KARACHI: Honda Atlas Cars Pakistan Ltd has announced the longest plant shutdown to date in the current economic crisis amongst the country's automakers, which are struggling to obtain raw materials due to import difficulties.
The company, a unit of Japanese car giant Honda Motor Co Ltd , said its plant would shut from March 9, 2023, to March 31, 2023.
“The company is not in a position to continue with its production,” it said in a notice to the Pakistan Stock Exchange (PSX), explaining its supply chain had been "severely disrupted."
Other listed-automakers, such as Indus Motor Company Limited (INDU) and Pak Suzuki Motor Company (PSMC), have also been forced to halt production during the past three quarters due to Pakistan's economic difficulties, which have seen central bank foreign exchange reserves drop to a level barely able to cover four weeks of imports.
As a result, letters of credit (LC), used for imports, are facing delays while being processed and priority is being given to essential items such as food and medicine.
Pakistan is currently in talks with the International Monetary Fund (IMF) to unlock the next tranche of $1.1 billion of a $6.5 billion bailout agreed in 2019.
“It is worrying because shutdowns not just impact corporate profitability but unemployment as well. The longer these shutdowns continue, it would test the companies' ability to maintain staff strength," says Fahad Rauf, head of research at Ismail Iqbal Securities, a local brokerage firm.
Rauf adds that the situation is not likely to improve any time soon for low priority sectors, such as automobiles, in light of LC constraints.
“Pakistan has limited dollars and until reserves improve to at least two months’ worth of import cover, import restrictions would likely continue.”
Other manufacturing halts in the sector have been between two and 16 days.
Pakistan's Honda Atlas shuts production to end-March on import difficulties
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Pakistan's Honda Atlas shuts production to end-March on import difficulties
- Other listed-automakers, such as Indus Motor Company Limited and Pak Suzuki Motor Company, have also been forced to halt production
- Pakistan's economic difficulties have seen central bank foreign exchange reserves drop to a level barely able to cover four weeks of imports
Pakistan revenue authority launches advanced system to boost tax collection
- Development comes amid Pakistan’s efforts to prevent tax evasion worth billions of rupees
- Islamabad has set a challenging tax revenue target of $46.66 billion for the new fiscal year
ISLAMABAD: Pakistan’s tax regulator has launched an advanced Stock Register system to optimize tax administration and boost revenue collection, it said on Thursday, amid efforts to prevent tax evasion.
The development comes amid Pakistan’s desperate attempts at preventing tax evasion worth billions of rupees and meeting a challenging tax revenue target of Rs13 trillion ($46.66 billion) for the new fiscal year that started July 1, a near 40 percent jump from the last year.
Pakistan last year came to the brink of a default as the economy shriveled amid political chaos, impact of 2022 floods, and decades of mismanagement. Last-minute loan rollovers from friendly countries as well as a $3 billion bailout from the International Monetary Fund (IMF) saved the nation.
The situation prompted Islamabad to introduce institutional reforms, including the digitization of the FBR, to put the economy back on track as the South Asian country grappled shrinking foreign exchange reserves, high inflation, and staggering public debts.
“This robust digital infrastructure grants tax officers real-time, in-depth access to registered persons’ data, bolstering transparency and securing compliance with Income Tax (IT) and Sales Tax (ST) regulations,” the FBR said on X.
The Stock Register functions as a sophisticated information and reporting system, and empowers tax officers to make precise tax assessments and mitigate the risk of tax evasion, according to the revenue authority.
The FBR said it had also launched the Information Center 2.0 portal to enhance its capacity to strengthen the national exchequer.
“Accessible exclusively through the IRIS tax officers’ platform at FBR field formations, Information Center 2.0 features advanced filters and search functionalities, enabling swift data retrieval to support compliance and precise assessments,” it said.
“This initiative represents a pivotal advancement in tax collection efforts. It fosters robust reporting, minimizes tax evasion & strengthens resource & financial management across the business landscape, ensuring adherence to tax regulations through a centralized data ecosystem.”
Since avoiding default last year, Pakistan has reached an agreement with the IMF for a new $7 billion loan. The South Asian country is currently trying to boost trade and investment to revive its fragile $350 billion economy.
Pakistan increases price of petrol by Rs1.35 per liter till next fortnight
- New price of petrol increases from Rs247.03 per liter to Rs248.38 per liter, says Finance Division
- Petroleum prices revised based on price variation in the international market, says notification international market, says notification
ISLAMABAD: Pakistani authorities have increased the price of petrol by Rs1.35 per liter till the next fortnight, the country’s Finance Division said in a notification late Thursday.
As per the notification, the new price of petrol has been increased from Rs247.03 per liter to Rs248.38 per liter.
“The Oil and Gas Regulatory Authority (OGRA) has worked out the consumer prices of petroleum products, based on the price variation in the international market,” OGRA said in a statement.
Meanwhile, the government also increased the price of high speed diesel by Rs3.85 per liter, increasing it from Rs251.29 per liter to Rs255.14 per liter.
The price of kerosene was slashed by Rs1.48 per liter, decreasing it from Rs163.02 per liter to Rs161.54 per liter, and the price of light diesel oil was slashed by Rs2.61 per liter, bringing it down from Rs150.12 per liter to Rs147.51 per liter.
Pakistan revises petroleum prices every fortnight. Petrol is mostly used in private transport, small vehicles, rickshaws and two-wheelers in Pakistan while any increase in the price of diesel is considered highly inflationary as it is mostly used to power heavy transport vehicles and particularly adds to the prices of vegetables and other eatables.
However, the negligible decrease in petrol and diesel prices is unlikely to provide much relief to the inflation-stricken Pakistanis.
