Archives of BR Research - Pakistan Macroeconomics

1. What’s in a name?

   2011-05-24 09:06:25 GMT : (BR Research - Pakistan Macroeconomics/Fiscal Policy)

   “Tis but thy name, that is my enemy,” said Juliet Capulet, upon learning that the love of her life came from mortal enemies of her own clan. Continuing to address the object of her desire, “What’s in a name? That which we call a rose, by any other name would smell as sweet.” It is not often that a situation in contemporary times resembles this famous scene from the 16th century play as...

2. MDGs: long way off from Pakistan

   2011-04-25 06:38:33 GMT : (BR Research - Pakistan Macroeconomics/Political economy & socioeconomics)

   It won’t be too hard to guess that Pakistan is not on target to meet the Millennium Development Goals, aimed to be reached by 2015. The World Bank’s recent Global Monitoring Report 2011 reiterates this view, though with a more optimistic stance than any average Pakistani might hold. MDG goals focus on enhancing access to education, reducing gender disparity in education, eradicating pov...

3. KSE: much too soon to confirm a break-out

   2011-04-25 06:27:42 GMT : (BR Research - Pakistan Macroeconomics/Capital markets)

   After nearly 40 days of lifelessness, excitement is slowly crawling back in at the KSE. As it turns out, select buying by foreign and local investors has pushed the benchmark index to a level which is seen ‘pointing towards a recovery’. The KSE-100 ended at 11,954 points last week – its highest since March 14 – after marking an intra-week high of 12,023 points, which was also its bigg...

4. Two to tango

   2011-04-22 09:07:55 GMT : (BR Research - Pakistan Macroeconomics/Political economy & socioeconomics)

   ‘Reforms’ is perhaps one of the most resounding words in Pakistan these days. From drawing rooms to ‘chai-khanas’; from Islamabad to business hubs, this word is ringing bells everywhere -- with most participants passing the bucket to the government. The government, no doubt, is responsible for providing basic amenities for the populace. But it is increasingly becoming evident, in the ...

5. Investors playing the waiting game

   2011-04-22 08:47:29 GMT : (BR Research - Pakistan Macroeconomics/Inflation & Monetary Affairs)

   With the government counting on sovereign bond market and local commercial banks eyeing lucrative investment avenues, the second Treasury-bill auction of the fourth quarter was fairly well covered and successful. The amount of bids placed outstripped the auction target amount by 1.6 times. The government also accepted bids close to Rs233 billion, over and above the asked amount of Rs225 billi...

6. Current account: On the bright side?

   2011-04-20 10:53:04 GMT : (BR Research - Pakistan Macroeconomics/External Account)

   Finally, it’s that time of the month, when Pakistan’s economic managers can have their feel good moment, while the politicians brag and boast of their performance. And why shouldn’t they? The latest external account numbers released by the central bank confirm the notion that Pakistan’s balance-of-payment position is in safe waters -- $99 million to be precise, for the first nine mont...

7. Can pay, won’t pay!

   2011-04-14 05:34:38 GMT : (BR Research - Pakistan Macroeconomics/Fiscal Policy)

   By virtue of agriculture being a provincial subject, each province has in place a presumptive regime for the collection of income taxes from this sector. Going by the dictionary of Provincial laws, agricultural income consists of rents received from property used for agricultural purposes and income derived from cultivation or from owner-occupied buildings on the property. However, the quantum o...

8. Tax stalemate

   2011-04-12 05:51:18 GMT : (BR Research - Pakistan Macroeconomics/Fiscal Policy)

   Formulators of the national budget appear caught between a rock and a hard place as they scramble to produce a budget that not only curbs the widening gulf between government revenues and expenditures; but also face the unenviable task of improving documentation of the economy, and consequently, the tax net. Fears that the government will resort to increasing the burden of taxes on those already...

9. Remittances: the March factor

   2011-04-12 05:47:17 GMT : (BR Research - Pakistan Macroeconomics/External Account)

   Money doesn’t grow on trees. But when it comes to remittance inflows in Pakistan, the onset of spring sees a rather sharp increase in worker monies coming home to their families. The central bank’s latest data show that remittances inflows jumped 25 percent month-on-month in March 2011 – its highest month-on-month increase since March 2010, when it increased 30 percent over February 2010. ...

10. National Investment Trust

    2011-04-12 05:40:54 GMT : (BR Research - Pakistan Macroeconomics/Capital markets)

    The National Investment (Unit) Trust is getting bigger and bigger. Boosted by growth in dividend income along with Rs1.45 billion earned from the difference between unit selling and buying price (element income), the country’s leading and oldest mutual fund saw profits jump 29 percent in the first nine months of current fiscal year. As its fund managers remained focused increasing their holdin...

