KARACHI: 2018 narrated the tale of a somewhat turbulent economy. The year started out with some hope but ended with uncertainty shrouding the entire scenario. An overall lack of positive news and incoherent economic policies gave rise to serious concerns. The Express Tribune takes a look at some of the developments, some good, most bad, that are worth looking at.
Chinese Yuan given go-ahead for bilateral trade
Accepting the Chinese request, the State Bank of Pakistan allowed both public and private sector enterprises to freely choose Chinese Yuan (CNY) for bilateral trade and investment activities. This could lessen Pakistan’s dependence on the US dollar and create more options for the country through diversification of foreign reserves.
Pakistan’s ranking improved
Amid a lot of grim news, there was some hope as Pakistan jumped up 11 notches on the Word Bank’s Ease of Doing Business Index and clinched 136th position – for the first time in 15 years
Halfway through attaining 5G
With the number of users increasing every day, Gilgit-Baltistan (G-B) started enjoying 3G/4G services this year, whereas, Telenor Pakistan launched cutting-edge 4.5G in Karachi, Lahore, Rawalpindi and Islamabad. Considering the potential and in a bid to empower Pakistan through high speed data network, Minister for Information Technology and Telecommunication also hinted at introducing 5G telecom services in 2019.
Pakistan placed on grey list
The Financial Action Task Force (FATF) formally placed Pakistan on the grey list due to ‘strategic deficiencies’ in its anti-money laundering and terrorism financing regime. In order to comply with FATF’s recommendations, SECP later in June issued Anti-Money Laundering and Counter Financing of Terrorism Regulations 2018.
Cyberattacks on sensitive information
It started with BankIslami losing Rs2.6m in cyberattack and ended with many banks suspending international transactions in the wake of cyberattack. As online security measures failed to prevent breach of system, SBP directed banks and financial institutions to protect the data of accountholders and apply necessary controls. The central bank also decided to conduct biometric verification of accountholders to identify fake accounts. Apart from the banking sector, Careem also admitted to mass data leak, compromising personal information of users
New York bade farewell to UBL
United Bank Limited, one of the top five banks in Pakistan, announced to voluntarily close down its New York branch as it has been commercially unviable to operate in provided circumstances. The wind-up may impact the inflow of worker remittances into the country.
Moody’s, Fitch downgraded Pakistan
Moody’s downgraded the country’s rating from stable to negative. Later, Fitch Ratings also downgraded Pakistan’s long-term foreign currency IDR to ‘B-‘ from ‘B’. The announcements come at a time when Pakistan’s economy is facing critical financing issues
Boosting forex reserves
In a bid to boost its fast-depleting reserves, the government is set to launch dollar-based savings certificates for the first time for overseas Pakistanis
Wage-boosting measures adopted for salaries class
Offering a boon to the salaried class, former prime minister Shahid Khaqan Abbasi announced to increase the income tax exemption threshold by threefold to Rs1.2 million and cut the maximum individual income tax rates by 57%. The government also completely exempted the salaried class from tax audit.
Cryptocurrencies over before it could start
With many tempted to open accounts seeing Bitcoin’s phenomenal rise in value the previous year, the State Bank of Pakistan banned cryptocurrencies in the country, where the volume of trading remained on the lower side anyway.
Taxing tech giants
In an apparent attempt to benefit from the digital revolution, the FBR allowed taxing tech giants, including Google, Amazon and Facebook, and collecting its due share of taxes from the profits of multinational companies and those owned by Pakistani overseas.
China’s Alibaba group acquired Daraz
Our go to online store Daraz changed its leadership. Alibaba Group bought the entire share capital of Rocket Internet’s Daraz Group.