Middle East burger chain Salt to begin operations in Pakistan ‘soon’
- ’Salt’ has branches in Saudi Arabia, Qatar, UK and Hungary already
- Salt did not mention which Pakistani cities it plans on opening outlets in
ISLAMABAD: International fast food chain “Salt” announced on Wednesday that it will expand its operations into Pakistan, vowing to provide its customers in the South Asian country high quality food “soon.”
Salt is a Middle East fast food chain based in Qatar since 2005 that specializes in burgers containing wagyu beef — a type of high-quality beef that comes from the Wagyu cattle breed native to Japan. The company founded by Qatar-based Ali Ahmed Buhindi has been running branches in Qatar, Saudi Arabia, the United Arab Emirates, the United Kingdom and also Hungary.
“Time to pass the salt, Pakistan! SALT, is coming in hot with all the good vibes and flavors to slide right into your cravings,” the burger joint Salt said in a post on Instagram with a picture titled “coming soon.”
Salt did not mention which Pakistani cities it plans on opening its branches in.
The burger chain offers a wide range of beef burgers that include brisket, truffle, signature, hook and original sliders.
Its chicken burgers include Cheetos, pine chicken and crispy chicken sliders flavors.
International fast food restaurants are quite popular in Pakistan with the likes of McDonald’s, KFC and Hardees operating successfully in multiple cities for decades.
Pakistan’s national airline attracts $36 million bid from real estate company
- Sole bidder Blue World City refuses to match government’s minimum price for Pakistan International Airlines
- Pakistan plans to sell over 51 percent of its stake in loss-making PIA as envisaged under an IMF deal this year
ISLAMABAD: Pakistan’s national flag carrier received a Rs10 billion [$36 million] bid from real estate development company Blue World City on Thursday for sixty percent of its stakes during a televised auction, much below the minimum price for the airline set by the government.
Pakistan plans to sell more than 51 percent of its stake in the loss-making Pakistan International Airlines (PIA) as part of economic reforms Islamabad agreed to with the International Monetary Fund (IMF) for a critical 37-month $7 billion bailout deal approved in September.
Pakistan’s government had pre-qualified six groups in June, but only real estate development company Blue World City met a Tuesday deadline to submit final documents to participate in the auction.
The state-owned Pakistan Television (PTV) broadcast the bidding process live, with Blue World City as the sole bidder. The bid for $36 million was read out in front of government officials and financial advisers. The government had set a minimum price of Rs85 billion [$305 million] for the airline.
“We have considered your match price option,” Blue World City Chairman Saad Nazir said during the event. “We have decided to stand with the price we have already submitted.”
Nazir refused to match the government’s offer of Rs85 billion, saying that as per the company’s assessment, “this was the best decision.”
“If the government doesn’t privatize [PIA], we wish the government all the best,” he said.
Pakistan’s privatization commission has allowed some time for potential bidders to see if any would outmatch Blue World City’s bid.
“The government couldn’t get the fair price of the PIA through the auction due to the single bidder,” Haroon Sharif, a former member of the cabinet committee on privatization, told Arab News.
“There was no competition to purchase stakes of the national carrier.”
The government’s initial plan was to finalize the deal to sell PIA on the country’s Independence Day, Aug. 14, but the plan was delayed following requests from bidders waiting for the airline’s latest audited accounts, aircraft lease agreements and clarity on flights to Europe, which are currently banned.
This auction was delayed to September and October but those also did not materialize.
Sharif said the government should have extended the auction’s deadline to involve more bidders in the process.
“Now it looks like the government is privatizing the PIA in desperation,” he noted.
Official data available with Arab News shows there are 88 commercially operated state-owned enterprises in Pakistan, with collective losses of up to Rs730.258 billion ($2.61 billion) in the fiscal year 2022 (FY22).
In its five-year privatization plan ending in 2029, the government has approved 24 state-owned enterprises for sale, including the PIA.
With a fleet of 34 aircraft comprising 17 Airbus A320s, 12 Boeing B777s and 5 ATRs, the PIA loses traffic to Middle Eastern carriers who have a market share of 60 percent, because of an absence of direct flights to destinations.
The carrier has air service pacts with 87 countries, and landing slots at key destinations such as London Heathrow.
The reorganization plan of the business will separate the aviation-related aspects from non-core components, so freeing the operating subsidiary of a large portion of legacy debt.
Pakistan says IMF cut its inflation forecast for the country for this year to 9.5%
- No need for government to introduce mini-year budget, says finance minister
- Aurangzeb says IMF revised down import projections for Pakistan for current fiscal year
ISLAMABAD: The International Monetary Fund has lowered its inflation forecast for Pakistan for the current year by 3.2% points to 9.5%, the country’s finance minister said on Thursday.
The IMF’s revised projection bring it closer to Pakistan’s own projections, Finance Minister Muhammad Aurangzeb said.
He said there was no need to introduce a mid-year budget, responding to local media reports saying the government needed to revise its budget to stay on track with an ongoing $7 billion, 37-month program with the IMF.
Aurangzeb said the IMF also revised down its import projections for Pakistan in the current fiscal year, which ends in June 2025.
Pakistan has been struggling with boom-and-bust economic cycles for decades, leading to 22 IMF bailouts since 1958. Currently the country is the IMF’s fifth-largest debtor, owing the Fund $6.28 billion as of July 11, according to the lender’s data.
The latest economic crisis has been the most prolonged and has seen Pakistan facing its highest-ever inflation rate, pushing the country to the brink of a sovereign default last year before an IMF bailout. Inflation has since eased.
