KARACHI: Pakistan’s central bank on Thursday further slashed key policy rate by 100 basis points to 7 percent citing continued economic slowdown and increasing downside risk to country’s growth.
The central bank’s move to cut the interest rates comes in an unscheduled meeting of Monetary Policy Committee which has so far slashed the key interest rate by 6.25 percent from 13.25 percent since March 17, 2020.
“The decision reflected the MPC’s (Monetary Policy Committee) view that the inflation outlook has improved further, while the domestic economic slowdown continues and downside risks to growth have increased,” the State Bank of Pakistan (SBP) said.
The SBP said that priority of monetary policy had appropriately shifted toward supporting growth and employment during these challenging times.
“The MPC re-asserted its commitment to supporting households and businesses through the Covid-19 crisis and minimizing damage to the economy. In this context, the MPC felt that from a risk management point of view, a prompt response to downside risks to growth was called for given the improved inflation outlook,” the statement read.
The central bank noted that with approximately Rs. 3.3 trillion worth of loans due to be re-priced by early July 2020, this was an opportune moment to take action from a monetary policy transmission perspective. “In this way, the benefits of interest rate reductions would be passed on in a timely manner to households and businesses.”
The central bank observed that “the moderation of underlying inflation has continued”. The headline inflation declined further to 8.2 percent in May on the back of the recent cut in diesel and petrol prices.
The fiscal budget 2020-21 is also expected to be neutral for inflation as the freeze on government salaries, absence of new taxes, and lower production cost from reduced import duties should offset the decline in subsidies in some sectors. Given the absence of demand-side pressures, average inflation could fall below the previously announced range of 7-9 percent for next fiscal year.
On the real side, the decline in LSM (Large Scale manufacturing) deepened to 41.9 percent (y/y) in April, when lockdowns were still in place. In May, high-frequency indicators of activity such as cement dispatches, automobile sales, food and textile exports, and POL sales also continued to contract, although mostly at a lower rate than in the previous two months.
Looking ahead, the economy is expected to recover gradually in the current fiscal year supported by easing lockdowns, supportive macroeconomic policies and a pick-up in global growth. However, risks are skewed to the downside and the recovery will depend critically on the evolution of the pandemic both in Pakistan and abroad.
Pakistan’s industrialists, who have been calling for reduction in the key interest rates, have welcomed the move of central bank and called for further cuts in the current pandemic.
“There is more space for the interest rate cuts. Our demand is that the rates should be slashed to 5 percent or below”, Sheikh Sultan Rehman, Vice President of Federation of Pakistan Chambers of Commerce and Industry FPCCI, told Arab News. “The coronavirus has exerted massive negative impacts on our economy and the global economy which means the room to cut the rate still exists and the bank should exercise this option”, he added.
The International Monetary Fund (IMF), in its World Economic Outlook (WEO) released on Wednesday, has further downgraded its 2020 global growth forecast to negative 4.9 percent, 1.9 percentage points lower than in April, and projected a more gradual recovery than previously anticipated.
State Bank of Pakistan cuts key policy rate by 100bps to 7%
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State Bank of Pakistan cuts key policy rate by 100bps to 7%
- The surprise move comes amid improved inflation outlook and domestic economic slowdown
- Industrialists demand policy rate to be 5% or below given the global economic meltdown
Pakistan vows to extend ‘practical support’ to rehabilitate Palestinian educational institutions
- At least 625,000 children have been denied entire year of school due to Israel’s war on Gaza, says UNICEF
- Pakistan and COMSTECH have partnered to provide fully funded scholarships for hundreds of Palestinians
ISLAMABAD: Pakistan’s Education Minister Dr. Khalid Maqbool Siddiqui on Thursday vowed to extend “practical support” to rehabilitate educational institutions in Palestine, the OIC’s Standing Committee on Scientific and Technological Cooperation (COMSTECH) said.
Israel’s military campaigns in Gaza since Oct. 7, 2023, have killed over 44,000 Palestinians. Israel’s bombardment has dealt a heavy setback for education in the area, and according to a report by UNICEF, 625,000 children have been denied an entire school year in Gaza. With the conflict still ongoing, they face the high risk of a second year without education.
COMSTECH, in collaboration with the Association of Private Sector Universities of Pakistan (APSUP), initiated a program in 2021 offering 500 fully funded scholarships and fellowships to Palestinian students. This number was increased to 5,000 scholarships in 2023. Many Palestinian students have already arrived in Pakistan under this program and are pursuing full-degree programs.
Siddiqui, along with COMSTECH Coordinator General Dr. Muhammad Iqbal Choudhary, visited the Palestinian embassy in Islamabad to discuss matters related to education with Palestinian Ambassador Dr. Zuhair Zaid.
“He [Siddiqui] assured that Pakistan is committed to extending practical support for the rehabilitation of educational institutions in Palestine,” a press release by COMSTECH said.
The Pakistani minister reiterated his government and people’s steadfast support for Palestine, COMSTECH said.
