Source: China Economic Net
1. Market performance
2. Important news
1. The State Bank of Pakistan (SBP) reported on July 29 that the repatriation of profits and dividends in Pakistan increased by 565% in fiscal year 2024 (July 2023-June 2024). Foreign investors repatriated $2.2 billion from profits and dividends, compared to $331 million in the previous fiscal year, an increase of $1.86 billion. Analysts said the repatriation of profits from foreign investors was the highest in six years as the State Bank of Pakistan allowed all unpaid dividends and profits to be settled.
2. According to the Pakistani media "Dawn", the global credit rating agency Fitch Ratings announced on July 29 that in view of the agreement between Pakistan and the International Monetary Fund (IMF), the agency upgraded Pakistan's long-term foreign currency issuer default rating (IDR) from CCC to CCC+. The upgrade reflects greater certainty about the continued availability of external funds under the framework of Pakistan's new 37-month, $7 billion Extended Financing Facility (EFF) with the IMF, the agency said.
3. The State Bank of Pakistan (SBP) announced on July 29 that it would cut its key policy rate by 100 basis points to 19.5% in light of improved external accounts, a surge in foreign exchange reserves, and better-than-expected inflation. This is the second consecutive rate cut, bringing the rate down by 250 basis points since June 2024. The newly announced policy rate will take effect on 30 July 2024 and will be assessed and decided on at the next MPC meeting in September this year.
4. A press release issued by the Federal Revenue Service (FBR) of Pakistan on July 31 said that Rs 659.2 billion in taxes had been collected in the first month of the 2024-25 financial year (July), exceeding the original target of Rs 65,600 crore. Of this, income tax of Rs 300.2 billion, sales tax of Rs 307.9 billion, Federal Excise tax of Rs 37.4 billion, customs duty of Rs 91.7 billion, and refunds to taxpayers totalling Rs 77.9 billion.
5. Data released by the Pakistan Bureau of Statistics (PBS) on August 1 showed that the country's consumer price index (CPI) rose 11.1% year-on-year in July 2024, slowing from the 12.6% increase in the previous month and down sharply from 28.3% in the same period last year. Excluding volatile food and energy prices, core inflation was 11.7 percent in urban areas and 16.9 percent in rural areas.
6. Pakistan's trade deficit in July 2024 increased by 19.7% to $1.95 billion from $1.63 billion in the same period last year, narrowing by 19.0% compared with the trade deficit of $2.41 billion in June 2024, according to data released by the Pakistan Bureau of Statistics (PBS) on August 1. Exports in July 2024 increased by 11.8% to $2.31 billion from $2.06 billion in the same period last year. The value of imports increased by 15.3% to $4.26 billion compared to $3.69 billion in the same period last year.
7. Pakistan's Ministry of Finance said on August 1 that three law firms and two credit rating agencies from China had tendered for the Pakistani government's plan to issue bonds in the Chinese market, and two local Pakistani law firms expressed their willingness to become Pakistani domestic legal advisers for bond issuance, after Pakistani Finance Minister Mohammad ·Aurangzeb had said that Pakistan would issue bonds totaling up to $300 million for the first time this year to attract Chinese investors.
8. Pakistan's State-owned Assets Management Commission (CCOP) approved the privatization of 24 state-owned enterprises on August 2, according to the Pakistani media newspaper The National. The meeting of the Committee was chaired by Pakistani Deputy Prime Minister and Minister for Foreign Affairs Ishaq ·. The CCOP recommends that priority should be given to reducing federal government involvement in the business sector and limiting it to strategic and critical state-owned enterprises. The CCOP also stressed that even profitable state-owned enterprises should consider privatization.
China Economic Net Data Center
August 5, 2024