TFD Stocks Overview

What State Bank is required to do for the recovery of Economy

Like other central Banks State Bank is required to bring down inflation and to accelerate country’s growth through its monetary policy decisions.
Currently SBP is standing with its discount rate or main interest Rate at 13.25% that has hurt the business activities and business community is consistently demanding SBP to bring it down. Next monetary policy announcement is very near and it is anticipated that SBP may bring its discount rate in its next monetary policy announcement. Whether it announces this reduction with 50bp or 100 bp or 200 bp is yet to be seen.
However at the start of 2020 first news on economy of Pakistan has come from Fitch Ratings affirming Pakistan’s long-term Foreign Currency issuer default rating at ‘B-negative’ with a stable outlook.
The New York-based agency – one of the three major global rating agencies – noted high debt-to-GDP ratio (85%), economic growth rate of 2.8 per cent and fiscal deficit at the elevated 7.9pc level besides high inflation and interest payments and weaker revenue growth as key weaknesses.
It said, the tighter macroeconomic policies were further slowing GDP growth, estimated at 2.8pc in FY20 from 3.3pc in FY19. Inflation has also continued to rise sharply from the cost pass-through of the currency depreciation and increases in energy tariffs.
Fitch forecast inflation to average 11.3pc in FY20 against 6.8pc in FY19. Interestingly in 2017-18, when Pakistan was not on an IMF program, inflation was 6 percent while the rate noted by the IMF in its first mandated quarterly review report was 11.8 percent for the current year.
The 6 billion dollar ongoing Extended Fund Facility (EFF) of IMF 39-month program had originally projected inflation at 13 percent for 2020 with the first review (December 2019) noting that “average Consumer Price Index inflation is projected to decelerate slightly to 11.8 percent in fiscal year 2020 as administrative and energy tariff adjustments are expected to offset the effects from weak domestic demand. Thereafter inflation is expected to converge to SBP’s 5 to 7 percent medium term objective, hitting the midpoint by fiscal year 2022.
Pakistan’s monetary policies (13.25 percent discount rate which has stifled economic activity and an undervalued rupee to the tune of 40% percent in CY 2019 which is contributing to inflationary pressures mainly through its impact on domestic price of imported petroleum and products) have repeatedly and publicly been supported by Prime Minister Imran Khan.
IMF has made two observations with respect to the economies of Egypt and Turkey in its fifth and final review dated October 2019. For Egypt they are (i) “core inflation appears to be relatively well anchored, (ii) “Exchange rate flexibility remains essential to preserve the gains in real competitiveness since 2016.
A comparison with Turkey’s economy is very interesting. Erdogan sacked his central bank governor recently because he refused to reduce the discount rate by 300 basis points to jump-start the economy arguing that a high interest rate raises inflation (at present the rate is 19.756 percent from the earlier 24 percent with the three major ratings agencies warning Erdogan about political interference with Fitch cutting Turkey’s sovereign rating further into junk territory). The depreciation of the Turkish lira, responsible for 25 percent of inflation in the country, has now stabilized.
Thus in effect, it would not serve Pakistan’s economy if a comparison is made with Egypt or Turkey. Inflation is not linked to discount rate adjustment in Pakistan and this is especially so for food inflation which is linked to input costs (and with rupee undervalued fuel costs rise that account for higher transport and energy costs in the country); the over-correction of policies supported by Imran Khan’s economic team leaders account for failure of the private sector to award a pay raise commensurate with inflation with a consequent impact on income levels; and last but not least the high discount rate and the inflow of foreign portfolio investment in government debt securities is raising the government’s indebtedness which explains why the current account deficit in real sense, as highlighted by the IMF mission chief for Pakistan, is not declining and therefore remains a source of concern.
In Pakistan CPI overall shows 12.6% increase on Dec 2019 as compared to 5.4% on Dec 2018. WPI (Whole Sale Price index) shows 12.4% increase on Dec 2019 as compared to 16.5% on Dec 2018. SPI (sensitive Price Index) meant for low paid members of the society show an increase of 18.2-19.5% on December 2019 as compared to 5.4% on Dec 2018. Core inflation which is used by State Bank to make its decision regarding its discount rate shows an increase of 7.5 % on December 2019 as compared to 7.8% on Dec 2018.
So looking at inflation picture low paid members of the society are more affected and secondly SBP has no grounds to increase its discount rate to the level of 13.25% if we go through core inflation numbers.
Broad Money (M2) shows an increase of Rs 637 billion from July -Dec 2019. Private Sector credit off take shows an amount of Rs 117 billion taken during July-Dec 2019, as compared to Rs 504 billion in the same period in 2018.
Total Government Debt at the end of November 2019 stood at Rs 21.4 trillion against Rs 17.3 trillion on November 2018, a massive increase in one year.