“Sharing insights from his recent visit to Oman, he revealed discussions with educational ministers from other countries about joint actions to assist Palestine in the education sector,” it added.
Siddiqui said he has proposed convening an extraordinary meeting of the education ministers from OIC member countries in Islamabad to devise a “comprehensive long-term plan for supporting Palestine.”
Zaid expressed thanked the government, COMSTECH and people of Pakistan, the OIC body said.
“He acknowledged their steadfast support, emphasizing that these efforts will never be forgotten by the Palestinian people,” the statement said.
Pakistan PM visits Azerbaijan embassy, condoles loss of lives in Kazakhstan plane crash
- At least 38 people were killed when Azerbaijan Airlines passenger plane crashed in Kazakhstan’s Aktau city
- Shehbaz Sharif says ties between Pakistan and Azerbaijan rooted in shared religious and cultural values
ISLAMABAD: Prime Minister Shehbaz Sharif visited Azerbaijan’s embassy in Islamabad on Thursday to condole over the loss of lives in the Azerbaijan Airlines plane crash in Kazakhstan, the Prime Minister’s Office (PMO) said.
At least 38 people were killed when an Azerbaijan Airlines passenger plane with 67 people on board crashed near the Kazakhstan city of Aktau on Wednesday. The Embraer 190 aircraft was en route from the Azerbaijani capital of Baku to the Russian city of Grozny in the North Caucasus.
The Pakistani prime minister visited the Azerbaijan embassy in Islamabad where he met Khazar Farhadov to offer his condolences over the incident.
“In this hour of grief, the government of Pakistan and the people of Pakistan express their complete solidarity with the brothers and sisters of Azerbaijan,” Sharif was quoted as saying by the PMO.
The Pakistani prime minister prayed for the speedy recovery of all injured in the blast.
“Azerbaijan and Pakistan have strong relations of brotherhood based on shared religious and cultural values,” Sharif said.
Pakistan has eyed closer economic cooperation with Central Asian states such as Azerbaijan in recent months as the South Asian nation faces an economic crisis.
During Azerbaijan President Ilham Aliyev’s two-day visit to Pakistan in July, both nations agreed to enhance the volume of bilateral trade to $2 billion, vowing to strengthen ties and increase cooperation in mutually beneficial economic projects.
They also signed the Pakistan-Azerbaijan Preferential Trade Agreement to boost economic cooperation through the reduction of tariffs on goods like Pakistani sports equipment, leather, and pharmaceuticals as well as Azerbaijani oil and gas products.
Pakistan reports two new polio cases as 2024 tally surges to 67
- Pakistan detects poliovirus cases from Kashmore in southern Sindh and Tank in Khyber Pakhtunkhwa provinces
- Efforts to eradicate polio have been undermined by misinformation, opposition from religious hard-liners
KARACHI: Pakistan reported two new polio cases on Thursday, pushing this year’s tally of the infection to 67, the country’s polio eradication program said amid Islamabad’s struggle to contain the spread of the disease.
Pakistan, along with neighboring Afghanistan, remains the last polio-endemic country in the world. The nation’s polio eradication campaign has faced serious problems with a spike in reported cases this year that have prompted officials to review their approach to stopping the crippling disease.
The Regional Reference Laboratory for Polio Eradication at Pakistan’s National Institute of Health confirmed that two wild poliovirus type 1 cases, one each from Tank in northwestern Pakistan and Kashmore in Sindh were reported on Thursday.
“Pakistan is responding to the resurgence of WPV1 this year with 67 cases reported so far,” the Polio Eradication Programme said. “Of these, 27 are from Balochistan, 19 from Khyber Pakhtunkhwa, 19 from Sindh, and one each from Punjab and Islamabad.”
It said that this was the fourth case reported from Tank and second from Kashmore this year.
Pakistani authorities last week conducted a large-scale sub-national polio vaccination campaign in Punjab, Sindh, Khyber Pakhtunkhwa, Azad Jammu and Kashmir, Gilgit-Baltistan and Islamabad, vaccinating over 42 million children.
The second phase of the campaign is scheduled to begin on Dec. 30, covering Balochistan province.
Poliovirus, which can cause crippling paralysis particularly in young children, is incurable and remains a threat to human health as long as it has not been eradicated. Immunization campaigns have succeeded in most countries and have come close in Pakistan, but persistent problems remain.
In the early 1990s, Pakistan reported around 20,000 cases annually but in 2018 the number dropped to eight cases. Six cases were reported in 2023 and only one in 2021.
Pakistan’s polio program began in 1994 but efforts to eradicate the virus have since been undermined by vaccine misinformation and opposition from some religious hard-liners, who say immunization is a foreign ploy to sterilize Muslim children or a cover for Western spies. Militant groups also frequently attack and kill members of polio vaccine teams.
