11/01/2022, 22:02 CORONAVIRUS - The situation in Pakistan | Flanders Trade

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Home › Nieuws › CORONAVIRUS - The situation in Pakistan

CORONAVIRUS - The situation in Pakistan

1. General situation
Following a new spike in the COVID-19 figures, the federal government
has placed 24 major cities, including Islamabad, under new restrictions
till 15 September; markets to close at 8:00 pm, 50% work from home for
all public and private offices, indoor dinning banned.

Sind provincial government has also imposed a 10-day partial

lockdown. The lockdown covers closure of markets, government offices,

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cancellation of exams. However essential business; like grocery stores,

food, fuel stations, banks will remain open.

Inbound international flight operation is still reduced by 20% with

rapid antigen testing upon arrival imposed, in some cases followed by
self-isolation. Larger social, religious, political gatherings are still
banned.

Vaccination:

Pakistan has passed the 59 million mark for total COVID-19 vaccine
doses administered of which 18 million persons are fully vaccinated, 45
million have been administered the first dose. The government has
announced booster shots for overseas travelers to be administered at a
cost of PKR 1,270.

2. Exit strategy
Asian Development Bank has approved a loan of $500 million to
Pakistan to procure 39.8 million doses of COVID-19 vaccines and related
material. The government can claim $150 million of the load on
account of previous purchases and the remaining amount will be
available for future procurements.

Credit disbursement to the agriculture sector increased by 12% on year-

on-year basis to PKR 1.37 trillion in FY21. According to the state bank of
Pakistan, 49 financial institutions managed to achieve 91% of their
assigned credit target of PKR 1.5 trillion for the year.

3. Economy
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Pakistan received a total of $1.8 billion from expatriate Pakistanis since

the launch of RDA (Roshan Digital Account) in the first 10 months if its
launch launched by the State Bank of Pakistan in September 2020. Two
thirds of this inflow ($1.28 billion) have been invested in the Naya
Pakistan Saving Certificates issued by the government. Pakistan
received the 3rd largest overseas workers remittance amounting to
$2.71 billion in July 2021. July was the 14th successive month in which
overseas remittances remained above $2 billion. The workers
remittances surged by a record $29.4 billion in FY21 compared to the
previous record of $23.1 billion in FY20. Major contributors were Saudi
Arabia ($641 million), UAE ($531 million), UK ($393 million) and USA ($312
million).

The ministry of finance has announced major incentive for the IT and
telecom sector including a PKR 10 billion fund to cash awards to IT
companies against their exports and offer of 5% rebate on IT exports.

Following Pakistan Telecommunication Authority’s Mobile Device

Manufacturing policy, local manufacturing of mobile devices (12.27
million including 4.87 million 4G smartphones) has surpassed imports
which were recorded at 8.29 million during the period Jan-July 2021.

Cement sales in Pakistan posted a growth of 35.98% as total domestic

sales increased from 2.80 million tons in Aug 2020 to 3.81 million tons
in Aug 2021.

Lakson Group signed an agreement with Air Arabia group to launch Fly
Jinnah, Pakistan’s first low-cost airline serving domestic and
international routes from Pakistan.

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The number of cars sold in Pakistan soared by 114% to 24.918 units in

July 2021 (compared to 11.659 units in July 2020) due to a decline in
auto financing mark up and a reduction in car prices in the budget.
During the last financial year car financing also increased by 46%.

Airlift a Pakistani startup has announced securing a series-B financing

of $85 million by overseas financers. The financing is one of the largest
technology startup investments in MENA region. The company is
building a platform for consumers, drivers and SMEs to move consumer
goods. While Pakistani startups received $77 million in funding in 2020,
they managed to invite investment of around $228 million in 2021 till
July.

Engro Corp has announced that it will enhance its investment in

telecom infrastructure sector to PKR 21.5 billion through its
subsidiaries EngroConnect and EnfraShare Ltd focusing on providing
optic fiber infrastructure to its BTS mobile towers.