As of Nov 2019 (July-Nov) foreign private investment has showed investment of $ 869.7 million with $ 850 million as direct investment and portfolio investment as $19.5 million and in debt securities as $ 1.1 billion.
Government expenditure as of Nov 2019(July-Nov) stood at Rs 10.4 trillion against revenue of Rs 7.3 trillion with a deficit of Rs 3.1 trillion.
Only some recovery on external sector came with decline in its current account deficit due to 3% increase in exports and 30% decrease in imports but still our FX reserve at $ 18 billion as of January 2020 is only sufficient meet 2 months foreign payments.
As regards GDP growth of 2.8% increase in our population is above 3% per year so in that sense we have to consider our GDP growth in negative.
So with this picture only solution lies is to revive business in our country and to support GDP growth to inch up. For this SBP needs to cut its discount rate, do strict monitoring of financial sector under its control and to come up with steps that should support business activities in Pakistan.

xosotin chelseathông tin chuyển nhượngcâu lạc bộ bóng đá arsenalbóng đá atalantabundesligacầu thủ haalandUEFAevertonfutebol ao vivofutemaxmulticanaisonbetbóng đá world cupbóng đá inter milantin juventusbenzemala ligaclb leicester cityMUman citymessi lionelsalahnapolineymarpsgronaldoserie atottenhamvalenciaAS ROMALeverkusenac milanmbappenapolinewcastleaston villaliverpoolfa cupreal madridpremier leagueAjaxbao bong da247EPLbarcelonabournemouthaff cupasean footballbên lề sân cỏbáo bóng đá mớibóng đá cúp thế giớitin bóng đá ViệtUEFAbáo bóng đá việt namHuyền thoại bóng đágiải ngoại hạng anhSeagametap chi bong da the gioitin bong da lutrận đấu hôm nayviệt nam bóng đátin nong bong daBóng đá nữthể thao 7m24h bóng đábóng đá hôm naythe thao ngoai hang anhtin nhanh bóng đáphòng thay đồ bóng đábóng đá phủikèo nhà cái onbetbóng đá lu 2thông tin phòng thay đồthe thao vuaapp đánh lô đềdudoanxosoxổ số giải đặc biệthôm nay xổ sốkèo đẹp hôm nayketquaxosokq xskqxsmnsoi cầu ba miềnsoi cau thong kesxkt hôm naythế giới xổ sốxổ số 24hxo.soxoso3mienxo so ba mienxoso dac bietxosodientoanxổ số dự đoánvé số chiều xổxoso ket quaxosokienthietxoso kq hôm nayxoso ktxổ số megaxổ số mới nhất hôm nayxoso truc tiepxoso ViệtSX3MIENxs dự đoánxs mien bac hom nayxs miên namxsmientrungxsmn thu 7con số may mắn hôm nayKQXS 3 miền Bắc Trung Nam Nhanhdự đoán xổ số 3 miềndò vé sốdu doan xo so hom nayket qua xo xoket qua xo so.vntrúng thưởng xo sokq xoso trực tiếpket qua xskqxs 247số miền nams0x0 mienbacxosobamien hôm naysố đẹp hôm naysố đẹp trực tuyếnnuôi số đẹpxo so hom quaxoso ketquaxstruc tiep hom nayxổ số kiến thiết trực tiếpxổ số kq hôm nayso xo kq trực tuyenkết quả xổ số miền bắc trực tiếpxo so miền namxổ số miền nam trực tiếptrực tiếp xổ số hôm nayket wa xsKQ XOSOxoso onlinexo so truc tiep hom nayxsttso mien bac trong ngàyKQXS3Msố so mien bacdu doan xo so onlinedu doan cau loxổ số kenokqxs vnKQXOSOKQXS hôm naytrực tiếp kết quả xổ số ba miềncap lo dep nhat hom naysoi cầu chuẩn hôm nayso ket qua xo soXem kết quả xổ số nhanh nhấtSX3MIENXSMB chủ nhậtKQXSMNkết quả mở giải trực tuyếnGiờ vàng chốt số OnlineĐánh Đề Con Gìdò số miền namdò vé số hôm nayso mo so debach thủ lô đẹp nhất hôm naycầu đề