Economy

ISLAMABAD (Reuters) – Pakistan discussed its $7 billion bailout reform agenda with the International Monetary Fund during an unscheduled staff visit last week, Finance Minister Muhammad Aurangzeb said on Sunday, suggesting no new taxes are to be imposed. The talks in Islamabad came within six weeks of the IMF approving the bailout, an unusual move as it is rare for the fund to discuss reforms ahead of a review of the reform plan under the loan programme. A first review of Pakistan’s reforms is due in the first quarter of 2025.”We discussed reforms in taxation, energy sector, privatisation of loss-making state-owned enterprises (SOEs) and public finance,” Aurangzeb said in a recorded video statement broadcast by state-run television.After wrapping up the visit, the IMF had said it was encouraged by Islamabad’s reaffirmed commitment to the economic reforms under the Extended Fund Facility its board had approved in September to reduce vulnerabilities.The mission did not state the weaknesses, but sources in Pakistan’s finance ministry have said some major lapses prompted the IMF’s visit. Among these were a shortfall of nearly 190 billion rupees ($685 million) in revenue collection during the first quarter of the current fiscal year, the sources said.The period also saw an external financing gap of $2.5 billion, while Pakistan failed in the bid to sell its national airline.It had prompted fears that Pakistan might need to impose new taxes to bridge the shortfall.But Aurangzeb said the shortfall will be met only with enforcement to get people to pay their taxes, implying there would not be any new revenue measures.”We are going to be very firm on compliance and enforcement,” he said, adding that al the sectors will have to play their role in contributing towards the country’s economy. The IMF said both sides agreed on the need to continue prudent fiscal and monetary policies, and to mobilise revenue from untapped tax bases. Pakistan’s $350 billion economy has struggled for decades with boom-and-bust cycles, needing 23 IMF bailouts since 1958. More

(Reuters) – Most Gulf stock markets fell on Sunday after U.S economic data and comments from Federal Reserve officials pointed to a slower pace of interest-rate cuts.Investors increased bets on the Fed leaving interest rates unchanged at its December meeting and dialled back expectations for easing in 2025.The Fed’s decisions have a significant impact on monetary policy in the Gulf as most of the region’s currencies are pegged to the U.S. dollar.The Qatari benchmark index slipped 0.4%, with almost all of its constituents falling, led by the finance, communication and energy sectors.Qatar National Bank, the region’s largest lender, lost 1.4% and Qatar Navigation was down 1.1%.Saudi Arabia’s benchmark index snapped three sessions of losses, edging up 0.2% helped by gains in the IT, utilities, real estate, industry, healthcare and insurance sectors. Medgulf (TADAWUL:8030) rose 10% for its biggest daily gain in more than six months. The insurer said in a statement to the Saudi Exchange that it had received a circular from the Insurance Authority on a new mechanism for allocating reinsurance premiums to the local market.All bar two insurance stocks closed higher with Al Rajhi Company For Cooperative Insurance up 3.9%, and Saudi Reinsurance gaining 6.9%.Saudi Re said in a statement that the new mechanism would help increase Saudi reinsurance revenue by more then 5% from 2023.Outside the Gulf, Egypt’s blue-chip index reversed the previous session’s gain with a 0.7% fall, with most sectors in the red. Telecom (BCBA:TECO2m) Egypt lost 2.6% after it reported a 13% decrease in quarterly net profit on Thursday. However, Juhayna Food gained 3.7% after it posted around a 200% jump in third quarter net profit. SAUDI ARABIA rose 0.2% to 11,812 KUWAIT was up 0.2% to 7,849 QATAR lost 0.4% to 10,411 EGYPT dropped 0.7% to 31,252 BAHRAIN ended flat to 2,053 OMAN was down 0.4% to 4,626 More

$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Donald Trump’s election as US president is already fraying international initiatives on climate change and taxation, as diplomats from the world’s richest nations struggle to maintain a shaky consensus on the eve of a G20 summit in Brazil.Argentina and its President Javier Milei, a close ally of Trump, threatened to block a joint communique set to be endorsed by G20 leaders at the Rio de Janeiro meeting that begins on Monday, because of objections related to taxation of the super-rich and gender equality, people briefed on the continuing negotiations told the Financial Times.Diplomats also worked through Saturday night in an attempt to find consensus on climate finance and geopolitical issues such as Russia’s war against Ukraine, the people said.Progress had been made on the main points in negotiations that went on until early on Sunday morning, according to a person briefed on the talks.The struggle to agree on how much developing nations should contribute to financial efforts to combat global warming mirrors negotiations at the COP29 climate summit taking place simultaneously in Baku.The threat of a Milei veto has heightened the concerns of many western diplomats who fear Trump’s election will embolden his conservative allies and spark an exodus of countries from ambitious agreements on issues such as global warming. Trump has vowed to pull the US out of the Paris climate accords.“[The Argentine government] wants to make the G20 in Brazil a test between old and new forces,” said one Brazilian official. “After a year of negotiations on taxation and consensus they are creating problems on things they accepted before, word by word.”US president-elect Donald Trump, left, greets Argentine leader Javier Milei in Florida More

