economicletter

Pakistan
According to SBP, repatriation of profits and dividends by foreign investors in Pakistan in the first eight months of the current fiscal (July-February 2011-12) amounted to $ 565 mn against $ 387 mn in the same period last fiscal. According to SBP provisional data, the governments domestic debt and liabilities increased by 31% to Rs 7.215 trillion at end-February 2012 against Rs 5.502 trillion at end-February 2011. According to SBP, liquid foreign exchange reserves as on March 30, 2012 stood at $ 16.506 bn of which $ 11.837 bn was held by the SBP and the rest with banks. According to Pakistan Petroleum Information Services, natural gas production by end-March 2012 stood at 4.399 mmcfd against 4.011 mmcfd at end-June 2011 while that of oil production registered an increase from 65.659 bpd at end-June 2011 to 72.411 bpd by end-March 2012. According to Pakistan Bureau of Statistics, inflation measured by the consumer price index (CPI) during July-March 2011-12 was recorded higher by 10.80% over the same period last fiscal. The sensitive price indicator (SPI) and the wholesale price index (WPI) registered increases of 6.1% and 4.5% respectively in March this year over March 2011. The Ministry of Petroleum having raised the prices of various petroleum products by upto Rs 8.94 per litre and of CNG by upto Rs 11.58 per Kg has, under the directive of the President of the country, has reduced the raise of petrol by Rs 2.32 a litre, of high speed diesel (HSD) by Rs 1.16 a litre, of kerosene oil by Rs 1.74 a litre and of CNG by Rs 1.95 per Kg.

a weekly publication of The Institute of Bankers Pakistan

The Federal Finance Minister expects GDP growth in the current fiscal to be at 4.0%, highest for three years, against earlier estimates of its being at 3.6%. . The distribution companies of liquefied petroleum gas (LPG) have reduced the price of LPG by Rs 18 per kilo. The government has raised the rates of return on investments of National Savings Schemes (NSS) on various portfolios under its aegis by between 20-43 basis points (bps). According to All Pakistan Cement Manufacturers Association, total sale of cement in the first nine months of the current fiscal (July-March 2011-12) rose by 8.40% to 17.386 million tonnes against 16.040 million tonnes in the same period last fiscal. Exports of cement declined by 7.76% to 6.243 million tonnes against 6.769 million tonnes during the above periods. According to Pakistan Cotton Ginners Association, a private sector representative body, cotton production in the current crop season may be over 14.67 million bales beating the record of 13.6 million bales harvested in 2004. The Sensitive Price Indicator (SPI) registered an increase of 9.49% in the week ending March 29, 2012 over the same week of 2011. The weekly SPI monitors changes in prices of 53 essential commodities, mostly kitchen items, data for which is collected from 17 urban centres. International The price per barrel of Brent crude oil, considered internationally as a yardstick for determining world oil prices, has crossed the $ 125 a barrel mark essentially on account of sanctions imposed on Iranian oil exports.
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Markets at a glance
Weekly Review Beginning Ending Change KIBOR (6months) Bid % Offer % 11.72 11.74 +0.02 11.97 11.99 +0.02 Foreign Exchange Rates GBP () Euro () Rs 144.86 Rs 143.51 - 1.35 Rs 120.90 Rs 118.32 - 2.58 USD ($) Rs 90.65 Rs 90.53 - 0.12 KSE 100 Index 13,761 13,874 + 113
Volume 7, Issue No. 13 |

Gold Rate (10gm) Rs 49,285 Rs 48,171 - 1,114

April 6, 2012

a weekly publication of The Institute of Bankers Pakistan

The BRICS group of countries comprising of Brazil, Russia, India, China and South Africa have agreed in principle to setup a joint bank from their own resources to draw upon for development needs as also to fall back upon in any unforeseen distress period. They have also agreed to develop a benchmark index for intra-regional trading at stock exchanges of the group countries. The Asian Development Bank has forecast that the 10-member states of the Association of Southeast Asian Nations (ASEAN) would register a combined GDP growth of 5.2% in 2012 against realized 4.6% in 2011. ASEAN comprises of the Philippines, Singapore, Malaysia, Thailand, Indonesia, Brunei, Cambodia, Laos, Vietnam and Myanmar. In a most radical banking reform, the central bank of Myanmar has floated a managed currency basket pegging the Kyat, the countrys national currency, at the rate of 818 Kyat to US$ 1.0. Chinas GDP growth in the first quarter of 2012 is tentatively placed at between 8.3-8.4% against 8.9% in the last quarter of 2011. Notwithstanding the fifth successive slowing quarterly growth the countrys economy appears on track to record a growth of 8.6% in 2012 against the official target of it being at 7.5%. The IMF has released a delayed tranche of $ 426.8 mn to Sri Lanka, as part of its provision of $ 2.6 bn bailout package approved in July 2009, after the central bank agreed to introduce a more flexible exchange rate to stem the rising trade deficit and low forex reserves. The 17-nation Eurozone finance ministers have agreed to setup a 700 bn euros fund called the financial firewall to help meet any member countrys emergency needs. The fund would require additional funding of 500 bn euros in addition to the 200 bn euros already provided to Greece, Ireland and Portugal. Unemployment in the 17-nation eurozone in February was recorded at 10.8% of workforce highest for 15 years, leaving 17 million people without any full-time job.

Unemployment in Italy, the third largest economy in the 17-nation eurozone bloc, was recorded at 9.3% at end-Feb. 2012, against 9.1% in January of the year. The Spanish economy is expected to contract by 1.7% this year after an expansion of 0.7% in 2010. Unemployment already at a 22-year record high at 22.85% in 2011 is expected to worsen to 24.3% of workforce in 2012. Inflation in Germany measured by the consumer price index (CPI) was recorded at 2.1% in March against 2.3% in February, both over the respective months of 2011. Frances fiscal deficit in 2011 was recorded at 5.2% of GDP, lower than budgeted 5.7% of GDP for the year. The government hopes to bring down the level to 3.0% in 2012 and to zero percent by 2016. Denmark has officially entered a state recession as the countrys economy contracted by 0.1% each in the fourth and third quarters of 2011. Recession in an industrialized country is assessed on the basis of its negative GDP growth in two consecutive quarters. According to the central bank of Russia, the country posted a current account surplus of $ 98.9 bn in 2011 against $ 71.1 bn in 2010 and $ 48.6 bn in 2009. The current account is a countrys broadest measure of its trade in goods and services. Standard and Poors has downgraded South Africas credit rating from stable to negative citing slow economic recovery and high unemployment levels as the main reasons for the downgrade. The European Central Bank has left its key lending rate unchanged at 1.0%. The Bank of England has left its key lending rate unchanged at 0.5%. The Reserve Bank of Australia, the central bank of the country, has left its key interest rate unchanged at 4.25%.

Editor: Syed Mahdi Mustafa

Published by: The Institute of Bankers Pakistan, M.T. Khan Road, Karachi 74200, Pakistan Phone: (021) 35689718, 35680783 | Fax: (021) 35683805 | Email: ibp@ibp.org.pk | Website: www.ibp.org.pk

General Disclaimer: IBP Weekly Economic Letter is based on information obtained from local and international print and electronic media. IBP has not verified this information and no warranty, expressed or implied, is made that such information is accurate, complete or should be relied upon as such. In no circumstance IBP and its team members would be liable for any incidental or consequential damage that may incur from the use of information contained in IBP publication(s).

Volume 7, Issue No. 13 |

April 6, 2012