Business

ADB to help Pakistan build climate–resilient infrastructure

Published

7 months ago

Farwa

INCHEON: In a major development, the Asian Development Bank (ADB) expressed commitment to help build the much-needed climate-resilient infrastructure for Pakistan — which faced over $30 billion in losses after the devastating floods caused by heavy rains last year.

It will be a great assistance by one of the world’s top financial institutions to the cash-strapped nation that is still struggling to strengthen its economy which suffered a serious blow caused by economic slowdown during the deadly Coronavirus, worldwide shortage of petroleum products and food inflation after the Russia-Ukraine war, and devaluation of Pakistani currency against the dollar.

With an objective of improved preparedness, the bank would help Pakistan in “strengthening infrastructure in such a way that if similar floods take place in future that infrastructure is strong enough to stand there,” Director General of Central and West Asia Department Yevgeniy Zhukov said while talking to APP on the sidelines of ADB’s 56th annual Board of Governors meeting that concluded last week in South Korean city – Incheon.

He said a lot of work was being done in the flood-emergency-related assistance adding that the focus would not only be on repairing the damages caused by last year’s floods but also on making the structures flood-resilient.

Seconding Zhukov’s damage-mitigation strategy, Country Director Pakistan Resident Mission Yong Ye told the news agency that some temporary structures would be in place hopefully this year before the possible flood in summer. He said there would be some protections “before the flood comes and the infrastructure is made climate-resilient.”

He said some of the existing infrastructure was damaged during last year’s floods; however, these had been restored with the ADB’s prompt support.

Seeing the wide-scale destruction and the loss of billions of dollars to the Pakistani economy, foreign experts and donor agencies described it as one of the top countries facing severe impacts of climate change.

In future, Yong said the bank looked at a much more comprehensive approach and was carrying out an upstream assessment of each factor of climate resilience/disaster resilience and analytical work to devise a strategy and an open institutional set-up for ‘quickening the measures.’

Yong said the ADB had also established its national disaster risk management funds under which it would provide the community flood protection structure.

As Asia and the Pacific’s climate bank, the ADB aims to deliver $100 billion in climate financing from 2019 to 2030.

Last week during the annual moot, the ADB launched the Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP), which would use guarantees from partners as leverage to accelerate billions of dollars in the much-needed climate investment. The facility would be effective from early 2024.

The finance facility would also be applicable to Pakistan not only for designing new projects but also preparing a strategy to effectively counter the negative impacts of climate change. This facility could be used to channelize the funding.

This year, the ADB conference was held at a time when Pakistan recently witnessed massive floods caused by torrential rains, inflicting losses of over $30 billion to the national economy that created issues of food security, damaged infrastructure, washed away livestock and collapsed houses.

Weather experts have forecast another spell of heavy downpours in parts of the country this season, which could lead to further devastation of the already calamity-hit nation.

Business

November inflation to spike on gas price adjustment, dashing slowdown hopes

Published

3 days ago

Farwa

CPI likely to rise to 28.6-29.6% year-on-year in Nov.
Inflation rate could register 2.1% month-on-month jump.
Weekly SPI on Nov 16 showed 480% surge in gas prices.

KARACHI: Inflation is expected to surge in November, primarily due to a massive hike in gas prices, according to brokerage reports released on Wednesday.

The consumer price index (CPI), which measures changes in the prices of goods and services, is likely to rise to 28.6-29.6% year-on-year in November, up from 26.9% in October.

A report by brokerage firm Insight Securities predicts that the inflation rate will register a 2.1% month-on-month jump, defying earlier expectations of a gradual slowdown from September onwards. Optimus Capital Management estimates that the CPI will increase by 2.9% month-on-month, primarily driven by an 11.6% jump in the housing index due to gas price revision and a 1.6% increase in the food index.

The primary cause behind the expected spike in November inflation is the adjustment of recently imposed fixed charges within the gas tariff structure. The weekly sensitive price index (SPI) inflation released on November 16 showed an astonishing 480% surge in gas prices.

However, a slight respite is expected from a 4.0% decrease in the transport index due to lower average fuel prices in November. The impact of the gas price hike was partially mitigated by the decline in fuel prices and the month-on-month fall in the food commodity adjustment (FCA).

