Tuesday, December 10 2024

US diplomat terms economic ties important
US Charge D'Affaires Natalie Baker has said that the economic relationship with Pakistan is important for the United States, which has continued to invest in the South Asian nation. "We recognise Pakistan's enormous potential. It is one of the world's most populous countries, with a growing and dynamic young population," she remarked while speaking at the Fifth Pakistan-America Business Forum, organised by the Rawalpindi Chamber of Commerce and Industry. She mentioned that the US was Pakistan's largest export market globally as Pakistan sent around 16% of its total exports to the US each year. "Pakistan's exports to the US have grown substantially over the last decade. This is a testament to the robust economic relationship we share." Similarly, she said, the US investors contributed enormously to Pakistan's economic development. Right now, over 80 US firms directly employ 120,000 Pakistanis and indirectly support the livelihoods of over a million Pakistani workers.
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Remittances soar 29% to $2.9b
Pakistan recorded a significant inflow of workers' remittances amounting to $2.9 billion in November 2024. This represents a remarkable year-on-year (YoY) growth of 29.1% compared to November 2023, highlighting a robust increase in the contributions of overseas Pakistani workers. According to the State Bank of Pakistan (SBP), cumulatively, workers' remittances for the first five months of the fiscal year (July–November FY25) reached $14.8 billion, reflecting a growth of 33.6% compared to $11.1 billion during the same period of FY24. This notable rise underscores the increasing reliance on remittances as a crucial component of Pakistan's foreign exchange earnings. "These sustained remittances are most likely driven by a shift towards official channels," said Waqas Ghani Kukaswadia, JS Global analyst, while talking to The Express Tribune. "The recent trend underscores a newfound confidence in the stability of the Pakistani rupee with a narrowing gap between interbank and open-market exchange rates, thanks to tightened foreign exchange regulations."
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One tariff too many
Since winning the presidential election, Donald Trump has indicated his plans to extensively employ tariffs to revive the United States’ economic power. The question is: will such threats work for the US when Washington’s extensive use of financial sanctions seems to be failing? On Dec 1, he threatened to punish the Brics (Brazil, Russia, India, China and South Africa) countries with a 100 per cent tariff and shut them out of the US markets if the group tried to undermine the dollar and create their own currency. Writing on a social media platform, Mr Trump said he would also act if the bloc supported another currency to replace the dollar. The Guardian wrote that fears of a global trade war had risen after Mr Trump threatened to impose tariffs on countries in the Brics group. If implemented, the paper said, a 100pc tariff would sharply drive up the cost of goods from Brics members, fueling US inflation and destabilising global trade flows.
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CORPORATE WINDOW: Business in limbo
While improving macroeconomic indicators in Pakistan offer some comfort, they have yet to meaningfully invigorate the private sector, the key driver of economic growth. Commercial activity has picked up, supported by the easing of import restrictions, and the capital market is performing beyond expectations. Nevertheless, business sentiment reportedly remains subdued. “Businesses in Pakistan must embrace new strategic thinking, leveraging technology and innovation to avoid unsustainable losses,” remarked a senior economist, speaking anonymously. “Such an approach demands realism and a clear understanding of interests, risks, and opportunities. “While the turbulent domestic and global environment poses new challenges, it also offers opportunities. Rather than seeking patronage, businesses must focus on fostering productivity. If the market is becoming more competitive, then competition is precisely what the businesses are all about,” he added.
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FBR to bar passengers from bringing in ‘commercial quantity’ of goods beyond $1,200
The Federal Board of Revenue (FBR) has decided to bar travellers coming from abroad from bringing any goods beyond $1,200 in value, it emerged on Monday. An FBR notification dated December 6, a copy of which is available with Dawn.com, proposed changes in the Baggage Rules, 2006, under Section 219 of the Customs Act, 1969. It changed the definition of “commercial quantity” in the rules from a quantity of goods imported prima facie for trading or pecuniary gain and not for personal use or gift and imposed a value limit of $1,200. It also defined the commercial quantity for mobile phones as the “quantity exceeding one phone other than the one in personal use of the passenger”. Regarding penalties for those bringing in the commercial quantity of goods, the notification said the goods would not be released even on payment of duty, taxes and redemption fine. The notification said that any objections or suggestions to the FBR for consideration should be sent within seven days of the notification’s publication in the official Gazette.
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