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PAKISTAN’S GDP GROWTH SLOWS TO 0.92% IN FIRST QUARTER Tuesday, 31 December, 2024 I 28 Jumada Al-Akhirah, 1446
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AGRICULTURE AND SERVICES SECTORS OFFSET LARGE DECLINE IN INDUSTRIAL OUTPUT
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PROFIT
Profit
THE MODEST GROWTH WAS PRIMARILY DRIVEN BY 1.43% INCREASE IN SERVICES SECTOR
NEWS DESK
AKISTAN’s economy posted a subdued GDP growth of 0.92% in the first quarter of FY25, a significant slowdown from the revised 2.5% growth recorded in FY24, according to data released by the National Accounts Committee (NAC). The modest growth was primarily driven by a 1.43% increase in the services sector and a 1.15% rise in agriculture. However, the industrial sector contracted by 1.03%, weighing down overall economic performance. Agriculture: Despite a sharp 11.19% contraction in major crops such as cotton (-29.6%), maize (-15.6%), rice (-1.2%), and sugarcane (-2.2%), the sector posted 1.15% growth. This was supported by a 4.89% rise in livestock and 2.08% growth in other crops. Industry: Industrial output fell due
The NAC revised FY24 GDP growth down to 2.5% from the earlier estimate of 2.52%. This adjustment was due to a reduction in agriculture growth to 6.18% (previously 6.36%) and a sharper contraction in industry at 1.65% (previously 1.15%). According to renowned brokerage, Topline Securities, the expected GDP growth for FY25 to range between 2.5% and 3.0%, supported by projected growth in agriculture (1.7%), industry (2.1%), and services (3.4%). The Asian Development Bank (ADB) recently raised its FY25 growth forecast for Pakistan to 3% from 2.8%. Similarly, the State Bank of Pakistan expects growth to remain in the upper half of the 2.5-3.5% range. Pakistan’s economic recovery faces challenges, including structural weaknesses and external vulnerabilities. While agriculture and services provide some optimism, the industrial sector’s continued contraction remains a concern.
Cabinet approves sale of 15% stake in Reko Diq to Saudi Arabia
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NA Speaker convenes in-camera meeting with PTI on Jan 2 ISLAMABAD
STAFF REPORT
showed resilience, growing by 1.43%, driven by a 5.6% increase in human health and social work activities and a 5.09% rise in information and communication. Other contributors included wholesale and retail trade (+4.58%) and accommodation and food services (+0.51%). Economic Outlook
to a 6.49% decline in the mining and quarrying sector and a 0.82% drop in large-scale manufacturing. Crude oil production was down 19.8%, gas fell by 6.7%, and coal production declined by 12.4%. Additionally, the construction industry contracted by 14.91%, largely due to a 16% drop in cement production. Services: The services sector
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National Assembly Speaker Sardar Ayaz Sadiq has called for a crucial in-camera meeting between the government and the Pakistan Tehreek-e-Insaf (PTI) on January 2, 2025. The meeting will take place at Parliament House at 11 AM and is expected to build on the discussions that began on December 23. The PTI, following internal consultations, is set to present two key demands in writing during the upcoming session. These demands include the formation of a judicial commission to investigate the violent events of May 9, 2023, and the November 26 crackdown on PTI workers in Islamabad, as well as the release of all political prisoners, including PTI founder Imran Khan. Former National Assembly Speaker and PTI leader Asad Qaiser reiterated these demands, stating that the party is firm on the need for a commission to investigate the May 9 and November 26 incidents. He also stressed the need for Khan’s release. The first round of talks on December 23 was described as positive, with both sides agreeing to continue the dialogue. Representing the PTI in the previous meeting were Qaiser, Sunni Ittehad Council (SIC) Chairman Sahibzada Hamid Raza, and Majlis Wahdat-eMuslimeen leader Allama Raja Nasir Abbas. The government’s side will be represented by a ninemember committee, which includes Deputy Prime Minister and Foreign Minister Ishaq Dar, PM’s political aide Rana Sanaullah, Senator Irfan Siddiqui, PPP’s Raja Parvez Ashraf, Naveed Qamar, Istehkam-e-Pakistan Party (IPP) leader Aleem Khan, PML-Q leader Chaudhry Salik Hussain, Balochistan Awami Party’s Sardar Khalid Magsi, and MQM-P leader Dr Khalid Maqbool Siddiqui. Sadiq praised the leadership of both the government and opposition for creating a constructive environment and expressed hope that these efforts would lead to greater political stability and a resolution of Pakistan’s challenges. The January 2 meeting is seen as a crucial step towards resolving the ongoing political polarisation and fostering cooperation between the government and PTI.
