KARACHI: After keeping it unchanged for almost 15 months, Pakistan’s central bank on Monday raised the policy rate by 25 basis points to 7.25 percent, hoping to slow down growth in the current account deficit due to an unexpectedly faster pace of economic recovery.
The State Bank of Pakistan (SBP) had drastically cut the key rate from 13.25 percent to 7 percent between March 17, 2020 and June 25, 2020, to support the COVID-hit economy.
“At this more mature stage of the recovery, a greater emphasis is needed on ensuring the appropriate policy mix to protect the longevity of growth, keep inflation expectations anchored, and slow the growth in the current account deficit,” the SBP said in statement after a meeting of its Monetary Policy Committee (MPC).
Since its last meeting in July, the MPC noted that the pace of economic recovery had exceeded expectations. This robust recovery in domestic demand, coupled with higher international commodity prices, was leading to a strong pick-up in imports and a rise in the current account deficit.
Pakistan’s current account deficit from July to August was recorded at $2.3 billion as compared to a surplus of $838 million during the same period last year.
The central bank said over the last few months, the burden of adjusting to the rising current account deficit had fallen primarily on the exchange rate and it was appropriate for other adjustment tools, including interest rates, to also play their due role.
It said year-on-year inflation had declined since June but rising demand pressures together with higher imported inflation could begin to manifest in inflation readings later this fiscal year.
The SBP said economic recovery now appeared less vulnerable to pandemic-related uncertainty given growing signs that the latest COVID-19 wave in Pakistan had been contained and there is continued progress in the national vaccination campaign and overall management of the pandemic by the government.
The stance of monetary policy was still appropriately supportive of growth, with real interest rates remaining negative on a forward-looking basis, the bank said.
In the absence of unforeseen circumstances, the MPC expected the monetary policy to remain accommodative in the near term, with possible further gradual tapering of stimulus to achieve mildly positive real interest rates over time, the bank said.
Growth in Fiscal Year 2021-22 was now expected to move toward the upper end of the forecast range of 4-5 percent, notwithstanding some greater uncertainty with respect to spillovers from the evolving situation in Afghanistan.
In a report on Monday, Fitch Solutions, a US-based firm that provides credit risk and strategy solutions, predicted the Pakistani economy would grow by 4.2 percent in FY22, up from 3.9 percent in FY21.
It said the risk to growth outlook on the domestic front would be from the delta strain of the coronavirus, while on the external front heightened security threats posed by radical groups, such as the Pakistani Taliban, could lead to social instability and destruction of infrastructure.
“This might weigh on the country’s gross fixed capital outlook and exporting capabilities as businesses become hesitant to invest in capacity-building infrastructure,” the firm said in its statement on Monday.
Pakistan’s central bank said its policy committee felt some macro prudential tightening of consumer finance might also be appropriate to moderate demand growth as part of the move toward gradually normalizing monetary conditions.
The MPC would continue to carefully monitor developments affecting medium-term prospects for inflation, financial stability and growth and was ready to respond appropriately, it added.
Pakistan raises policy rate to 7.25% in bid to slow growth in current account deficit
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Pakistan raises policy rate to 7.25% in bid to slow growth in current account deficit
- The central bank maintained the key rate for almost 15 months to support economic recovery
- Says robust recovery in domestic demand, higher international commodity prices, leading to strong pick-up in imports
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.
KSrelief distributes food aid to displaced persons from Pakistani district facing sectarian clashes
- 500 food packages distributed to people from Kurram district currently residing in Tehsil Thall and facing urgent food insecurity
- KSrelief has implemented 210 projects in Pakistan worth millions of dollars to improve the lives of vulnerable communities
ISLAMABAD: Saudi Arabia’s King Salman Humanitarian Aid and Relief Center (KSrelief) on Thursday launched a food security initiative in Pakistan’s northwestern Khyber Pakhtunkhwa province, distributing food packages to people from a district marred by sectarian clashes since last month.
Kurram — a tribal district of around 600,000 in the northwestern Khyber Pakhtunkhwa where federal and provincial authorities have traditionally exerted limited control — has frequently experienced violence between its Sunni and Shia communities over land and power. Travelers to and from the town often ride in convoys escorted by security officials. The latest violence erupted on Nov. 21 when gunmen ambushed a vehicle convoy, killing 52 people, mostly Shias.
