Economy

The successful completion of these reviews is crucial as it will determine subsequent disbursements to Pakistan. The repayment schedule is set to commence after 3.25 years, carrying an interest rate of 4.198%. In order to meet fiscal targets such as the primary deficit, the government has taken steps to reduce its expenditures.Additionally, Akhtar provided insights into the operations of the State Bank of Pakistan (SBP) under the SBP Act of 1956. The central bank employs 1178 staff members under two distinct compensation schemes: One offering pension benefits known as OMS and the other including provident fund and gratuity contributions called NC&BS. For the fiscal year 2022-23, Rs 6,818 million has been budgeted for salaries and benefits for these employees.In an effort to enhance governmental efficiency, ministries have been directed to cut down on utility consumption. Moreover, audit teams have reported expenses amounting to Rs 46.419 million over the past three years while examining finances at foreign missions.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

NEW YORK (Reuters) -The dollar slipped against a basket of currencies on Friday on news of steady U.S. business activity in November, but private sector employment declined in line with expectations for a fourth-quarter economic slowdown.Currencies traded in a relatively narrow range with U.S. markets closing early the day after the U.S. Thanksgiving holiday.”It’s incredibly quiet, as you’d expect on the day after Thanksgiving, with liquidity still pretty thin, and volumes again on the light side,” said Michael Brown, market analyst at Trader X in London.”I think what we’re seeing is a classic case of the market taking the ‘path of least resistance.'”S&P Global said on Friday its flash U.S. Composite PMI Output Index was unchanged at 50.7 this month as a modest rise in services sector activity offset a contraction in manufacturing. A reading above 50 indicates expansion in the private sector.The lack of strong order growth resulted in businesses shedding workers, with the survey’s employment index dropping to 49.7 in the first contraction since June 2020 from 51.3 in October.An easing labor market will aid the Fed’s fight against inflation. “Economic data have been producing a fair amount of evidence of a cyclical downturn in the US,” Jane Foley, senior FX strategist at Rabobank said in a note. The dollar index, which measures the U.S. currency with six peers, eased 0.4% to 103.35, staying close to the 2-1/2 month low of 103.17 touched earlier this week. For the week, the index was down 0.5%, after slipping 1.9% last week.The index is on course for its weakest monthly performance in a year on growing expectations the Federal Reserve is done with raising interest rates and could start cutting them next year.Elsewhere, the Japanese yen was about flat against the dollar at 149.45, after strengthening on news that Japan’s core consumer price growth picked up slightly in October.The data reinforced investors’ views that stubborn inflation may push the BOJ to roll back monetary stimulus before long.ING economists said they expect the BOJ to move away from its super-accommodative stance next year.”We believe that the BOJ may scrap the yield curve programme as early as the first quarter of next (year), as Japanese government bonds appear to have stabilised,” they said.The bank will “then begin its first rate hike in Q2 2024 if wage growth continues to accelerate next year.”The nationwide core consumer price index (CPI), which excludes volatile fresh food costs, rose 2.9% year on year in October, government data showed on Friday, against 3.0% expected by economists in a Reuters poll.The euro was 0.39% higher at $1.0946 after data confirmed an initial estimate published in late October that showed Germany’s economy shrank slightly in the third quarter from the previous three months.German business morale improved for a third straight month in November, data showed. The single currency is pausing after gaining ground on Thursday on a series of preliminary surveys showing recession in Germany may be shallower than expected, which offset a downbeat reading on French business activity.Sterling rose 0.57% to its highest since early September after data on Thursday showed British companies returned to growth in November, fuelling hopes Britain will avoid a recession.In cryptocurrency markets, bitcoin rose 1.14% to $37,728, its highest since May 2022. A spate of filings for spot bitcoin and ether exchange-traded funds (ETFs), including from traditional finance heavyweights, has revived the crypto market which last year was crushed by a series of meltdowns. More

