economicletter

a weekly publication of The Institute of Bankers Pakistan

Pakistan
The SBP in its Annual Report 2015-16, has placed GDP growth
during the fiscal (July-June) at 4.7 % and has predicted it to
rise to 5-6 % in the following 2016-17 (current) fiscal. The
government has targeted the growth at 5.7 %. Some of the
relatively more important observations & forecasts of the
Report are noted below:

it is likely that growing public sector development program,

though short of target would result in eliminating some
existing infrastructure bottlenecks;

CPI inflation would likely be in the range of 4.5 - 5.5 %

lower than the governments target of containing it at 6 %;

growth in the agricultural sector which sapped last fiscal

must be made to rebound;

the fiscal deficit may be in the range of 4-5% of GDP

against the governments target of holding it 3.8% of GDP.
It was recorded at 4.6% of GDP in 2015 -16 fiscal;

industrial production which has been growing steadily

needs to be accelerated;

the current pace of growth in the services sector needs to

be maintained with an eye on gaining further potential
pace;

Growth potential of the economy would sag unless taxation

reforms measures are implemented to achieve a higher a
tax base;

the current account deficit is likely to remain in the range

of 0.5 - 1.5 % of GDP;

the China-Pakistan Economic Corridor (CPEC) related

projects are set to ease infrastructure and energy
constraints considerably;

export earnings would perhaps be between $ 20 - 23 bn

against the government target of it rising to $ 24.7 bn
while imports may rise to $ 42 - 43 bn;

the policy rate at 5.75 % stands at historically low level

and pro-growth policies should result in achieving the
expansion of the economy as targeted;

home remittances may be in the range of $ 20.5-21.5 bn

as the pace of its growth would be slower than in the past;

Markets at a glance
KIBOR (6 months)

Foreign Exchange Rates

PSX

Gold Rate

USD($)

100 Index

(10 gm)

Rs. 114.2

Rs. 106.85

42,331.53

Rs. 37,903.92

Rs. 135.25

Rs. 114.7

Rs. 107.45

42,999.66

Rs. 39,364.00

+1.75

+0.5

+0.6

+668.13

+1460.08

Weekly
Review

Bid %

Offer %

GBP()

EURO()

Beginning

5.88

6.13

Rs. 133.5

Ending

5.85

6.10

Change

-0.03

-0.03

Volume 11, Issue No. 46 | November 25, 2016

*Rates are taken till 5 pm*

economicletter
measures need to be introduced to tackle the problem of
loss-making public sector enterprises (PSEs) to help the
government spend more on needed development programs;

The SBP has come to conclude that though some macroeconomic targets fell short of the target, the economy in 2015-16
performed better than in the 2014-15 fiscal

The SBP has estimated that country has spent over $118 bn in
its was on terror effort since 2002 in partnership with
coalition members. The effort has cliffed - off almost one third
of potential GDP growth.

According to SBP, current account deficit widened to $ 1.762

bn during July- October 2016 against $ 1.078 bn in the same
period of 2015.

According to SBP, total liquid foreign exchange reserves as on

October 21, 2016, stood at $ 24.327 bn of which $ 19.320 bn
was held by SBP and the rest with banks.

International

a weekly publication of The Institute of Bankers Pakistan

German exports, the main vehicle of its GDP growth to the U.K,
during July-September fell by 4.7 % against a rise of 11 % in the
same quarter of 2015. Exports to the U.S, Germanys target trading
partner, was also lower by 10.5 % during the above periods.

The Central bank of Mexico has raised its key rate by 50 basis
points (bps) to 5.25 % the highest level since 2009.

The Central Bank of Philippines has left its key ceiling and floor
interest rate corridor unchanged at 3.5 % and 2.5 % respectively.

The Bank of Indonesia has left its key benchmark interest rate
unchanged at 4.75 % having cut it by 150 basis points since
the beginning of this year.

Sri Lanka has revised existing laws thus allowing foreigners to

own land property in the island in a bid to attract foreign cash
flow as also foreign direct investment.

Total sale of automobiles (industry data) during July- October

2016 stood at 77,859 units against 85,349 units in the same
period of 2014.

The Chinese Yuan has depreciated by 5.8 % this year relative

to the U.S dollar which has been gaining strength due to robust
macro - economic numbers.

Editor: Syed Mahdi Mustafa [M.Sc. London School of Economics] | Composer: Mahreen Channa
Published by: The Institute of Bankers Pakistan, M.T. Khan Road, Karachi 74200, Pakistan
UAN: 111-000-IBP (427) (Ext.539) | Fax: (021) 35683805 | Email: publications@ibp.org.pk | Website: www.ibp.org.pk
General Disclaimer: Data used in the Economic Letter is based on government sources besides recognised representative private sector
trade bodies as reported in the print media. They are cross-checked before release. Yet an error or two may creep in, regrettable as they
may be as part of human nature. Reporting is unopinionated. The Institute of Bankers Pakistan stands totally absolved of any error
contained in the Economic Letter, either in reporting or composing.

Volume 11, Issue No. 46 | November 25, 2016