this area. 'However, we believe, in FY26 budget government will impose a tax, aiming to raise Rs20-40 billion from this.' In the first nine month of the ongoing fiscal year 2024-25, Pakistan has already spent Rs673 billion on pension cost, annualising to Rs0.9-1 trillion, the report said. The Pakistan Bureau of Statistics (PBS) has already adapted a key measure wherein GST (general sales tax) on few commodities would be calculated based on the prices published by it. For example, in case of sugar, the GST was being calculated on Rs72.22 per kg while the market price surged to Rs150/kg. This change in base for GST calculation can fetch additional Rs70-80 billion annually. 'We expect this change to be incorporated in FY26 finance bill.' Tax on ultra processed food items (health tax) is widely being circulated to 'bring health awareness and to reduce prevalence of obesity, type 2 diabetes, stroke, dental caries, cardiovascular disease and blood pressure'. As a first step, the government is planning to increase FED (federal excise duty) on such items (like biscuits snacks) by 20% with objective to take total FED to 50% by FY29. 'We expect government to impose this tax in addition to increase in FED on cigarettes as well.' The government has informed the International Monetary Fund (IMF) regarding removal of non-filer category. It has submitted a bill to the parliament, which if approved will restrict non-filers from engaging in key economic transactions such as vehicles and real estate purchase, according to the report. The bill was taken under discussion by Senate committee and there were some technological changes required in FBR system to effectively implement this. 'We believe, this section 114C would be introduced in budget, however, after the debate, some changes in threshold levels or some relaxation in year 1 of its implementation cannot be ruled out.' The government has also informed the IMF to considering imposing petroleum development levy (PDL) on furnace oil (FO) in addition to the levy already collected on petrol and diesel, Topline Research said. Furthermore, the government also plans to increase PDL by Rs5/liter on petrol and diesel (HSD) in form of carbon tax to be implemented gradually in 2 years. 'If this is implemented, we believe government can collect additional Rs35-80 billion from PDL on FO sales assuming no changes on GST front and PDL imposed is in range of Rs40-78/liter.' 'IMF has assigned to collect a minimum Rs295 billion from retailers in the first half of FY26 (till Dec 2025) and has also added this as Indicative Target. We believe, government will take steps like increase in advance taxes on distributors etc to satisfy this IMF requirement,' the report said. In October 2024, IMF report mentioned some tax measures for Pakistan including increase in FED by 5% on fertiliser and pesticide. 'With this step, government can raise incremental amount of over Rs30 billion it estimated. 'In our view, likelihood of increase in FED on both the products is high since this is IMF requirement.' Among other tax measures, elimination of concessionary or reduced GST rate on remaining products is 'highly likely', removal of exemptions for FATA/PATA region is likely, implementation of agriculture income tax is likely by provincial governments, and increase in GST on luxury items like appliances aircraft, ships, jewellery, cosmetics, cigarettes, high-end mobile phones is also expected in FY26 budget. In addition to this, the government is considering giving tax relieves to salaried people and real estate sector, reduce duties on import of vehicles or relaxation of age limit from 3 years to 5 years, and announce subsidy on housing finance, the report said.
Business Recorder
15-05-2025
- Business
- Business Recorder
7 Pakistani cos added to MSCI FM & SC Indexes
KARACHI: Morgan Stanley Capital International (MSCI) has added seven Pakistani companies to its Frontier Market (FM) and Small Cap Indexes in its latest semi-annual index review, boosting the country's global equity market visibility. Morgan Stanley Capital International (MSCI) is a global research, data, and technology company that provides indices, research, and other services to investors worldwide. As per details cited by Topline Research, the minimum threshold for free float and total market capitalization for selection in the Frontier Market Index was set at $78 million and $155 million, respectively. Three Pakistani companies — Fauji Cement Company, DG Khan Cement Company, and Maple Leaf Cement — have been added to the MSCI Frontier Markets Index, effective from May 30, 2025. This brings the total number of Pakistani companies in the index to 26. Pakistan's weight in the MSCI Frontier Market Index is estimated to be around 6-6.5%, with the addition of the three cement companies expected to attract inflows of $5-8 million, assuming $2-3 billion in funds tracking the index globally. In the Small Cap Index, four Pakistani stocks have been added: Archroma Pakistan, At-Tahur Limited, Engro Polymer & Chemicals, and Pakistan Reinsurance. DG Khan Cement has been moved to the main FM Index, while AGP Pharma and Agritech Limited have been deleted. Topline Research noted that Interloop, Searle Limited, and Abbott Laboratories have been retained in the index despite not meeting the $78 million free float threshold, thanks to the buffer rule. This rule allows for flexibility in index inclusion. The firm drew parallels with a similar past instance where TRG was retained despite not meeting the threshold, only to be removed in a subsequent review. The index review holds particular significance for Pakistan as it continues to rebuild investor confidence following its 2021 downgrade from Emerging Market to Frontier Market status. The inclusion is anticipated to attract moderate passive fund inflows and enhance the visibility of Pakistani equities among global frontier market investors. Copyright Business Recorder, 2025
Business Recorder
14-05-2025
- Automotive
