GO, is one of the leading retail and storage companies in Pakistan and a widely spread fuels, oils and lubricants stores operator. Competition Commission of Pakistan (CCP) agreed to a 40% equity stake of Aramco acquisition in GO Pakistan. Saudi Aramco, has completed the procurement of 40% stake in Gas & Oil (GO) Pakistan. Aramco’s worldwide retail development is picking up pace and this procurement is vital in next step on journey. Through pivotal partnership of Aramco with GO, high-quality goods and services of Aramco will be available to esteemed clients in Pakistan. The development in Aramco brand will lead to new horizon of resources and proficiency to be unlock new chances. In December 2023, Aramco signed conclusive contracts to acquire a 40% equity stake in GO Pakistan. Back then, economic experts greeted the progress as a positive for the cash-strapped South Asian country.
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Aramco Investment in GO Pakistan
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Upgraded IT Infrastructure of FBR
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The Federal Board of Revenue (FBR) is all set to upgrade its IT infrastructure, it will implement an automated income tax refund system and set up new data centers. ‘Findings and Recommendations of Committee for effective enforcement of Section 170A’ is the report submitted by FBR. The report said that the FBR is currently under a World Bank project involving the transformation of its IT infrastructure and setting up of new data centers to help simplify and streamline all associated service delivery aspects. This process also comprises issuance of income tax refunds. This is perhaps the most evident reserve in the way of execution of automated tax refunds process. Therefore, the use of IT technology, refunds can be processed more smoothly and proficiently. The report and recommendations appear fairly comprehensive, and these recommendations will be implemented in accordance with the World Bank.
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Pakistan’s trade deficit narrowed in the current fiscal year on the back of continued contraction in imports and some momentum in exports. The reduction in imports is progressively slowing down due to the minor easing of import limitations. There is now a prospect that the government may accomplish its annual target of export. The gap between exports and imports lower during the first 11 months of 2023-24 of the current fiscal year compared to a year ago was 15%, or $3.9 billion. Imports during the July-May period of 2023-24 reached to $49.8 billion, down $1.2 billion, or 2.4%. On a year-on-year basis, exports in May reached to $2.8 billion, higher by $595 million, or 27%, compared to the same month of last year, according to the national data collecting agency.
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The Trade Deficit – The Gap Between Exports and Imports
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As enlightened in Strategic Trade Policy Framework and Textiles and Apparel Policy, 2020-25, territorially competitive power tariff (US cents 7.5 to 9 per kWh all-inclusive) provided by the federal government to export oriented sectors to decrease their manufacturing cost and keep them internationally competitive. This resulted in the historically high level of export in FY 2022 of about $31.8 billion - an increase of 49% in comparison with FY20, whereas, in case of the largest manufacturing sector (i.e.; textiles and apparel), exports witnessed a development of 54% in FY22 as compared with FY20. After the withdrawal of incentives/ support schemes (including regionally competitive energy tariff), affected the momentum of increasing exports in FY23 and onward. Although, Pakistan managed to increase exports in FY24 (Jul-Apr) but mainly due to agricultural commodities (+59%). The main industrial export sectors of Pakistan are struggling to recuperate and an increase their lost stake in global markets. The uncompetitive and high business cost resulted in the lesser competitiveness in export and Small and Medium Enterprises (SMEs) are severely affected. Approximately 20% to 30 % production capacity is under-utilized in the key clusters and regular labor retrenchment to the tune of thousands is resulting in massive human misery.
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Subsequent to the momentous ingenuity to boost agricultural exports to regional countries, transportation of cherries to China has been commenced. Transportation of cherries to the China is all complied with necessary quality standards and by utilizing specialized refrigerated containers, transportation is ensuring the cherries’ freshness out the journey. The first shipment of carrying 6 tons of cherries successfully left Pakistan through via the Khunjerab Pass while next consignment is planned to depart from Gilgit-Baltistan next week. Following the successful delivery of the first shipment, there is a plan to maintain regular shipments of cherries to several Chinese cities, including Beijing, Shanghai, Guangzhou, and Huizhou. This initiative will not only progress the socio-economic situations of local growers but also contribute to the earning valuable foreign exchange for Pakistan.
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Agricultural Exports to Regional Countries
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Records Growth Robust in Agriculture Sector
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The agriculture sector in Pakistan, emerged as a savior for the outgoing fiscal year and witnessed robust growth in 2023-24, contributing 24% to the national GDP to the economy, with an overall increase of 6.25%. According to the Economic Survey the crops sub-sector saw a significant improvement compared to the previous year. The crops sub-sector saw a remarkable growth of 11.03%, within this sub-sector, important crops experienced a substantial growth of 16.82%. During 2023-24, cotton cultivation increased growth of 13.1%. Cotton now holds a 0.7% share in GDP and 2.9% in agriculture value addition. Sugarcane production slightly declined by 0.4% Its share in GDP is 0.8%, with 3.5% in agriculture value addition. Rice emerged as a promising crop increasing by 22.2%, it contributes 0.6% to GDP and 2.5% to agriculture value addition. Maize crop declined by 4.5%, shares 2.9% to agriculture value addition and 0.7% to GDP. Wheat saw an increase of 6.6% Wheat holds a 9.0% share in agriculture and 2.2% in GDP.
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Development in China and Pakistan’s information and communication technology infrastructure under the China-Pakistan Economic Corridor will be develop by Information Technology (IT) Industry, Joint Working Group (JWP). This group has intended to launch a China-Pakistan digital connectivity, strengthen investment cooperation in the digital economy, and support the development and execution of new digital technologies. This being a part of CPEC, objects to enhance digital corridor through amended fiber optic networks, expansion of 4G and the upcoming introduction of 5G networks cloud computing capabilities and data centers. These developments are expected to attract substantial Chinese investment, lift local startups, create job opportunities, and position Pakistan as a regional technology hub. In the survey conducted by The Pakistan Software Export Board (PSEB) it has been observed that the ICT sector in Pakistan has shown remarkable development. The ICT sector in Pakistan has shown notable progress and has registered over 20,000 IT and IT-enabled Services (ITeS).
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China-Pakistan Digital Corridor: Growth in IT and Telecommunication Sector
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With the inflation rate easing and the economy stability the policy rate has been decreased. The State Bank of Pakistan has set policy rate at 20.5%. This change would help condense the cost of borrowing for businesses and households and provide a change to the economic growth to pace up in the next fiscal year. The actual interest rate still remains significantly positive, which is important to continue guiding inflation to the medium-term target of 5 -7%. In the future monetary policy choices will continue data-driven and responsive to evolving changes associated to the inflation outlook.
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