Businessmen for economic revival plan

ISLAMABAD (APP): The business community here on Tuesday called for forming a think tank comprising of economic experts and business leaders that should focus on devising a comprehensive strategy to turn around the dwindling national economy. They were of the view that reviving the economy was essential requirement to attract investment, create jobs, promote trade, industrial activities and exports and generate more revenue for the country. In a statement President Islamabad Chamber of Commerce and Industry Sheikh Amir Waheed said that the SMEs were engine of economic growth, but this sector was currently facing many challenges in Pakistan. He emphasized that the incoming government should focus on forming a new SME policy in consultation with private sector to address the key issues of SME sector and create conducive environment for it so that this important sector could drive the economy towards fast growth trajectory. Meanwhile, M. Naveed Malik, Senior Vice President and Nisar Mirza, Vice President have also demanded that govt should give top priority to the economy for progress.

Bike production up 16pc

ISLAMABAD (APP): The production of motorcycles during the first eleven months of fiscal year (2017-18) increased by 15.44 percent as against the corresponding period of last year, PBS reported. As many as 2,650,233 motorcycle were manufactured during July-May (2017-18) against the output of 2,295,846 during July-May (2016-17), showing growth of 15.44 percent, the latest PBS production data revealed. The production of cars and jeeps witnessed 20.10 percent increase during the period under review as 214,904 jeeps and cars were manufactured during July-May (2017-18) against the production of 178,944 units during July-May (2016-17). The production of light commercial vehicles (LCVs) witnessed an increase of 18.54 percent in production during the period under review by growing from 22,927 units last year to 27,178 million during 2017-18. The production of tractors also increased from 50,049 units last year to 67,371 units, showing growth of 34.61 percent while the production of trucks increased by 20.27 percent, from 7,104 units to 8,544 units.

 However, the production of buses during the period under review witnessed negative growth of 31.54 percent by going down from the output of 1,043 units to 714 units. zxMeanwhile, on year-on-year basis, the production of motorcycles increased by 14.57 percent by growing from the output of 231,295 units in May 2017 to 264,984 units in May 2018.

The production of tractors also witnessed upward growth of 19.56 percent by growing from 5,746 units in May 2017 to 6,870 units in May 2018. The production of jeeps and cars increased by 0.74 percent as the country manufactured 18,227 jeeps and cars during May 2018 against the production of 18,094 units during May 2017, the PBS data revealed.

The production of tractors also witnessed upward growth of 19.56 percent by growing from 5,746 units in May 2017 to 6,870 units in May 2018. The production of LCVs witnessed decrease of 12.96 percent in production by going down from the output of 2,368 units in May 2017 to 2,061 units in May 2018.

The output of trucks witnessed negative growth of 7.02 percent by going down from the output of 869 units in May 2017 to 808 units in May 2018 while the output of buses declined by 19.51 percent by declining from 82 units to 66 units.

It is pertinent to mention here that the overall Large Scale Manufacturing Industries (LSMI) of the country witnessed growth of 6 percent during the first eleven months of the current fiscal year compared to the corresponding period of last year.

The country’s LSMI Quantum Index Numbers (QIM) was recorded at 149.19 points during July-May (2017-18) against 140.75 points during July-May (2016-17), showing growth of 6 per cent.

The highest growth of 3.62 percent was witnessed in the indices monitored by Ministry of Industries, followed by 1.58 percent growth in the products monitored by Provincial Bureaus of Statistics (PBOS) and 0.80 growth in the indices of Oil Companies Advisory Committee (OCAC).

On year-to-year basis, the industrial growth increased by 2.76 percent during May 2018 as compared to same month of last year, however, on month-to-month basis, the industrial growth decreased by 11.63 percent in May 2018 when compared to growth of April 2018, the PBS data revealed.

China to invest $14b in S Africa

PRETORIA (AFP): South African President Cyril Ramaphosa on Tuesday announced that China would invest $14 billion in the country after he held talks with President Xi Jinping in Pretoria on the eve of a multilateral summit. Ramaphosa came to power in February pledging to revive the economy and attract investors after Jacob Zuma was ousted from office at the end of a nine-year reign dominated by graft scandals, low economic growth and record unemployment. "We have signed several agreements and memorandums of understanding that are intended to further deepen our relations, including investment commitments to the value of $14 billion," Ramaphosa said, standing beside Xi. "Bilateral trade has not reached its potential," Ramaphosa adding, saying the investment would focus on infrastructure, agriculture and technology. Xi arrived in South Africa ahead of a summit of BRICS emerging economies -- Brazil, Russia, India, China and South Africa -- starting on Wednesday. "China... and will take active measures to expand imports from South Africa so as to support the government," Xi said.

Among the deals signed on Tuesday was a $2.5 billion loan to South Africa's state-run power company Eskom, which is burdened by massive debts and embroiled in graft allegations involving Zuma's government.

IMF warns surpluses aggravate tensions

WASHINGTON (AFP): As growing trade frictions engulf much of the world, the International Monetary Fund warned Tuesday that large trade surpluses in Germany and China together with the large US deficit could exacerbate that conflict. But in a message that seem directed largely at US President Donald Trump, the IMF once again warned against using protectionist measures to address trade issues, since they can harm growth without resolving the problem. In addition, US fiscal stimulus -- like the massive tax cut approved in December -- "is leading to a tightening in monetary conditions, a stronger US dollar, and a larger US current account deficit," the IMF said. Those are precisely the developments Trump railed against on Twitter last week, breaking with longstanding tradition to chastise the Federal Reserve for raising interest rates, which has caused the dollar to strengthen. Trump has pursued a multifront trade confrontation with key economies, especially China, but also has singled out Germany and the European Union in general for allegedly treating the US unfairly.

The tariffs he imposed have angered trading partners and prompted swift retaliation.

In its latest External Sector Report, the IMF again urged surplus countries to take steps to boost demand and reduce savings to lower the excess current account imbalance, which is comprised largely of international trade.

Germany's surplus is "substantially stronger" than justified by the state of the economy, while those in China and South Korea were classified as "moderately stronger," as was that of the European Union.

Those countries "should focus their efforts on reforms to reduce excess saving, through safety net and pension reforms," the report said. For Germany, "boosting public investment would also help reduce excess surpluses."

That has been a long-standing recommendation of the IMF and other economists who have urged Germany to spend more and encourage more demand to help with the global recovery.

Germany posted a surplus of eight percent of GDP last year which is in part fueled by the fact the euro's value has been held down by the weak economic performance in member nations, including Greece, which makes German exports more competitively priced.

In China, the IMF cautions that the economy has been "overly reliant on credit and investment (which) could culminate in an abrupt growth slowdown and a resulting resurgence of large external surpluses."

That outcome "could be met with stiff protectionist responses," the report said.

And those export-led nations cannot continue to rely on demand from debtor countries, most notably, the United States, the IMF said.

In the short term, if the US trade deficit continues to widen from 2.4 percent of GDP last year -- exacerbated by fiscal stimulus and a stronger dollar -- it risks "intensifying the US administration's approach to reducing its deficit through trade measures," the report said.

"New trade barriers and possible retaliatory actions could derail global growth, with likely only limited impact on excess global imbalances."

The report noted that allowing increased immigration -- something Trump strongly opposes -- also could help the United States.

The IMF last week warned that the increasing trade restrictions were "the greatest near-term threat" to the world economy and said the US economy was "especially vulnerable" to the resulting damage.

The worst-case scenario, where all the tariffs threats and retaliation are implemented and economies suffered a shock to confidence, could cut a half percentage point or $430 billion off global GDP in 2020.