The assault triggered road closures and other measures that have disrupted people’s access to medicine, food, fuel, education and work. Over 130 people have been killed in the fighting that has ensued after the convoy attack, according to police records.
“As part of this effort, 500 food packages were distributed to displaced beneficiaries from Kurram district, who are currently residing in Tehsil Thall and facing urgent food insecurity,” the Saudi charity KSRelief said in a statement.
“The distribution took place in a camp in District Hangu, providing timely relief to displaced families in need.”
The initiative is part of KSrelief’s first phase of the Food Security Support Project for 2024-25, which aims to distribute 10,000 food packages among poor people across 14 districts in Khyber Pakhtunkhwa.
KSrelief has implemented 210 projects in Pakistan worth millions of dollars to improve the lives of vulnerable communities. Efforts include emergency relief for natural disasters, and long-term projects addressing food security, health care, education, and shelter. Shelter NFI and Winter Kits Project are notable initiatives providing essential items to families in harsh weather conditions, and food distribution programs that combat hunger and malnutrition.
In partnership with UNICEF, KSrelief supports critical health initiatives, such as vaccination campaigns to prevent polio and measles, safeguarding millions of children. The Noor Saudi Volunteer Project provides free eye care through eye camps, combating blindness among underprivileged populations.
Imran Khan’s party says wants to conclude negotiations with Pakistan government by Jan. 31
- Khan’s PTI, Pakistan’s government kicked off talks to ease political tensions on Monday
- PTI says Khan will not accept any “deal” with the government for his release from prison
ISLAMABAD: Former prime minister Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party announced on Thursday it wanted to conclude its negotiations with the government by Jan. 31, 2025, reiterating that it wanted a judicial commission to probe violent nationwide protests that broke out in May 2023.
The PTI and the government opened formal negotiations on Monday to ease political tensions in the country. Both sides moved to reduce tensions after Khan threatened a civil dissidence movement and amid growing concerns he may face trial by a military court for allegedly inciting attacks on sensitive security installations during the May 9, 2023 protests.
The PTI has put forward two demands: the release of political prisoners and the establishment of judicial commissions to investigate protests on May 9 last year and Nov. 26 in Islamabad this year, which the government says involved his party supporters, accusing them of attacking military installations and government buildings.
Members of the PTI’s negotiation team, Omar Ayub and Sahibzada Muhammad Hamid Raza, spoke to the media after meeting Khan in the Adiala prison in Rawalpindi. The negotiating committee apprised Khan regarding Monday’s talks with the government.
“The cutoff timeframe for negotiations is the end of January,” Raza told reporters outside Adiala prison. “By Jan. 31, we want to take these negotiations to their logical conclusion.”
Raza reiterated the PTI’s demands for the formation of judicial commissions for the May 9, 2023 and Nov. 26 protests.
“Our stance on the Nov. 26 (Islamabad protest) is quite clear: As of today, according to our data, 13 of our supporters were martyred, 64 suffered bullet injuries and the number of our missing supporters is between 150 to 200,” he said.
He said Khan will not accept any “deal” by the government for his release from prison. “Imran Khan will after facing all his cases in court, come out through the courts,” Raza said.
The next round of talks between the government and the PTI is scheduled to be held on Jan. 2.
Khan’s ouster in a parliamentary vote of no-confidence in 2022 has plunged the country into a long-term political crisis, particularly since the PTI founder was jailed in August last year on corruption and other charges and remains behind bars.
His party and supporters regularly hold protests calling for his release, with many of the demonstrations turning violent, including the one on Nov. 26 in which the government says four troops were killed and the PTI says 13 of its supporters died.
The negotiations on Monday were held days after Pakistan’s military announced prison sentences for 25 people involved in the May 9 protests.
The military announced on Thursday it had sentenced 60 more civilians, among them Khan’s nephew and two retired army officers, to prison sentences ranging from two to 10 years, for the May 9 protests.
Khan’s party has pointed out that the sentencing is contrary to the International Covenant on Civil & Political Rights, to which Pakistan is a party.