15% OF REKO DIQ ACQUIRED IN $540 MILLION; $150 MILLION PLEDGED TO SUPPORT DEVELOPMENT OF MINERAL RESOURCES IN BALUCHISTAN PROFIT
AHMAD AHMADANI
The federal cabinet has approved the sale of a 15% stake in the Reko Diq project to Saudi Arabia for $540 million under the InterGovernmental Commercial Transactions Act. to industry According sources, the federal cabinet has now allowed the Saudi government to acquire the shares through a direct transaction and this move is seen as a major step toward fostering bilateral ties and advancing Pakistan’s mining sector. The Kingdom of Saudi Arabia (KSA) will pay the amount in two installments. In the first phase, Saudi Arabia will acquire a 10pc stake in the project, for which $330 million will be transferred to Pakistan. The remaining 5% stake will be purchased in the second phase for $210 million. In addition to acquiring shares, the Saudi Fund for Development has pledged $150 million to support the development of mineral resources in Balochistan. Furthermore, Saudi
Arabia has shown keen interest in investing in mineral exploration activities in Chagai, where Reko Diq is located. The Reko Diq project, situated in Pakistan’s resource-rich Balochistan province, is among the world’s largest undeveloped copper-gold mines. The federal and Balochistan governments collectively own 50% of the project’s shares, ensuring substantial benefits for the region. Reko Diq’s development is expected to unlock significant economic potential for Pakistan. The project’s successful implementation will not only boost the mining sector but also create job opportunities, enhance infrastructure, and provide long-term revenue streams for both federal and provincial governments. This partnership with Saudi Arabia reflects growing international confidence in Pakistan’s mining sector. Saudi Arabia’s participation in the Reko Diq project aligns with its broader strategy to diversify investments and collaborate with strategic partners. The two-phased payment
structure ensures that Pakistan will receive substantial financial inflows over time, which will strengthen the national economy and bolster reserves. Additionally, the commitment from the Saudi Fund for Development to invest in Balochistan’s mineral resources signals a positive trajectory for future exploration and development projects. The Saudi investment is expected to pave the way for enhanced technological expertise and global best practices in the mining sector. It will also contribute to regional development, particularly in Balochistan, which has long been seen as underdeveloped despite its rich resource base. With the federal cabinet’s approval, all necessary formalities for the transaction will be expedited, and the first tranche of $330 million is anticipated shortly after the transfer of the initial 10% stake. The deal marks a new era of collaboration between Pakistan and Saudi Arabia, with both countries poised to reap significant benefits from this partnership.
IN TODAY’S ISSUE
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Revised IPP deals to save Pakistan Rs 1 trillion: Power minister irfan.farooq@pakistantoday.com.pk
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RENEGOTIATIONS AIM TO ALLEVIATE FINANCIAL STRAIN IN ENERGY SECTOR PROFIT
NEWS DESK
The renegotiation of agreements with Independent Power Producers (IPPs) has resulted in financial adjustments amounting to Rs1 trillion, Power Minister Awais Leghari announced during a media briefing. These savings, achieved through a collaborative government approach, were attributed in part to the support of Army Chief General Asim Munir. Agreements with five IPPs were terminated, saving Rs 411 billion, or Rs 7 billion annually. Settlements with eight bagasse-based IPPs added Rs 238 billion in total savings, translating to Rs 8.8 billion annually. Further negotiations with 16 more IPPs are expected to generate additional savings of Rs 481 billion. Talks with Chinese IPPs, excluding nuclear power plants, have also begun, with the re-profiling of one nuclear plant’s debt leading to a Rs 1.5 per unit tariff reduction. The minister addressed the solar net metering buyback rate, stating it would soon be lowered to reduce the financial burden of Rs150 billion currently borne by other consumers, while ensuring solar investors recover their costs within four years. On privatisation, he revealed plans to privatise three Distribution Companies (IESCO, GEPCO, and FESCO) by the end of 2025. Additionally, recent Nepra-approved amendments would be revoked, with key reforms in the regulatory authority underway to ensure fairness. Electricity prices have also seen a decline. The average price dropped from Rs48.70 per unit in June 2023 to Rs44.04, while industrial rates fell from Rs58.50 to Rs47.17 per unit. The elimination of Rs150 billion in cross-subsidies for the industry aims to foster growth, job creation, and economic stability. Reforms in the transmission system include restructuring the National Transmission and Despatch Company (NTDC) into three entities for better efficiency and competitiveness. The SouthNorth transmission corridor is under development, with plans for a 1000MWh battery energy storage system and improved infrastructure at substations. Efforts to reduce the circular debt, now at Rs2.2 trillion, are underway. Transitioning circular debt costs to the national budget is expected to ease electricity bills. Meanwhile, agricultural tube wells in Balochistan are being converted to solar power, supported by federal and provincial funds. The Bijli Sahulat Package continues to offer discounted tariffs for households and industries, while redundant generation assets are being prepared for auction. Special tariffs for electric vehicles are also in the pipeline to promote sustainability. The minister acknowledged challenges such as low recovery rates by Distribution Companies, which contribute to Rs250 billion in losses annually. However, he expressed optimism about ongoing reforms and reiterated his gratitude to the military leadership for their role in renegotiating IPP agreements.