Imports June 2021

Power generation mach.          $325.3 M +18.4%  $274.7 M - June 2020

Palm oil                                 $271.3 M +98.6% $136.6 M - June 2020
Sugar                                     PKR 69 M + 56.82% - May 2021
Milk & Dairy products             $15.8 M +33.5% $11.9 M - June 2020
Iron & steel                             PKR 22.8 Bn (-)31.37% PKR 33.2 Bn
- May 2021
Tires & Tubes                          PKR 5.3 Bn +52.66% PKR 3.4 Bn - May
2021
Tea                                        PKR 6.8 Bn (-)9.55% PKR 7.5 Bn - May
2021

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Aircrafts, ships                       PKR 12.3 Bn +73.95% PKR 7.1 Bn - May

2021
Office machinery                    $44.5 M +17.4%  $37.9 M - June 2020
Wood & cork                          PKR 2.2 Bn +36.67% PKR 1.6 Bn - May
2021

Imports July 2021

Textile machinery                    $64.6 M (-)36.13% - June 2021

Mobile phones                        PKR 19 Bn(-)40.46% PKR 32 Bn - June
2021
LNG                                       $271.7 M +111.7% $128.3 M - July 2020

a. Economic impact
The current account deficit in Pakistan stayed at negative $773 million
in July 2021 compared to a surplus of $583 million in the same month
last year following increase in imports. However, this deficit was less
than the deficit of $1.62 billion in June 2021.

b. Trade barriers
No new trade barriers imposed or lifted.

Botst u buiten de EU op handelsbarrières of andere problemen op het

vlak van markttoegang? Laat het ons weten via dit
online aangifteformulier. Wij analyseren uw aangifte en maken die over
aan de bevoegde instanties.

c. Economic outlook
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Pakistan has received a funding of $2.77 billion from the IMF as part of
its program to boost global economy and supporting emerging and
low-income countries in dealing with the mounting debt and COVID-19
crises. There is no loan return date and no conditions attached to this
low interest loan which is not part of the ongoing IMF program for
Pakistan.

According to a survey conducted by the Overseas Investors Chamber of

Commerce and Industry the overall Business Confidence Score in
Pakistan stands at +9%, an improvement of 59% from the previous
(-)50% score in the survey conducted in 2020.

In view of Pakistan’s progressing economy and implementation of

economic reforms, S&P Global Rating has given a B- (long term) & B
(short term) rating with a ‘stable outlook’.

Power sector in Pakistan reported an all-time high level of generation

and transmission of 24.467 MW in a single day in 13 August. The
increased demand for power generation and consumption is attributed
to a resurgence of activities in all the three major sectors, industry,
agriculture and services.

The large-scale manufacturing sector grew at a 16-year high level of

14.85% in the fiscal year ending June 30 following the government’s
pro-growth policies leading to expansion in food, textile, automobile
and construction-related industries. This growth comes after a
negative growth of 9.8% in July 19-June 20. Out of a total 15 subsectors
10 reported positive growth while remaining 5 subsectors posted
negative growth. Significant production increase was posted in textiles,
food, beverages, tobacco, coke and petroleum products,

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pharmaceuticals, chemicals, non-metallic minerals, automobiles, iron

and steel, fertilizers and paper & board sectors.

Net FDI in various sectors in Pakistan like energy, telecom and banking
slowed down to $89.9 million in July the 1st month of the current
FY2021-22. The drop in the inflow of FDI was due to higher outward
payment by local projects being run on foreign investments.

d. Short term opportunities

Flemish companies continue to write to the post in order to prepare
the grounds for the opening of the market when the situation in
Pakistan normalizes again. Pakistani companies have started
contacting this office with new trade leads which are being forwarded
to FIT.

e. Long term opportunities

Apart from the healthcare & medical and building & construction
sectors, the long-term opportunities for Flemish countries would
depend on the offer and expertise of Flanders region which are already
well regarded in Pakistan (steel, metals, chemicals, raw materials,
industrial machinery and goods, etc.)

5. Useful links
National Institute of Health (NIH COVID-19 Dashboard real-time):
http://covid.gov.pk  

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6. Dossier Coronavirus
Het coronavirus heeft een wereldwijde impact, niet alleen op de
gezondheid maar ook op de economie. Ook uw export kan hiervan
gevolgen of zelfs hinder ondervinden.

FIT monitort de risico's dagelijks en ons buitenlands

netwerk informeert u over alle implicaties voor Vlaamse exporteurs op
hun internationale activiteiten.

In het dossier Coronavirus vindt u een aantal nuttige tips, adviezen en

inzichten in de economische impact van de verspreiding van het virus
op internationaal ondernemen.

Met vragen over internationaal ondernemen in tijden van Corona, kan

u terecht bij exportadvies-corona@fitagency.be.

13 september 2021

Vertel het verder

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