Page 82 - CMA Journal (Nov-Dec 2024)

O TH ER F EATURES

Economy News

Pakistan Targets $15 Billion IT Govt, banks in talks for Rs1.25 trillion
Exports, 5G Rollout by Mid-2025 deal to reduce circular debt

Minister of State for IT, Shaza Fatima Khawaja, announced Pakistan's government is negotiating a Rs1.25 trillion
plans to boost IT exports from $3.2 billion to $15 billion, ($4.47 billion) loan with commercial banks to tackle the
with 5G rollout expected by May-Jun 2025. She country's energy sector debt. The loan, repayable in 5-7
highlighted improved GDP prospects, enhanced years, aims to reduce "circular debt" and lower financing
connectivity, and the arrival of the world’s largest optical costs, making it easier for the government to service debt
fiber cable. Pakistan aims to become a regional obligations.
connectivity hub via the Wakhan border. The government
is committed to a $25 billion IT sector through strategic July-Feb remittances soar 32.5% to
investments, as economic stability improves. $24 billion YoY
Trade Deficit Rises to $15.78 Billion in Workers’ remittances in Pakistan grew by 32.5% in the first
Jul-Feb FY2024-25 eight months of FY25, reaching $24 billion, compared to

$18.1 billion in the same period last year, according to the
Pakistan’s trade deficit widened by 6.33% to $15.78 billion
SBP. In February 2025, remittances surged by 38.6% YoY
in Jul-Feb FY2024-25, compared to $14.84 billion in the
and 3.8% MoM, totaling $3.119 billion. The highest
same period last year. Exports increased by 8.17% to
inflows came from Saudi Arabia ($744.4 million), UAE
$22.02 billion, while imports rose by 7.4% to $37.8 billion.
($652.2 million), UK ($501.8 million), and the US ($309.4
On a monthly basis, the trade deficit slightly decreased by
million). SBP noted that rising imports, driven by
0.35% to $2.229 billion in Feb 2025. However, YoY, it
economic activity and global commodity prices,
surged by 33.43% compared to Feb 2024. Exports
increased import payments. However, strong remittances
dropped by 5.57% YoY to $2.439 billion, while imports
and moderate export growth helped stabilize the
rose by 10.03% to $4.738 billion. The current account
external account and boost foreign exchange reserves.
posted a surplus of $682 million in Jul-Jan FY2025,
compared to a $1.8 billion deficit last year. Weekly inflation falls 0.87%
State Bank reserves rise by $27million
Pakistan's short-term inflation, measured by the Sensitive
Pakistan's foreign exchange reserves have seen a slight Price Index (SPI), declined by 0.87% year-on-year and
boost, increasing by $27 million to $11.249 billion by the 0.09% week-on-week, ending March 6. This decrease was
end of February. The SBP aims to maintain its reserves, mainly due to lower prices of tea and perishable
targeting $13 billion by the end of the current fiscal year products. Prices of onions, tomatoes, and garlic dropped
(FY25). Currently, the country's total foreign exchange significantly, while sugar and edible oil prices increased
reserves stand at $15.873 billion, with commercial banks despite global price declines. Overall, inflation slowed
holding $4.624 billion. An IMF mission is also conducting due to last year's high base and stable prices for most
a forensic audit of Pakistan's economic progress over the products.
first eight months of FY25. Market sources suggest that
the SBP reserves should be even higher. OGRA Cuts Petroleum Prices from
Textile Exports Up 10.6% in Jul-Jan March 1, 2025
FY2024-25 OGRA has reduced fuel prices effective March 1, 2025,
following global market trends. High-speed diesel is
Pakistan’s textile exports rose 10.6% to $10.77 billion in down by Rs. 5.31 to Rs. 258.64 per liter, petrol by Rs. 0.50
Jul-Jan FY2024-25 from $9.74 billion last year, PBS to Rs. 255.63, kerosene by Rs. 3.53 to Rs. 168.12, and light
reported. Key gains: knitwear (+18.16% to $3.03 billion), diesel oil by Rs. 2.47 to Rs. 153.34. The move aims to ease
bed wear (+14.71% to $1.87 billion), and garments (+21.9% consumer costs.
to $2.44 billion). Raw cotton exports plunged 98.9% to
$0.62 million, while cotton yarn fell 35.77% to $430.23
million. YoY, Jan 2025 exports rose 15.85% to $1.69 billion,
while MoM, they grew 14.12% from Dec 2024.

80 ICMA’s Chartered Management Accountant, Jan-Feb 2025 BACK TO CONTENTS PAGE