11. KSE: Mise en place for a whip up

    2011-04-11 05:32:00 GMT : (BR Research - Pakistan Macroeconomics/Capital markets)

    The countdown to budget FY12 has begun. And along with it should come the typical pre-budget uncertainty at the Karachi equity bourse, as is usually the case every year. The difference between KSE’s historical pre-budget gyration and this year, however, is that this time around, the signs are in, a bit earlier than usual. Normally, the KSE-100 sees a strong first quarter on account of health c...

12. CPI: Taking a nap

    2011-04-08 05:10:01 GMT : (BR Research - Pakistan Macroeconomics/Inflation & Monetary Affairs)

    The cyclical upward movement in food inflation and the partial passing of the international oil price hike and its impact on other items pushed the consumer price index higher by 1.48 percent month-on-month during March. The CPI index had fallen 0.74 percent month-on-month in February. The high-base effect is playing its role as year-on-year inflation increased by 13.16 percent -- lower than the...

13. ADB’s fiscal roundup

    2011-04-08 05:08:13 GMT : (BR Research - Pakistan Macroeconomics/Fiscal Policy)

    The Asian Development Bank has reinforced what many economists in the country already feared: an impending economic fiasco, with fiscal problems leading the way. The report, titled “Asian Development Outlook 2011”, recalled the fiscal faux pas committed by the country’s government, with the fiscal deficit widening from 5.3 percent of GDP in FY09 to 6.3 percent in FY10. The decline in tax...

14. Changing trends in T-bill auction

    2011-04-08 05:05:44 GMT : (BR Research - Pakistan Macroeconomics/Inflation & Monetary Affairs)

    The fourth and the last round of T-bill auctions of the current year has begun, with the government aiming to sell a total of Rs1150 billion worth of papers from all seven treasury auctions scheduled to be held in the current quarter. Just like the previous treasury auctions, market participation in the first treasury auction of this quarter, held two days back, remained strong with bids 1.4 tim...

15. Towards debt market development

    2011-04-07 07:19:54 GMT : (BR Research - Pakistan Macroeconomics/Capital markets)

    To say that Pakistan does not have a vibrant debt market would perhaps be an overstatement. A more appropriate expression would be that it’s ‘practically non-existent’. The reasons why this view has gained currency over the years are many; market prices of debt instruments are often different from broker rates, there are valuation issues, and the listing of corporate debt takes a lot of ti...

16. An eye for an eye?

    2011-04-06 04:52:08 GMT : (BR Research - Pakistan Macroeconomics/Political economy & socioeconomics)

    The issue of strike against extortion in Karachi is multifaceted – and it is increasingly becoming complex in the wake of the ‘political hijacking’ of the movement and the divide between the trade bodies.   Karachi, like several other big cities of past and present, has had a history of gang wars, and other types of crimes like kidnappings, protection money, and so forth. So yes, it ...

17. Count on, for better policy decisions

    2011-04-05 05:58:28 GMT : (BR Research - Pakistan Macroeconomics/Political economy & socioeconomics)

    After a hiatus 13 years, the government is finally undertaking the gigantic task of putting an official figure to the number of heads vying for the scant resources of Pakistan. The magnanimity of the task can be quite daunting. After all, many important policy decisions are based on this exercise until the next census takes place. Simple as it may seem, what hold particular importance vis-à-v...

18. Put the creative foot forward

    2011-04-05 05:45:34 GMT : (BR Research - Pakistan Macroeconomics/Political economy & socioeconomics)

    Leadership and creativity have some common traits: not everybody is good at it and those who are, are often envied, ridiculed, or despised for their guts. The biggest similarity, perhaps, is the debate on, whether leaders and creative folks are born – as in God-gifted – or made, is still on. Yet, in the case of creativity, at least one thing is certain: once creative reserves are proven, its...

19. Celebrate aid-dependency?

    2011-04-01 07:18:53 GMT : (BR Research - Pakistan Macroeconomics/Political economy & socioeconomics)

    Many might look at the $650 million and $125 million loans approved by the Asian Development Bank and World Bank through rose-tinted glasses. After all, they’re an extra brace on the crutches of fiscally-limped Pakistan. At least, so it seems. But the hitches and ‘ifs and buts’ attached to such loans is what makes one revisit the apparent idealism in such assistance. Reconstruction o...

20. Tax and the trust deficit

    2011-04-01 07:15:54 GMT : (BR Research - Pakistan Macroeconomics/Fiscal Policy)

    If there is one thing the present government is consistent in, it’s inconsistency. For the nth time, in its three years of rule, the government has taken back one of its earlier decisions – this time choosing to give the sales tax amnesty to the export-oriented sectors. While moves likes these show that democracy is working with people having a say in policy-formation due to freedom of ...