$1 for 4 weeksThen $75 per month. Complete digital access to quality FT journalism. Cancel anytime during your trial.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

The report, based on internal deposit account data, finds that nearly half of gig workers earned income from these platforms for just one month over the last year, while 74% worked three months or fewer.Despite the flexibility and accessibility of gig jobs, these findings suggest that most individuals turn to gig work to supplement spending rather than as a consistent income source.Bank of America’s aggregated spending data further illustrates this trend. In September 2024, gig workers exhibited a 23% higher median discretionary spending than non-gig workers, while their necessity spending—covering rent, groceries, and other essentials—was only 5% higher.This discrepancy highlights that many gig workers use these roles to supplement their discretionary purchasing power, such as dining out, travel, and electronics, rather than relying on gig income for day-to-day expenses.The gig economy’s participation rate among Bank of America’s deposit customers has grown modestly, rising to 3.8% in September 2024 from 2.8% in September 2019. However, its overall scale remains small and stable.Within the gig categories, ridesharing and social commerce saw a year-over-year uptick.For social commerce, the annual increase “could be due in part to increased consumer demand for thrifted items bought via social commerce sites, which mirrors the broader trend of consumers trading down on goods in order to spend on experiences,” the report states.Meanwhile, food delivery participation has slightly declined, possibly reflecting consumer sensitivity to the rising costs associated with delivery services.The share of income from vacation rentals has been consistently minimal, “likely as rising real estate prices remain a high barrier of entry and international tourism remains strong,” BofA notes.Another key finding is that gig workers overwhelmingly stick to a single gig platform. Over 92% of gig workers earned income from just one platform in September 2024, a number that has remained stable despite minor increases in the share of workers participating in two or more gigs.“Overall, the stability in gig employment is likely a good thing for the labor market,” BofA concludes.“Although it’s not likely to be a major driver of full-time employment, it can be especially helpful for those looking to supplement their household’s spending or for people who need flexible work arrangements.” More

Viktor Orbán has turned Hungary into the main home for Chinese capital in Europe, capturing more than a quarter of all Chinese investment coming into the continent over the past two years. The outsized share, including a wave of investment into EV factories, has been a fillip to an otherwise struggling Hungarian economy hit by the EU withholding about €20bn of funding over rule of law concerns. Orbán’s challenge now is pulling off the diplomatic gymnastics required to simultaneously remain an ally to Xi Jinping and Donald Trump’s incoming administration of China hawks, while managing the threat of a chronic decline in EU funds.Even against the backdrop of his rule of law dispute with Brussels, Orbán has exacerbated tensions with other EU capitals by maintaining strong diplomatic ties with both Beijing and Moscow. Márton Nagy, economy minister and a former adviser to prime minister Orbán, told the Financial Times that China’s investments had helped maintain the country’s car industry as “a very strong core” of its economy, which is eventually expected to account for almost a third of GDP.Some content could not load. Check your internet connection or browser settings.China’s most important EV and battery groups — BYD and CATL — were among those scouring the EU for local manufacturing sites, even before Brussels put new tariffs on Chinese exports.BYD last year chose the southern Hungarian city of Szeged as the location for its first large factory in Europe. CATL is building a €7.3bn plant in the east of the country. While both Chinese companies are privately owned, they have close ties with Beijing and have been key beneficiaries of a supportive Chinese industrial policy for years. Hungary emerged as a perfect partner for the Chinese companies, with lower labour and land costs than other parts of Europe coupled with the backdrop of warm political ties between Beijing and Budapest. China upgraded Hungary to one of its closest international partners in May, with Xi pledging to invest in key infrastructure projects during a visit to Budapest. Nagy said both BYD and CATL would open their doors by the second half of next year, along with a string of other Chinese greenfield investments, with their impact on the economy and wages being “felt as soon as the work starts”. The paraphernalia across Nagy’s desk, including dragons and a name plate featuring Chinese script, were a sign of Budapest’s tireless efforts to court China. Economy minister Márton Nagy in his office: ‘Trump is a businessman, he will make deals’ More

$1 for 4 weeksThen $75 per month. Complete digital access to quality FT journalism. Cancel anytime during your trial.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More