Government to take decision on
PIA's future today
Karachi
Stock Exchange:
The government would
decide about the
future of Pakistan International Airlines (PIA) in the light of a presentation by the management of national flag carrier to the Prime Minister
today. The management of the PIA
would be presenting various
options to the
Prime Minister. These
include a plan aimed at reducing the losses of national
flag carrier by Rs 400 million to Rs 500
million by the
end of December
2013 and then
to achieve the
break even in a year's time if everything goes according to the plan.
They said that the PIA has been
incurring around 3 billion losses which would be reduced to Rs
2.5 billion by
the end-December 2013.
Addition of some
new planes to
the fleet would
also help achieve
fuel efficiency. Management plan
involves considerable reduction in losses by operating flights on profitable
routes, inducting new planes and by checking pilferage in ticketing and
catering. The Prime Minister would decide whether it should give the PIA business plan a chance or privatize
it.
Government borrows Rs 600 billion
in two months
Karachi
Stock Exchange: A
shortfall in the revenue collection has resulted in massive government
borrowing from domestic banking sector
particularly the State Bank Of Pakistan (SBP). The
federal government's borrowing for
budgetary support from the central bank has crossed Rs 600 billion mark in first two months of the
current fiscal year. Massive borrowing from the banking system clearly reflects
that the government is still facing financial difficulties, despite taking
several measures to increase its revenue collection and curtail the rising expenditures.
The government had
increased General Sales
Tax (GST) from
16 percent to
17 percent in
the Budget 2014 to enhance its
income. In addition, the government has increased power and gas tariff to
reduce the burden of subsidies, however, the government steps for the higher
revenue generation seems to have failed as the budgetary borrowing is continuously increasing,
they pointed out. They said
borrowing of Rs
500 billion to the
power sector to settle the
circular debt issue is also a reason for higher borrowing during this
fiscal year. According to the State Bank
of Pakistan the federal government's borrowing for budgetary support has registered a notable increase during two months of current fiscal year (FY14).
The federal government budgetary borrowing rose to Rs 637 billion in
July-August of FY14 against retirement of Rs 78.393 billion in the same period
of last fiscal year.
Services trade deficit falls by 42
percent
Karachi
Stock Exchange: Pakistani
international services trade deficit stood at $159 million during July 2013
against $274.82 million recorded in the corresponding month last year,
representing a decline of 42.16 percent. During the month under review, the
economy hired foreign companies’ services
worth $543.88 million
while selling services abroad worth
$384.92 million. The
country’s services exports (money
inflow) stood at $342.89 million and imports (outflow) at $617.71 million in
same month last year, representing an increase of 12.26 percent in exports and
11.95 percent decline in imports of the country services, according to the Pakistan’s Bureau of Statistics (PBS).
During July 2013, services exports declined by 20 percent and imports by 9.37
percent when compared
to the previous
month. During June
2013, exports stood
at $481.34 million
and imports at
$600.12 million. The country is not expected to reverse or break-even in
the services trade in the short-term given the comparatively backward services
industry. Pakistan’s soaring need for foreign transport, insurance and consultancy
services as well as increased expenditure on financial services will also
likely contribute to the expected hike in the deficit. Pakistan’s trade deficit
fell by 3.07 percent for the first two months of the fiscal year 2013/14.
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