Source: China Economic Net
1. Market performance
2. Important news
1. In the first 11 months of the upcoming 2024 fiscal year (July 2023 to May 2024), the government's total borrowing has exceeded the sum of the previous two fiscal years, according to a report by Pakistani media Dawn on June 25. The large amount of borrowing, coupled with interest rates as high as 22 per cent, suggests that the debt servicing burden will increase significantly and may exceed the budget estimates for the upcoming fiscal year. According to the central bank, the government borrowed a total of Rs 73,900 crore between July 2023 and June 2024 (there are 23 days of borrowing data yet to be released). Bankers believe that the total amount borrowed could reach Rs 8 trillion by June 30.
2. Pakistani media The CPEC Portal reported on June 25 that Pakistan's Investment Commission Minister Abdul Aleem Khan and Commerce Minister Jam Kamal Khan chaired a high-level meeting in Islamabad to assess the progress of the investment agreement from China. The meeting reviewed the progress of 30 memorandums of understanding (MoUs) signed by 107 Pakistani and 250 Chinese business groups during Abdul Alim Khan's recent visit to China. Abdul Alim Khan stressed the importance of launching the joint venture quickly and suggested that the Chinese Embassy in Pakistan facilitate business meetings between the two countries.
3. According to a report by Pakistani media The National on June 26, the Central Control Unit (CMU) under the Ministry of Finance of Pakistan pointed out in its "Federal State-Owned Enterprise (SOE) Comprehensive Annual Report for Fiscal Year 2023" that "the total profit of state-owned enterprises was 703 billion rupees, while the cumulative loss reported by loss-making state-owned enterprises was 905 billion rupees, an increase of 23% from last year." This resulted in a cumulative net loss of Rs.202 billion, up 25 per cent from the previous year. ”
4. Pakistani Prime Minister Shehbaz Sharif said on June 26 while chairing a high-level meeting on the Investment Promotion Board in Islamabad that promoting domestic and foreign investment in Pakistan is the government's top priority, according to the Pakistan Broadcasting Corporation. He has approved a joint venture between Chinese and Pakistani companies aimed at transferring Chinese industry to Pakistan. He also asked for a comprehensive report on the progress of the memorandum of understanding signed in Shenzhen between Pakistani and Chinese companies during his visit to China.
5. According to data released by the State Bank of Pakistan (SBP) on June 27, foreign investors repatriated profits and dividends in May 2024 reached a record $918 million, an increase of 1,522% from $56.6 million in April. Most of the funds were repatriated through foreign direct investment (FDI) accounts, amounting to approximately $887.5 million, while foreign portfolio investment (FPI) was approximately $30.5 million. In the first 11 months of fiscal 2024 (July 2023-May 2024), foreign investors repatriated a total of $1.81 billion, up 476% year-over-year.
6. According to data released by the State Bank of Pakistan (SBP) on June 28, as of May 2024, Pakistan's official reserve assets, including foreign exchange reserves, IMF reserve positions, special drawing rights (SDRs), gold and other reserve assets, totaled $15.132 billion, an increase from $15.05 billion in the previous month. Among them, the total foreign exchange reserves are about 5.2 billion US dollars, gold is about 4.88 billion US dollars, special drawing rights are about 970 million US dollars, the reserve position is 160,000 US dollars, and other reserve assets are about 4.07 billion US dollars.
7. Pakistan's Ministry of Finance said in its monthly economic report and outlook on June 28 that fiscal year 2024 will end with economic stability, while macroeconomic indicators will also improve. "The easing of inflationary pressures, the stabilization of external accounts and exchange rates, fiscal consolidation, and the gradual recovery of industrial activity are restoring the confidence of economic agents, thereby boosting economic growth," and "looking ahead, Pakistan's growth outlook is expected to remain encouraging." The FY2025 budget is moving toward a shift to an era of sustainable and inclusive growth. To this end, the government is focusing on high-potential sectors such as IT, SMEs, mining and minerals, tourism, exports, and agriculture. These sectors can pay handsome dividends and support the country's balance of payments. ”
China Economic Net Data Center
July 1, 2024