- Business Recorder
April car sales down 5pc MoM in Pakistan
KARACHI: Pakistan's car sales declined 5 percent month-on-month but managed a slight one percent year-on-year increase, supported by a stable macroeconomic environment, lower interest rates, easing inflation, and improving consumer sentiment. The statistics released by the Pakistan Automotive Manufacturers Association (PAMA) revealed that car sales reached 10,596 units in April 2025, posting a marginal one percent year-on-year increase but declining five percent month-on-month. The monthly drop was largely due to highway closures in Sindh, which caused delivery delays and impacted sales. According to Topline Research, on the other hand, yearly sales growth is supported by a more stable macroeconomic environment, lower interest rates, easing inflation, and improving consumer sentiment. Moreover, the new model launches and variant introductions played an important role in attracting demand. Pakistan car sales fall 8% MoM in March 2025 Compiled data said that the total sales in the first ten months of last fiscal year (10MFY25) surged to 111,464 units which is a 40 percent higher than the previous year that was 79,596 units in the first ten months of the last year (FY24). According to PAMA's data, Sazgar Engineering (SAZEW) experienced the largest monthly sales drop, plummeting 42 percent to 549 units in April 2025. However, on a cumulative basis, the company saw a 130 percent year-over-year surge in sales to 8,576 units in the first ten months of the fiscal year, driven by the popularity of the Haval brand in Pakistan. In contrast, Pak Suzuki Motor Company (PSMC) sales dropped 12 percent month-over-month and 33 percent year-over-year to 4,003 units in April 2025. Meanwhile, Honda Atlas Cars (HCAR) achieved significant growth, rising 20 percent month-over-month and 70 percent year-over-year to 1,707 units. Indus Motor Company (INDU) sales rose 58 percent year-over-year and 4 percent month-over-month, while Hyundai Nishat increased 9 percent year-over-year but fell 5 percent month-over-month. The 2- and 3-wheeler segment saw significant growth, with sales surging 26 percent year-over-year and 6 percent month-over-month to 135,721 units in April 2025, driven by improved purchasing power amid lower inflation. This pushed 10MFY25 sales to 1.2 million units, a 30 percent year-over-year rise. In contrast, tractor sales plummeted 48 percent year-over-year to 1,602 units due to weak farm economics. On a more positive note, truck and bus sales jumped 127 percent year-over-year and 13 percent month-over-month to 520 units, taking 10MFY25 sales to 3,885 units, an 85 percent rise from 2,098 units in the first ten months of last fiscal year (FY24). Analysts noted that looking ahead, the auto sector is expected to maintain its momentum, supported by interest rate cuts, a stable rupee, and new model launches, following a strong rebound in the current fiscal year. Copyright Business Recorder, 2025
Business Recorder
14-05-2025
- Automotive
- Business Recorder
April car sales down 5pc MoM
KARACHI: Pakistan's car sales declined 5 percent month-on-month but managed a slight one percent year-on-year increase, supported by a stable macroeconomic environment, lower interest rates, easing inflation, and improving consumer sentiment. The statistics released by the Pakistan Automotive Manufacturers Association (PAMA) revealed that car sales reached 10,596 units in April 2025, posting a marginal one percent year-on-year increase but declining five percent month-on-month. The monthly drop was largely due to highway closures in Sindh, which caused delivery delays and impacted sales. According to Topline Research, on the other hand, yearly sales growth is supported by a more stable macroeconomic environment, lower interest rates, easing inflation, and improving consumer sentiment. Moreover, the new model launches and variant introductions played an important role in attracting demand. Pakistan car sales fall 8% MoM in March 2025 Compiled data said that the total sales in the first ten months of last fiscal year (10MFY25) surged to 111,464 units which is a 40 percent higher than the previous year that was 79,596 units in the first ten months of the last year (FY24). According to PAMA's data, Sazgar Engineering (SAZEW) experienced the largest monthly sales drop, plummeting 42 percent to 549 units in April 2025. However, on a cumulative basis, the company saw a 130 percent year-over-year surge in sales to 8,576 units in the first ten months of the fiscal year, driven by the popularity of the Haval brand in Pakistan. In contrast, Pak Suzuki Motor Company (PSMC) sales dropped 12 percent month-over-month and 33 percent year-over-year to 4,003 units in April 2025. Meanwhile, Honda Atlas Cars (HCAR) achieved significant growth, rising 20 percent month-over-month and 70 percent year-over-year to 1,707 units. Indus Motor Company (INDU) sales rose 58 percent year-over-year and 4 percent month-over-month, while Hyundai Nishat increased 9 percent year-over-year but fell 5 percent month-over-month. The 2- and 3-wheeler segment saw significant growth, with sales surging 26 percent year-over-year and 6 percent month-over-month to 135,721 units in April 2025, driven by improved purchasing power amid lower inflation. This pushed 10MFY25 sales to 1.2 million units, a 30 percent year-over-year rise. In contrast, tractor sales plummeted 48 percent year-over-year to 1,602 units due to weak farm economics. On a more positive note, truck and bus sales jumped 127 percent year-over-year and 13 percent month-over-month to 520 units, taking 10MFY25 sales to 3,885 units, an 85 percent rise from 2,098 units in the first ten months of last fiscal year (FY24). Analysts noted that looking ahead, the auto sector is expected to maintain its momentum, supported by interest rate cuts, a stable rupee, and new model launches, following a strong rebound in the current fiscal year. Copyright Business Recorder, 2025