hôm naykết quả xổ số kiến thiết toàn quốccau dep 88xsmb rong bach kimket qua xs 2023dự đoán xổ số hàng ngàyBạch thủ đề miền BắcSoi Cầu MB thần tàisoi cau vip 247soi cầu tốtsoi cầu miễn phísoi cau mb vipxsmb hom nayxs vietlottxsmn hôm naycầu lô đẹpthống kê lô kép xổ số miền Bắcquay thử xsmnxổ số thần tàiQuay thử XSMTxổ số chiều nayxo so mien nam hom nayweb đánh lô đề trực tuyến uy tínKQXS hôm nayxsmb ngày hôm nayXSMT chủ nhậtxổ số Power 6/55KQXS A trúng roycao thủ chốt sốbảng xổ số đặc biệtsoi cầu 247 vipsoi cầu wap 666Soi cầu miễn phí 888 VIPSoi Cau Chuan MBđộc thủ desố miền bắcthần tài cho sốKết quả xổ số thần tàiXem trực tiếp xổ sốXIN SỐ THẦN TÀI THỔ ĐỊACầu lô số đẹplô đẹp vip 24hsoi cầu miễn phí 888xổ số kiến thiết chiều nayXSMN thứ 7 hàng tuầnKết quả Xổ số Hồ Chí Minhnhà cái xổ số Việt NamXổ Số Đại PhátXổ số mới nhất Hôm Nayso xo mb hom nayxxmb88quay thu mbXo so Minh ChinhXS Minh Ngọc trực tiếp hôm nayXSMN 88XSTDxs than taixổ số UY TIN NHẤTxs vietlott 88SOI CẦU SIÊU CHUẨNSoiCauVietlô đẹp hôm nay vipket qua so xo hom naykqxsmb 30 ngàydự đoán xổ số 3 miềnSoi cầu 3 càng chuẩn xácbạch thủ lônuoi lo chuanbắt lô chuẩn theo ngàykq xo-solô 3 càngnuôi lô đề siêu vipcầu Lô Xiên XSMBđề về bao nhiêuSoi cầu x3xổ số kiến thiết ngày hôm nayquay thử xsmttruc tiep kết quả sxmntrực tiếp miền bắckết quả xổ số chấm vnbảng xs đặc biệt năm 2023soi cau xsmbxổ số hà nội hôm naysxmtxsmt hôm nayxs truc tiep mbketqua xo so onlinekqxs onlinexo số hôm nayXS3MTin xs hôm nayxsmn thu2XSMN hom nayxổ số miền bắc trực tiếp hôm naySO XOxsmbsxmn hôm nay188betlink188 xo sosoi cầu vip 88lô tô việtsoi lô việtXS247xs ba miềnchốt lô đẹp nhất hôm naychốt số xsmbCHƠI LÔ TÔsoi cau mn hom naychốt lô chuẩndu doan sxmtdự đoán xổ số onlinerồng bạch kim chốt 3 càng miễn phí hôm naythống kê lô gan miền bắcdàn đề lôCầu Kèo Đặc Biệtchốt cầu may mắnkết quả xổ số miền bắc hômSoi cầu vàng 777thẻ bài onlinedu doan mn 888soi cầu miền nam vipsoi cầu mt vipdàn de hôm nay7 cao thủ chốt sốsoi cau mien phi 7777 cao thủ chốt số nức tiếng3 càng miền bắcrồng bạch kim 777dàn de bất bạion newsddxsmn188betw88w88789bettf88sin88suvipsunwintf88five8812betsv88vn88Top 10 nhà cái uy tínsky88iwinlucky88nhacaisin88oxbetm88vn88w88789betiwinf8betrio66rio66lucky88oxbetvn88188bet789betMay-88five88one88sin88bk88xbetoxbetMU88188BETSV88RIO66ONBET88188betM88M88SV88Jun-68Jun-88one88iwinv9betw388OXBETw388w388onbetonbetonbetonbet88onbet88onbet88onbet88onbetonbetonbetonbetqh88mu88Nhà cái uy tínpog79vp777vp777vipbetvipbetuk88uk88typhu88typhu88tk88tk88sm66sm66me88me888live8live8livesm66me88win798livesm66me88win79pog79pog79vp777vp777uk88uk88tk88tk88luck8luck8kingbet86kingbet86k188k188hr99hr99123b8xbetvnvipbetsv66zbettaisunwin-vntyphu88vn138vwinvwinvi68ee881xbetrio66zbetvn138i9betvipfi88clubcf68onbet88ee88typhu88onbetonbetkhuyenmai12bet-moblie12betmoblietaimienphi247vi68clupcf68clupvipbeti9betqh88onb123onbefsoi cầunổ hũbắn cáđá gàđá gàgame bàicasinosoi cầuxóc đĩagame bàigiải mã giấc mơbầu cuaslot gamecasinonổ hủdàn đềBắn cácasinodàn đềnổ hũtài xỉuslot gamecasinobắn cáđá gàgame bàithể thaogame bàisoi cầukqsssoi cầucờ tướngbắn cágame bàixóc đĩaAG百家乐AG百家乐AG真人AG真人爱游戏华体会华体会im体育kok体育开云体育开云体育开云体育乐鱼体育乐鱼体育欧宝体育ob体育亚博体育亚博体育亚博体育亚博体育亚博体育亚博体育开云体育开云体育棋牌棋牌沙巴体育买球平台新葡京娱乐开云体育mu88qh88

Leave a Reply