Page 70 - CMA Journal (Jan-Feb 2026)

O TH ER F EATURES

Economy News

Prime Minister Announces 14-Point DISCOS Incur Rs. 472 billion Losses
Austerity Plan in FY2024-25
Pakistan’s power distribution companies (DISCOS) reported
Prime Minister Muhammad Shehbaz Sharif announced a
14-point austerity plan to address economic challenges losses of Rs. 472 billion in FY2024-25 due to high
transmission and distribution losses and low revenue
caused by the regional war. Fifty percent of public and
recovery, NEPRA said. No DISCO met regulator-approved
private sector staff, except essential services, will work from loss targets, with average losses at 17.55%, above the
home under a four-day week. Schools will close for two allowed 11.43%. PESCO, QESCO, SEPCO, and LESCO were the
weeks and higher education will move online. Government largest contributors. Revenue collection varied, with IESCO,
fuel allocations are cut by 50% for two months, and 60% of GEPCO, FESCO, LESCO, and MEPCO achieving 100%, while
official vehicles will be grounded. Non-salary expenditures QESCO collected only 38.7%. K-Electric reported Rs. 74.6
will be reduced by 20%, procurement of transport and other billion unrecovered. Safety performance also declined with
durables banned, and cabinet members will forgo two 118 fatalities reported. NEPRA highlighted structural
months’ salary while MPs take a 25% cut. Official foreign challenges including high losses, poor collections, delayed
tours are limited, seminars will use government venues, and connections, and safety risks, and called for reforms such as
restructuring, privatization, modern technology adoption,
hoarders will face strict action. The Prime Minister
and customer-focused operations to improve reliability and
emphasized national unity and reaffirmed Pakistan’s financial health.
solidarity with regional partners while striving to protect
citizens from the economic impact. Pakistan’s Tax Revenue Hits
Rs. 8.1 trillion in Jul–Feb FY2026
SOEs Losses Fall by Rs. 74 billion in
Last Three Years Pakistan’s tax collections reached Rs. 8.1 trillion in Jul–Feb
FY2026, up from Rs. 7.3 trillion in the same period last year,
Finance Minister Muhammad Aurangzeb said losses of Planning Minister Ahsan Iqbal said. Large-Scale
Manufacturing grew 4.8%, led by automobiles at 67.2%,
state-owned enterprises (SOEs) declined by Rs. 74 billion
over the last three years, from Rs. 905 billion in 2023 to Rs. non-metallic minerals at 10.5%, and wearing apparel at
7.5%. Exports of goods and services stood at $24.0 billion,
832 billion in FY25. The government is committed to
while imports reached $44.4 billion. Remittances rose 11.3%
accelerating privatization, following the transparent PIA to $23.2 billion. Inflation in February increased to 7% due to
privatization, with additional SOEs gradually handed over to a low base and electricity tariff adjustments. Development
the Privatization Commission. Many non-performing spending of Rs. 585 billion was approved, with Rs. 403 billion
institutions have been closed or are being rightsized to curb released during the period.
subsidies, leakages, and corruption. Some SOEs, including in
the oil and gas sector, remain profitable despite lower global Remittances Up 10.5% to $26.5 billion in
prices. Aurangzeb noted that last year, the net inflow from Jul–Feb FY2026
SOEs to the government was Rs. 40 billion, highlighting
improved operational and financial governance under the The State Bank of Pakistan reported that workers’
remittances rose 10.5% to $26.5 billion in Jul–Feb FY2026,
prime minister’s leadership.
up from $24.0 billion last year. In February alone,
remittances increased 5.2% to $3.3 billion. The largest
Pakistan’s Poverty Rate Rises to inflows came from the United Arab Emirates at $696.2
28.9% in 2024-25 million, Saudi Arabia $685.5 million, the United Kingdom
$532.0 million, and the United States $319.5 million.
Pakistan’s poverty rate rose to 28.9% in 2024-25 from 21.9%
in 2018-19, with rural areas hardest hit at 36.2% and urban Pakistan’s Liquid Foreign Reserves Rise
poverty at 17.4%, the preliminary report said. Income to $21.43 Billion
inequality widened, with the national Gini coefficient
Pakistan’s total liquid foreign reserves increased to $21.43
climbing from 28.4 to 32.7. Real household incomes and billion as of February 27, 2026. The State Bank of Pakistan’s
consumption fell as inflation, especially in food and utilities,
reserves rose by $87 million to $16.3 billion, while
outpaced nominal income growth. Low GDP growth, natural
commercial banks’ reserves fell by $61 million to $5.13
calamities, and external shocks further pushed more people billion. Total reserves were $21.41 billion the previous week,
below the poverty line. with the central bank holding $16.21 billion and commercial
banks $5.19 billion.
68 ICMA’s Chartered Management Accountant, Jan-Feb 2026