Nationwide Updates

► ‘Wheat import not viable at current prices’

Traders said on Monday that wheat import was not viable at the current international price of about $380 per metric ton C & F without government’s subsidy. A wheat importer said that after including transport and other charges, the cost would come to about Rs28 per kg. “If milling cost of about Rs1.5 to 2 per kg is added to this price, the atta (flour) will be available at Rs29.50 to 30 per kg,” he added. He said that people were not willing to pay more than Rs20 per kg in the market. Who will buy atta at Rs30 a kg, he questioned. He said that people were not willing to pay more than Rs20 per kg in the market. Who will buy atta at Rs30 a kg, he questioned.  (Dawn)

► 50% decline in mango export likely amid oil price hike

The current ongoing slow paced export of mangoes is likely to continue and will fall by 50 percent as compared to previous year, exporters said Monday. This is attributed to enormous increase in airfreight charges and high prices of local mango yield.  “During last one month a steep decline of more than 30 percent was registered and there are clear indications that it will end up to 50 percent,” they said. Chairman All Pakistan Fruit and Vegetable Exporter Association (APFVEA), Abdul Wahid, informed Daily Times that last year Pakistan exported some 1,20,000 tonnes of mango and due to decline this season, country is likely to be deprived of $18 million to $20 million worth of foreign exchange.  (Daily Times)

► Package of relief for the poor

The budget for 2008-09 will offer Rs100 billion in relief to people in low-income groups, pensioners and salaried class, enhance old-age benefits and unveil an employment scheme. Dawn learnt on Monday that Saudi Arabia had agreed to provide a grant for the ‘Prime Minister’s Special Support Initiatives’. The grant will be in addition to the Saudi supply of oil on deferred payment. The budget will also include a 15 per cent increase in government employees’ salary. Public sector corporations have been asked to offer similar increases, especially to their low-grade employees.  (Dawn)

► Major economic indicators perform negatively in 2007-08 

All major economic indicators, Foreign Direct Investment (FDI), exports, Large Scale Manufacturing (LSM), saving and investment and tax collections witnessed negative growth in the outgoing fiscal year 2007-08.  Poor performance of agriculture and industry impacted the GDP growth negatively, however, the services sector rescued it to some extent. The government will release Tuesday (today) major economic indicators performance for the year 2007-08 in the Economic Survey of Pakistan. After launching the survey report, the Federal Finance Minister, Syed Naveed Qamar, would brief journalists.  (Daily Times)

► Nasty jolts to the economy

PAKISTAN’S economy received several nasty jolts in the last several months. Some were delivered by the developments over which the country’s policymakers did not have any control. These included the inexorable increase in the price of oil which has affected all oil-importing countries including Pakistan. There has also been an increase in the price of agricultural commodities Pakistan must import to meet domestic demand. These include wheat and oil seeds. There were other jolts to the economy for which policymakers must take full responsibility.  (Dawn)

► Fiscal highs and lows 

THE annual budget of a country reflects the built-in features of its fiscal system which evolves through historical processes, precedents and practices. An efficient and equitable fiscal system is one which helps achieve the basic economic objectives defined by a country for a given period of time. These objectives generally include ensuring a sustained growth of real GDP, maintaining a high level of employment, containing inflationary pressures, improving income and assets distribution, reducing mass poverty and accumulating adequate foreign exchange reserves.  (Dawn)

► Economists warn govt about fiscal discipline

Economists have warned the government not to waste any fiscal space provided by Pakistan’s foreign friends in extravagance. They advised the new economic managers to show more fiscal discipline than their predecessors. They agree that no democratic government could neglect the plight of its poor electorate that has been hit badly by rising food prices. Some of them, they added certainly need direct government intervention for their daily food needs. They said the easy way out of this impasse is to pass on the entire support that Pakistan is likely to get from its friends on to the poor, while continuing with the past practice of lavish expenditures.  (The News)

► Cement prices hit new peak

Cement prices have risen just before the budget and currently the price of various brands range between Rs290-325 as compared to Rs240-270 a month back. In absence of any check on the prices, manufacturers have been pushing up the rates without any fear at a time when construction activities are at peak ahead of the monsoon season. Falcon Cement is now selling at Rs325 per 50 kg bag at retail as compared to Rs300 a month back. In April it was selling at Rs290-295. Lucky cement is available at Rs300 while Pak Land and DG Khan cement sells at Rs320, Thatta and Javedan cement at Rs290. In April Lucky cement was selling at Rs275.  (Dawn)

► ‘Subsidy on oil not sustainable’

Pakistan would have to align its domestic oil prices with international prices as persistent payment of huge subsidy on oil is no more sustainable for country’s economy. “The epoch of cheap oil has passed, and Pakistan must devise short, mid and long-term strategies to absorb the sky-rocketing prices,” Pakistan Refinery General Manager Aftab Hussain told a TV channel. He said Malaysia had recently increased its oil prices by 41 per cent while India also increased prices by 10 per cent. “Now the situation in the country is the worst. The government is paying a sum of Rs44 per liter only on kerosene.  (Dawn)

► Inflation toughest challenge for economic managers

Preparing the upcoming budget for fiscal year 2008-09 is an uphill task for the PPP-led coalition government amid mounting problems which have already squeezed economic growth. Soaring oil and food prices, which have made the life the common people miserable, are the biggest challenge facing economic managers as they grapple with the fastest inflation in decades. The real and major factors behind the runaway inflation are shortages of commodities, especially wheat and flour, and unbridled hoarding. At the same time, shortages are exacerbated by smuggling of some grain products to countries in the region.  (The News)

► Food inflation: is there a way out?

Food inflation is creating a record of sorts as commodity prices continue to soar mercilessly. While the government remains engrossed in the issues regarding restoration of the judges, the rest of the country is severely submerged in energy crisis, power crisis, wheat and rice crisis, to name just a few, and this is without even mentioning the deteriorating law and order. An in-depth analysis of some of the major essential commodities highlights that prices of chakki flour, basmati rice, sugar, oil and ghee in the corresponding month of last year were Rs15 per kg, Rs60 per kg, Rs30 per kg and Rs498 per 5kg tin, respectively.  (The News)

► Summit on the oil price rise  

The G-8, comprising the 8 most industrialised nations of the world, plus 3 (including the remaining three major oil guzzlers of the world namely China, India and South Korea), met in Aomori, Japan to deliberate on a common strategy to deal with the oil crisis that has hit the world since July 2007. Interestingly the world's largest oil consumer, the United States, and the world's second largest oil producer, Russia, were present at the summit. Together these 11 countries consume two-thirds of the world's oil output. However none of the Middle Eastern countries, or other members of the Opec cartel, including Saudi Arabia, the largest oil producer, were represented.  (Business Recorder)