Day: February 8, 2022

Business optimism has declined across the board in Pakistan, with the trading sector registering the biggest decline in optimism.

This was the conclusion of Dun and Bradstreet Pakistan’s ninth edition of the “Business Optimism Index” (BOI) report for the fourth quarter of 2021 (4Q2021). The BOI declined after increasing consecutively for the previous three quarters, indicating a decline in optimism among the business community regarding the performance of their business in 1Q2022.

The BOI registered 143.9 points in 4Q2021 compared to 154.2 points in 3Q2021, indicating a decline of 6.7 percent decline quarter-on-quarter (QoQ). However, the BOI has improved by 7.9 percent compared to the same period last year.

The report said that the decline in optimism was driven by the overall downtrend in the macroeconomic indicators.

“High inflation rate of 12.3 percent in December 2021, the widening of the current account deficit by 57.9 percent, increased policy rates from 7.25 percent to 9.75 percent, depleting foreign exchange reserves from $25.6 billion to $24 billion, and depreciation of the Pakistani Rupee against the US Dollar by 4.5 percent during Q4 2021, may have affected the business community and impacted their business outlook,” the report noted.

The sector-wise comparison showed that the trading sector BOI exhibited the highest decline of 18.7 percent QoQ, the BOI declined from 160.9 in 3Q2021 to 130.9 in 4Q2021. However, the index increased by 5.3 percent year-on-year (YoY). The report attributed the decline to COVID-19 related supply chain disruptions in anticipation of the spread of the Omicron variant in 1Q2022.

The manufacturing sector index decreased by 3.5 percent QoQ, the BOI declined from 147.0 in 3Q2021 to 141.8 in 4Q2021. However, the index increased by 8.0 percent YoY. Similarly, the services sector index decreased by 4.4 percent QoQ, the BOI declined from 157.1 in 3Q2021 to 150.2 in 4Q2021. However, the index increased by 5.3 percent YoY.

The index-wise comparison showed that large business BOI declined from 162.5 in 3Q2021 to 146.2 in 4Q2021. The report attributed the decline to the outbreak of the Omicron variant, and an increase in inflation and policy rates, which is likely to affect the overall consumer demand in the next quarter.

The small and medium enterprises (SMEs) index decreased marginally to 140.5 in 4Q2021 from 141.9 in 3Q2021. The report noted that over 40 percent of SMEs and large companies cite the increase in inflation and interest rates as the key challenge to business growth.

The exporter’s index also declined marginally from 155.0 in 3Q2021 to 154.0 in 4Q2021. The USA, UK, and UAE were identified as top export destinations for businesses.

‘Inflation and high-interest rates’ replaced ‘business disruptions due to COVID-19’ as the top challenges in Q42021 after the latter being at the top for the six previous quarters, the report noted. The rising cost of utilities, less demand for products & services, business regulations, the availability of skilled labor, higher completion, exchange rate fluctuation, government taxes, and high cost of finance are among the other challenges.

Source: Pro Pakistani

Federal Minister for Industries and Production Makhdum Khusro Bakhtyar Tuesday directed the Ministry of National Food Security & Research to chalk out a subsidy mechanism along with the Ministry of Industries and Production for the provision of DAP fertiliser to farmers at affordable prices.

The minister, who was chairing a high-level fertilizer review meeting, said global prices of phosphoric acid and ammonia used for DAP production have gone up unprecedentedly in the international market.

The meeting discussed the availability and demand of DAP and its substitutes for the coming Kharif season. The chair was briefed that the country is reliant on imported DAP as local production accounted for only 30 percent of the demand. The demand for DAP in Rabi and Kharif season is 2.2 million tons.

The meeting was also told that due to the high price differential, DAP applications witnessed a 17.7 percent decline as compared to urea in this Rabi season.

The minister emphasized that the incumbent government is committed to the welfare of farmers and would make all efforts to ensure that the farmers do not have to face the brunt of the price rise.