PM Shehbaz Sharif hails PML-N’s legacy on Founding Day ISLAMABAD
STAFF REPORT
Prime Minister Muhammad Shehbaz Sharif on Monday extended his heartfelt congratulations to the Pakistan Muslim League-Nawaz (PML-N) on the occasion of the party’s founding day. Reflecting on the party’s historical significance, the prime minister emphasised the pivotal role of the All India Muslim League and its leaders, including Quaid-eAzam Muhammad Ali Jinnah, in the creation of Pakistan. In his message, the prime minister stated, “The formation of the Muslim League 118 years ago reignited the desire for an independent homeland for Muslims. Through persistent struggle, the Muslims of the subcontinent were granted the gift of a separate and free nation, Pakistan.” He further added, “In line with the vision of Pakistan’s
founding fathers, it is our collective responsibility to work together for the country’s progress and prosperity.” Prime Minister Sharif also highlighted the contributions of Pakistan Muslim League (N) under the leadership of former Prime Minister Nawaz Sharif, noting that the party has been dedicated to the country’s development for over three decades. “The history stands testimony to the fact that the PML-N and its leader, Nawaz Sharif, have always prioritized the welfare of the people and upheld principled politics,” said the Prime Minister. “To safeguard Pakistan, the PML-N made sacrifices, placing the nation’s economy and security ahead of its political interests.” The prime minister expressed his gratitude towards party workers and political leaders, who, alongside the party, boldly stood against military rulers and raised the banner of truth.
He also acknowledged the challenges faced, including imprisonment, but reaffirmed the PML-N’s commitment to unity and national interest over divisive politics. Despite efforts to sideline Nawaz Sharif from politics, the Prime Minister praised the former leader’s political wisdom and unwavering commitment to the nation. “The sacrifices made by Nawaz Sharif and the PML-N have strengthened the foundations of Pakistan,” he said. During the PML-N’s tenure, significant strides were made in the development of industries, agriculture, and the economy. The prime minister also lauded the party’s success in improving diplomatic relations with friendly nations, which contributed to the welfare of the common man. “Today, under the leadership of Nawaz Sharif, PML-N continues to represent the aspirations of the people, working tirelessly for the nation’s progress,” said Prime Minister Sharif.
Imran Khan rules out deal with govt after spending 1.5 years in jail RAWALPINDI
STAFF REPORT
Aleema Khan, the sister of Pakistan Tehreeke-Insaf (PTI) founder Imran Khan, said that the former prime minister has refused to strike any deal, asking “why he would enter any deal when he has already spent one-anda-half years” in prison. “The PTI founder said that his cases have been wrapped up and he was not making a deal [with the government] over this matter,” said Aleema while speaking to media persons outside Adiala jail on Monday — where her brother is incarcerated. The 72-year-old cricketer-turned-politician has been behind bars since August last year after he was sentenced in Toshakhana case-I — one of the dozens cases registered against the former premier since his ouster
from power in April 2022. Aleema, who has recently been taking part in party’s political matters, said that Khan has vowed to fight his cases and will not accept any offer to be placed under house arrest in Bani Gala. The PTI founder, she said, has questioned how were the cases of those leaders who left the party were forgiven. “He said that the May 9 conspiracy was hatched to crush the party,” said Khan’s sister. Aleema said her brother has reiterated the demands of a judicial probe into May 9 riots and November 26 late-night crackdown and release of “political prisoners”. Earlier, PTI Senator Shibli Faraz refuted the “false perception” that Khan was seeking relief for himself in negotiations with the Pakistan Muslim League-Nawaz (PML-N) coalition government.
The coalition government and the embattled PTI finally came to the table last week to defuse political tensions in the country. Negotiating committees, formed by the government and the PTI, conducted their much-hyped meeting in a conducive environment and resolved to continue the dialogue process earlier this month. NA Speaker Ayaz Sadiq, who presided over the meeting, had said that the next session will be held on January 2 and PTI’s team would present a charter of their demands in the huddle. Faraz accused the ruling coalition of spreading false propaganda that PTI founder was seeking relief for himself. He clarified that negations would be held on the point that “all the political prisoners” should be released. A day earlier, Federal Minister for Infor-
mation and Broadcasting Attaullah Tarar said the Centre was ready to cooperate with the Khyber Pakhtunkhwa government in all
sectors and hold talks but its purpose was not to give anyone a break or NRO but to bring political stability in the country.