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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The man named to lead Argentina’s central bank by libertarian president-elect Javier Milei has turned down the job over policy differences, amid signs that the South American nation’s maverick next leader is backing away from his flagship policy of dollarising the sickly economy.Emilio Ocampo, an economic history professor and former investment banker, was the leading advocate within Milei’s team of dumping the Argentine peso in favour of the US dollar. The author of a recent paper advocating dollarisation, he had been working on a blueprint to implement the plan after the new government takes office on December 10.Milei, an admirer of former US president Donald Trump, had said during the election campaign that Ocampo would head the central bank with a mission to close it down, adding as recently as September that dollarising the economy and shutting the bank were “not negotiable”.But a person close to Ocampo confirmed on Thursday night local news reports that he would no longer accept the post.“The only reason for Ocampo to be at the [central bank] was to dollarise,” the person said. “He was never going to the central bank to implement someone else’s plan, which he doesn’t agree with.” Ocampo and Milei’s team declined to comment.Scrapping the peso, which Milei said in an October interview was worth “less than excrement”, and “blowing up” the central bank were central to the bold plan he pitched during his campaign as a way to revitalise Argentina’s economy, slash triple-digit annual inflation and repair the public finances.The TV economist has vowed to “take a chainsaw to the state” to balance the budget and has also promised widespread privatisation.But Milei said in an interview on Wednesday night that while he liked Ocampo’s plan, “we need to see whether the market situation allows a solution like the one Emilio proposes, and whether he is prepared to implement a plan which is not the one he had originally planned”.Milei’s office said on social media site X on Friday that the closure of the central bank was a “non-negotiable matter” despite “false rumours that have been spread”, without mentioning dollarisation.Milei has not yet confirmed an alternative pick for central bank chief but local media reports have said Demian Reidel, who served as a vice-president at the institution under then-president Mauricio Macri, is being considered.The key role of economy minister is another position not yet filled. When discussing possible appointments to the post in his Wednesday interview, Milei praised Luis Caputo, a former head of trading for Latin America at JPMorgan in the 1990s who later worked at Deutsche Bank.Caputo was finance minister from 2017 to 2018 under the centre-right administration of Macri, who used to describe him as a “Messi of finance”, in reference to Argentina’s star footballer.While at the ministry Caputo oversaw the issue of a 100-year sovereign bond at the peak of investor enthusiasm for Argentina, an instrument scrapped by the current Peronist government after it defaulted.He ran the central bank for a few months in 2018 before resigning amid differences with the IMF over the conditions it set for its record-breaking $57bn bailout of the country that year.Caputo is “a person who is able to do the job, without any doubt”, Milei said. “He has the necessary expertise to sort out the monetary problem and give it a financial market solution.”Milei stopped short of naming Caputo to the post and local news reports say the former minister has yet to make a final decision on whether to take the job.Local financial markets are showing increasing signs of stress as Milei works to finalise the key economy portfolios ahead of his inauguration on December 10.The central bank is struggling to find buyers for short-term peso-denominated debt that it issues to suck local currency out of the system, signalling that its efforts to contain inflation are flagging in the face of market uncertainty.The dollar was trading at about 1,020 pesos on the black market on Thursday, almost triple the officially fixed rate of 364 to the dollar.Milei’s biggest challenge is to dismantle an elaborate web of price and currency controls spun by the outgoing Peronist administration without triggering hyperinflation and economic collapse.Additional reporting by Ciara Nugent in Buenos Aires More

(Reuters) – An exchange-traded fund tracking artificial intelligence stocks saw investors pouring money after six straight weeks of outflows, on the backdrop of strong quarterly results by chipmaker Nvidia (NASDAQ:NVDA) and rising optimism that U.S. interest rates have peaked.The Global X Robotics & Artificial Intelligence ETF received $35.5 million in net inflows in the week ending on Wednesday, its strongest since June earlier this year, according to Lipper data.ETFs tracking AI stocks had a strong start to the year sparked by the viral success of ChatGPT, till the rally sputtered after June on fears that persistently high U.S. interest rates will hurt the valuations of technology companies.The growing prospect of a rapid flip to rate cuts by the Federal Reserve next year also has driven investors into beaten-down Treasuries, pushing Treasury yields down and boosting rate-sensitive technology and growth stocks. “Improved inflation data and the likelihood of rate cuts in the second half of 2024 have maintained market optimism throughout November, contributing to investor interest,” said Tejas Dessai, AVP, Research Analyst at Global X.”In general, Generative AI is rapidly transitioning from experimentation to adoption to monetization, and we are beginning to see tangible revenue and profit opportunities emerge.” So far this year, the Global X fund has gained 27.7% year-to-date, supported by the 233% rally in shares of its top holding Nvidia, whose graphics processing units (GPUs) dominate the market for AI.The chipmaker’s strong results on Tuesday have also been an important factor in driving sentiment around AI ETFs, said Aniket Ullal, head of ETF data and analytics at CFRA.Daily inflows into the fund were $17.2 million on Wednesday, hitting their highest level in more than two months after Nvidia forecast overall revenue above Wall Street targets as supply-chain issues ease.The Global X fund, which has total net assets of $2.2 billion, has seen net inflows of $554.8 million so far this year. More