UN calls for investigation into Pakistan’s alleged air strikes on Afghanistan border
- UN mission in Afghanistan says dozens of civilians killed in airstrikes this week by Pakistan in Paktika province
- Islamabad accuses Kabul of harboring militant fighters, allowing them to strike on Pakistani soil with impunity
KABUL: The UN mission to Afghanistan on Thursday called for an investigation into Pakistani air strikes in Afghanistan, in which the Taliban government said 46 people were killed, including civilians.
The United Nations Assistance Mission in Afghanistan (UNAMA) said it had “received credible reports that dozens of civilians, including women and children, were killed in airstrikes by Pakistan’s military forces in Paktika province, Afghanistan, on 24 December.”
“International law obliges military forces to take necessary precautions to prevent civilian harm,” the agency said in a statement, adding an “investigation is needed to ensure accountability.”
The Taliban government said the 46 deceased were mainly women and children, with another six wounded, mostly children.
An AFP journalist saw several wounded children in a hospital in the provincial capital Sharan, including one receiving an IV and another with a bandaged head.
A Pakistan security official told AFP on Wednesday the bombardment had targeted “terrorist hideouts” and killed at least 20 militants, saying claims that “civilians are being harmed are baseless and misleading.”
On a press trip to the area organized by Taliban authorities, AFP journalists saw four mud brick buildings reduced to rubble in three sites around 20-30 kilometers (10-20 miles) from the Pakistan border.
AFP spoke to multiple residents who said the strikes hit in the late evening, breaking doors and windows in villages and destroying homes and an Islamic school.
Several residents reported pulling bodies from the rubble after strikes targeted houses, killing multiple members of the same families.
Afghanistan’s Minister of Borders and Tribal Affairs Noorullah Noori called the attack “a brutal, arrogant invasion.”
“This is unacceptable and won’t be left unanswered,” he said during the site visit.
Pakistani foreign ministry spokesperson Mumtaz Zahra Baloch did not confirm the strikes but told a media briefing on Thursday: “Our security personnel conduct operations in border areas to protect Pakistani from terror groups, including TTP.”
She was referring to the Tehreek-e-Taliban Pakistan (TTP) — Pakistan’s homegrown Taliban group which shares a common ideology with its Afghan counterpart.
The TTP last week claimed a raid on an army outpost near the border with Afghanistan in which Pakistan said 16 soldiers were killed.
Baloch said Pakistan prioritized dialogue with Afghanistan, and that Islamabad’s special envoy, Sadiq Khan, was in Kabul meeting with officials where “matters of security” and “terror groups including TTP” were discussed.
The strikes were the latest spike in hostilities on the frontier between Afghanistan and Pakistan, with border tensions between the two countries escalating since the Taliban government seized power in 2021.
Islamabad has accused Kabul’s authorities of harboring militant fighters, allowing them to strike on Pakistani soil with impunity — allegations Kabul denies.
Army major, 13 militants killed during separate operations in northwestern Pakistan — military
- Major Muhammad Awais, 31, killed while battling militants in South Waziristan district, says military
- Sixteen soldiers were killed on Saturday in northwest Pakistan as Islamabad grapples with militancy
ISLAMABAD: An army major and 13 militants were killed during three separate intelligence-based operations in northwestern Pakistan, the military’s media wing said on Thursday, vowing to eliminate militancy from the country.
Pakistan’s Khyber Pakhtunkhwa province, which lies on the country’s border with Afghanistan, has witnessed frequent attacks by the Pakistani Taliban, or the Tehreek-e-Taliban Pakistan (TTP) and other militant groups that targeted security forces convoys and check posts in recent months.
The latest killings were reported after three separate gunbattles between militants and Pakistani security forces from Dec. 25-26, the Inter-Services Public Relations (ISPR) said. Two militants were killed in Bannu district while five others were killed in the North Waziristan district in a separate operation.
“However, during this operation, Major Muhammad Awais (age: 31 years, resident of District Narowal), a brave officer, who was leading his troops from the front, having fought gallantly, paid the ultimate sacrifice and embraced Shahadat [martyrdom],” the ISPR said.
In the third operation in South Waziristan district, six militants were gunned down by the security forces while eight others were injured.
“Security forces of Pakistan are determined to wipe out the menace of terrorism and such sacrifices of our brave soldiers further strengthens our resolve,” the military said.
Prime Minister Shehbaz Sharif paid tribute to Pakistan’s security forces for battling militants and offered condolences for Major Awais’s killing.
“The entire nation salutes martyred Major Owais,” he said in a statement. “We remain resolute in our desire to eliminate all forms of terrorism.”
Pakistan has struggled to contain militancy in its northwestern KP province. Sixteen Pakistani soldiers and eight militants were killed in a gunfight on Saturday in South Waziristan, the military reported.
The attack was claimed by the Pakistani Taliban.
Islamabad has frequently accused neighboring Afghanistan of sheltering and supporting militant groups that launch cross-border attacks. Afghan officials deny involvement, insisting Pakistan’s security issues are an internal matter of Islamabad.