The meeting concluded with guidelines for the subsidy framework to be submitted to the forum in the next meeting. Federal Minister for National Food Security and Research Syed Fakhar Imam joined the meeting through a video link. Other participants included a representative of the fertilizers manufacturing industry, importers and officials of provincial departments.

Source: Pro Pakistani

The Competition Commission of Pakistan (CCP) and the Pakistan Institute of Corporate Governance (PICG) on Tuesday signed a Memorandum of Understanding (MoU) on cooperation, collaboration, and capacity development for strengthening corporate governance and competition compliance in Pakistan.

The MoU was signed by the CCP Chairperson Ms. Rahat Kaunain Hassan and PICG Chief Executive Officer Ahsan Jamil in a ceremony at the CCP’s head office in Islamabad. The ceremony was also attended by Chairperson PICG Board of Directors Dr. Shamshad Akhtar, CCP members Shaista Bano, Bushra Naz Malik, Mujtaba Ahmad Lodhi, and other senior officers.

Addressing the occasion, the CCP Chairperson welcomed the support of PICG in joining hands with the CCP through the signing of the MoU. She stated that corporate governance and competition principles are intertwined. There is a commonality of objective in that both regulate human behavior and promote fair play, she added.

She further stated that the collaboration aims to promote good governance, ensure corrective behavior and sustainable compliance through advocacy measures and training for the corporate sector. In the face of the increasing complexity of corporate arrangements, this would help create awareness of the internal and external drivers of collusion or anti-competitive practices. It would also enable the corporations towards better strategic planning, she added.

Dr. Shamshad Akhtar, in her remarks, said that the PICG board has envisioned bringing a new dynamism in the PICG to improve corporate governance in Pakistan. She welcomed the signing of MoU between PICG and CCP, saying that the prevailing conditions in public and private sectors require more such partnerships. “I am delighted to have the opportunity to work with the Competition Commission of Pakistan. This MoU will greatly help to reinforce the respective mandates of CCP and PICG,” she said.

Ahsan Jamil in his remarks said that the importance of free and fair competition for productivity, exports growth and global competitiveness cannot be overstated. Similarly, good corporate governance is beneficial for businesses as it reduces cost, ensures fair play and protects businesses from undesirable outcomes. PICG is looking forward to working with CCP in promoting good corporate governance and competition law compliance. He mentioned several initiatives that PICG is taking to improve corporate governance in Pakistan.

The MoU will not only allow both parties to exchange information on pertinent issues, but also work together in undertaking advocacy, research, and training initiatives to promote public awareness of the Competition Act and the Listed Companies (Corporate Governance) Regulations, 2019.

The collaboration aims to improve awareness of the competition law landscape and a commitment to compliance within organizations. Furthermore, both parties will hold collaborative sessions on competition law, promoting compliance and organizational governance, and assist each other in matters of mutual interest for better implementation of their respective mandates.

Source: Pro Pakistani

The Ministry of Commerce has amended the Export Policy Order 2020 to allow the export of 14 other items to Afghanistan in Pakistani Rupees (PKR) through the land route.

The Ministry of Commerce has issued a notification to implement the decision of the Economic Coordination Committee of the Cabinet which was taken last month. The decision was taken on humanitarian grounds to extend support to the Afghan government that has been facing a severe shortage of foreign reserves.

According to the latest notification, the items allowed for exports in local currency to Afghanistan are rice, fish and fish products, poultry, meat and products, sugar confectionery and bakery products, fruit, nuts and other edible parts of plants, oil cake and other solid residues, vegetable materials and vegetable waste, salt, cement, pharmaceuticals, matches, textile and textile articles, building stone and surgical instruments.

Currently, Pakistani exporters are allowed to export only four items that include fruits, vegetables, dairy products and meat to Afghanistan in PKR.

After the decision, Pakistani exporters can export 18 items to Afghanistan in Pak Rupees.

It is pertinent to mention here that Pakistan’s exports to Afghanistan are in declining mode as they fell to $328 million during the first half of the current fiscal year from $517 million during the same period of the last fiscal year.

Source: Pro Pakistani