Haddad told reporters the measures would be presented after government officials return from the COP28 climate summit in Dubai.”When Congress becomes aware of what we intend to do, I believe this situation will be resolved,” said the minister, without detailing any initiative.President Luiz Inacio Lula da Silva vetoed the bill on Thursday citing concerns that it entailed revenue loss without specifying compensatory measures. The project passed by Congress in October would extend the tax benefits until 2027.The move came as his administration tries to push through measures aimed at achieving an ambitious target of erasing the primary deficit by 2024, with some encountering resistance in Congress.The veto could yet be reversed by lawmakers if absolute majorities in both the lower house and Senate cast votes in favor of the bill’s reinstatement.The government had emphasized its commitment to help affected sectors after the approval of a consumption tax reform and a measure designed to generate 35 billion reais ($7 billion) in 2024 by preventing state tax discounts from reducing companies’ taxable income for federal revenue purposes, said Haddad.He reiterated the government’s goal of achieving fiscal balance and said this would be accomplished through tackling tax distortions.Haddad also attributed a fall in public revenue in the third quarter to the economic downturn spurred by high-interest rates. “High interest and high deficit need to be corrected in the shortest possible time,” he said. ($1 = 4.9059 reais) More

National Bank of Poland (NBP) Governor Adam Glapinski is one of several people linked to the ruling nationalist Law and Justice (PiS) party that a coalition of pro-European parties wants to bring before a state tribunal. The coalition looks set to oust PiS after winning a majority in an October election.”I will talk to representatives of large international financial institutions, the IMF, the ECB (European Central Bank), the World Bank, to draw their attention to the fact that what Donald Tusk is trying to do… is the greatest attack on the independence of the central bank,” Prime Minister Mateusz Morawiecki told a news conference.Glapinski, whose links to PiS leader leader Jaroslaw Kaczynski go back decades, is accused by the coalition led by former European Council President Donald Tusk of allowing the central bank’s decisions to be influenced by the government, damaging its fight against inflation. The governor was sharply criticised after a bigger-than-expected rate cut in September that critics said was politically motivated stunned markets and sent the zloty currency tumbling.Glapinski denies the allegations against him and has provided a robust and often lengthy defence of his record during monthly press conferences at which he has stressed that inflation in Poland has fallen sharply this year.Inflation was 6.6% in October, down from a peak of 18.4% in February.In response to Reuters’ questions about the possibility of bringing Glapinski before a state tribunal, an NBP spokesperson said this could violate European Union regulations.”Attempts to bring the governor of the NBP before a state tribunal can be directly interpreted as an attack on the independence of the central bank of one of the European Union countries, which is contrary to Art. 130 of the Treaty on the Functioning of the EU,” the spokesperson said in an email. More

In response to these challenges, the government has taken decisive action by lifting import bans that previously hindered multinational companies from repatriating profits. This move is part of a broader strategy to bolster business and investor confidence within the nation. Moreover, the authorities are targeting loss-making state-owned enterprises (SOEs) for privatization and are restructuring domestic debt towards longer-term instruments, which is expected to reduce borrowing costs.These efforts come in the wake of predictions that climate change will significantly impact Pakistan, with models forecasting substantial temperature increases affecting weather patterns. Despite these environmental concerns, the World Bank has offered an optimistic outlook for Pakistan’s economy. With sustained macroeconomic stability through ongoing reforms, there is potential for the economy to grow to $2 trillion by 2047.Currently, business and investor sentiment is on the upswing, with an anticipated GDP growth rate of up to three percent this fiscal year. This resurgence is timely as Pakistan negotiates for a $710 million second tranche from the IMF loan package. The recent developments are pivotal in steering Pakistan out of its exclusion from global credit markets and setting it on a path toward long-term economic resilience.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More