Nationwide Updates

► G8 hopes breaking of WTO impasse

World leaders at a summit of the Group of Eight industrialised powers voiced hope on Wednesday of a breakthrough in stalled talks to tear down global trade barriers. World Trade Organisation head Pascal Lamy has called a meeting for July 21 of ministers from the main players to try to breathe new life into the long-running negotiations involving the 152 WTO member countries. British Prime Minister Gordon Brown said he believed Latin American powerhouse Brazil was “key to a deal”.  (Dawn)

► Private sector facilitated to export bulk cement

The Karachi Port Trust, as part of its landlord port strategy, has facilitated the private sector to export bulk cement. The bulk cement exporters would directly pump and load bulk cement in ships, according to KPT sources. Thirty bulkers, having a maximum loading capacity of 6000 tons per day, commenced operations from Karachi Port. The port provides a platform to cement manufacturers to export cement to global markets in a cost-effective manner to meet the increasing demands world over.  (Dawn)

► Trade deficit zooms to $20.74 billion

Pakistan’s economy racked up another all-time high trade deficit, as during fiscal year 2007-08, the gap between what the country sells abroad and what it imports zoomed to a massive $20.74 billion, the Federal Bureau of Statistics (FBS) said on Wednesday. Previously, the figure confounded predictions that the deficit would diminish with the weakening of the rupee. Instead, the trade gap has created increased pressure for the rupee to drop even further. The other day, rupee dropped to its lowest. This has also confronted the government with the dilemma of balancing its financial accounts. The depreciating Pakistani rupee and record high inflation are the two big monsters.  (The News)

► The tsunami of economic woes continues to build in strength

Industries warning of bankruptcy, a tanking rupee and a bearish stock market along with soaring prices all form a looming threat to the Pakistani economy. As the national treasury struggles to pay down costly subsidies in electricity, petrol, food and gas, more people and industries are finding survival tougher. Faced with these interrelated crises, finding a way out is harder every passing day the problems in the economy reinforce and strengthen each other. Facing growing deficits, governments saw no choice but to cut subsidies and raise the prices of electricity.  (Business Recorder)

► Back to forex controls  

The State Bank of Pakistan, late on Monday evening, announced a series of administrative measures to stabilise the rupee-dollar parity. The withdrawal of 35 percent cash margin on non-essential imports - commenced the rupee slide, with banks rushing to the interbank market to meet the pent-up demand of their importing clients. Seeing erosion in the rupee value, the exporters held back their proceeds, thus increasing the gap between the two cash flows, resulting in rupee depreciation of 6.6 percent in the very first week of the new financial year.  (Business Recorder)

► Fall of the rupee

INFLATION is bad because it spikes prices of essentials and makes the people lose confidence in their currency. That is exactly what has been happening in this country for some months now — prices are climbing across the board, and public trust in the currency and economy is declining. The rupee, which lost 6.6 per cent of its value in the first eight days of the new fiscal to sink to just below 74 to a dollar on Tuesday, required yet another series of ‘stabilisation measures’ from the State Bank of Pakistan to recover some lost ground.  (Dawn)

► Pakistan could tighten monetary policy further to fight inflation

Pakistan is ready to tighten monetary policy further to fight inflation, a senior finance official said on Wednesday, stressing the authorities’ commitment to getting inflation down from a three-decade high above 19 per cent. “Some people argue that further monetary tightening may not be very useful, but the whole problem is that we are not willing to compromise on inflation,” said Hina Rabbani Khar, special assistant to the prime minister on finance and economic affairs. “So if that requires more tightening, yes,” she told Reuters in an interview in the Malaysian capital, Kuala Lumpur. Many analysts believe an interest rate rise is imminent, but she declined to comment.  (The News)

► Japanese investment in Gwadar sought

Pakistan on Wednesday sought Japanese investment by presenting Gwadar port as an ideal location, where it can explore possibilities of investment in fields like petrochemicals, heavy engineering, food processing, metal works, steel products and other export-oriented industries. Mian Manzoor Ahmad Wattoo, Adviser to the Prime Minister/Minister for Industries, Production and Special Initiatives in a meeting with the Ambassador of Japan Seiji Kojima, who called on him here, stated Pakistan was strategically located as a regional hub with abundant land and natural resources, strong human resources and large and growing domestic market.  (The News)

► World Bank refuses to fund free energy savers plan  

The World Bank has refused to finance the government plan to distribute free energy savers among the consumers of Pakistan Electric Power Company (Pepco), well-placed sources told Business Recorder. The project was approved by caretaker Prime Minister Mohammadmian Soomro in February this year and Prime Minister Yousaf Raza Gilani. In his maiden speech in the National Assembly, pledged to provide 10 million energy savers free of cost, as per a distribution criteria that was yet to be drafted. Pepco has already distributed 12,500 energy savers as a pilot project to public sector organisations and hospitals.  (Business Recorder)