Food inflation is attributed to a sharp increase in the prices of perishable items such as onions, tomatoes, potatoes, and eggs, as well as tea. Despite an increase in supply from imports, wheat prices still rose month-on-month, while sugar and cooking oil showed a significant decline during this period, based on weekly SPI data from the Pakistan Bureau of Statistics.

The recently implemented axle load regime, which limits the weight of goods transported by trucks, could put some pressure on the price levels of goods.

The higher October fuel cost adjustment (FCA) demanded at Rs3.5 per kilowatt hour (to be applicable in December) on electricity charges and a second-round impact of gas price increase could keep inflation under pressure. However, the base effect during the second half of the fiscal year is likely to help absorb the impact.

Commodity and energy prices, along with the exchange rate of the rupee against the US dollar, will remain important factors in keeping the CPI under control.

The reports projected the average inflation for the first five months of the fiscal year 2023/24 (July-June) to be 28.5%, compared with 25.2% in the same period last year and with an estimated ending at 19.4% year-on-year in June 2024.

They predicted that the State Bank of Pakistan (SBP) is likely to maintain the interest rate in its upcoming monetary policy committee (MPC) meeting due to the higher-than-estimated inflation in November. However, the SBP could opt to initiate an easing cycle in the first quarter of 2024, given the high base effect in the second half of the fiscal year.

Business

Petrol price likely to remain unchanged in next fortnightly review

Published

3 days ago

Farwa

Petrol prices to hold steady in next review.
Diesel and kerosene prices to decline from Dec 1.
Next fortnightly review due tomorrow (Nov 31).

KARACHI: The prices of petroleum products will not see any major change in the upcoming fortnightly review with diesel and kerosene rates expected to go down slightly, according to the industry calculations.

According to a The News report published Thursday, the ex-refinery and ex-depot prices of petroleum products did not register any major fluctuation as global crude prices eased in recent days.

The ex-depot price of petrol, the most widely used fuel in the country, is slightly higher by Rs0.19 per litre to Rs281.53 per litre compared to the current price of Rs281.34, industry officials said.

The ex-depot price of high speed diesel (HSD), used mainly for transport, has been worked out at Rs290.47 per litre for the next fortnight compared to the existing price of Rs296.71 , showing a decline of Rs6.24 rupees per litre.

The ex-depot price of kerosene, used for cooking and lighting in rural areas, has been worked out at Rs202.16 per litre compared to the current price of Rs204.98, indicating a decrease of Rs2.82 per litre.

The ex-depot price of light speed diesel, another variant of diesel, has been worked out at Rs176.18 per litre for the next review against the present price of Rs180.45, registering a decline of Rs4.27 per litre, the report stated.

According to the industry’s working, the estimated exchange adjustment of petrol is zero whereas it is Rs1.80 per litre for HSD.

However, the industry officials said that the prices of petroleum products can change with the exchange loss as the industry did not put the exchange loss figure in its working for the next review.

The country fixes fuel prices on a fortnightly basis after evaluating fluctuating international energy market costs and the rupee-dollar parity to transfer the impact on domestic consumers.

They said global oil prices remained under pressure during November, falling below $75 a barrel in mid-November.

WTI was trading at $76.5 a barrel on November 29, down by nearly 7% as compared to October 29. Brent was down by 5.4% in the past month, trading at $86.35 a barrel, they added.

Business

Another day, another high: PSX continues bull run as KSE-100 goes past 61,000 points

Published

4 days ago

Farwa

KARACHI: The Pakistan Stock Exchange (PSX) on Wednesday reached another historic high as the bulls continue to dominate the benchmark KSE 100 index with hopes of the State Bank of Pakistan lowering the policy rate in the coming days.

Benchmark KSE-100 index at 10:09am. — Screengrab/PSX website

The benchmark index gained 702, or 1.16%, during the intraday trade and stood at 61,433 points at 10:09am.

Commenting on the bull run, Head of Research at Pakistan-Kuwait Investment, Samiullah Tariq said that the market was reacting positively because it expects an interest rate cut, a quick International Monetary Fund review and strong profitability of companies.