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Govt kotows to another IMF demand

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Govt kotows to another IMF demand

The government on Tuesday while bowing to another demand of the International Monetary Fund (IMF) has decided to increase sales tax.

In this regard, the Ministry of Finance officials have sent a draft Medium-Term Economic Framework (MEF) to the international lender. The IMF will respond to the Ministry of Finance again by tomorrow.

According to sources, the IMF will review the Memorandum of Economic and Financial Policies (MEFP) draft sent by the Ministry of Finance and send it back. The government has taken a principled decision to increase the sales tax in various categories to appease the IMF.

The finance ministry said that there is a strong possibility that important progress will be made by the IMF during this week, and the government will soon decide on bringing an ordinance for the Rs170 billion mini-budget.

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The federal cabinet will also deliberate on the nature of the mini-budget and the ordinance.

Earlier today, Pakistan and the International Monetary Fund (IMF) have resumed their talks over release of ninth tranche of the Extended Fund Facility (EFF). The federal government hopes that these virtual discussions will lead to a deal that eases up ever-increasing pressure on the country’s ailing economy.

Finance Secretary Hamed Yaqoob Sheikh said the “duration (of the talks) cannot be confirmed but we intend to wrap these up at the soonest”. Islamabad held 10 days of intensive talks with an IMF delegation – from Jan 31 to Feb 9 – but could not reach a deal.

The IMF, however, said in an earlier statement that both sides had agreed to stay engaged and “virtual discussions will continue in the coming days to finalise the implementation details” of the policies discussed in Islamabad.

Talks between the International Monetary Fund and Pakistan were to be resumed virtually as the two sides look to reach a deal to unlock funding critical to keep the cash-strapped south Asian country afloat.

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A Pakistani official told the internarional wire service on Monday that the two sides could not reach a deal last week and a visiting IMF delegation departed Islamabad after 10 days of talks, but said negotiations would continue. Pakistan is in dire need of funds as it battles a wrenching economic crisis.

“Duration (of the talks) cannot be confirmed but we intend to wrap these up at the soonest,” Finance Secretary Hamed Yaqoob Sheikh told Reuters in a text message, confirming that talks were resuming on Monday.

Talks centre around reaching an agreement on a reforms agenda under the country’s $6.5 bailout programme, which it entered in 2019.

An agreement on the ninth review of the programme would release over $1.1 billion.

Cash-strapped Pakistan, plans to implement new taxes worth 170 billion rupees this month to secure a large bailout which will further escalate the already spiraling inflation in the country.

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The IMF has postponed the release of $1.1 billion of a $6 billion deal, agreed upon in 2019, due to Pakistan’s failure to meet the conditions.

After concluding the most recent round of talks, the IMF suggested several measures, including the imposition of new taxes.

Although Pakistan received pledges of more than $9 billion from international institutions to help with flood recovery, the funds will only be given for specific projects and not as cash.

Finance Minister Ishaq Dar is preparing to introduce new taxes and reduce subsidies on electricity and gas to fulfill the terms of the agreement.

Pakistan’s inflation rate is likely to jump from 26% to 40% after the new taxes are imposed, but further delay in securing the IMF bailout would make life even more challenging for the common people.

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UK job vacancies fall 15pc year-on-year in January

UK job vacancies fall 15pc year-on-year in January

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UK job vacancies fall 15pc year-on-year in January

British employers advertised the fewest jobs in nearly three years last month, with numbers down 15 per cent from a year ago, figures from recruitment data company Adzuna showed on Monday, adding to signs that the labour market is cooling.

Last week Bank of England Governor Andrew Bailey welcomed what he described as “full employment” – with the official UK jobless rate at 3.8 per cent – despite the economy entering a shallow recession in the second half of last year.

However, the central bank wants to see wage growth slow from rates of more than 6pc in order to put downward pressure on inflation, which remains double its target.

Falling job vacancies offer a potential sign that employers are finding it easier to recruit than in the immediate aftermath of the COVID-19 pandemic, when the number of vacancies peaked at more than 1.3 million.

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Adzuna said 867,436 jobs were advertised in Britain in January, based on its analysis of more than 1,000 online sources. This was the lowest number since April 2021 and down from more than 1 million a year earlier.

“January 2024 has proven to be one of the most difficult starts to the year for job hunters in recent years with companies continuing to put hiring plans on ice,” Adzuna co-founder Andrew Hunter said.

The number of job seekers per advertised vacancy rose to 1.81 from 1.48 a year earlier.

However, Hunter said, preliminary data for February suggested the number of vacancies was stabilising.

Previous vacancy data from the Office for National Statistics showed an 18pc annual fall in job vacancies for the three months to the end of January.

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Adzuna said the average starting salary – which employers only published for just under half of positions advertised – was 38,168 pounds ($48,450), 3.0pc more than a year earlier. 

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WTO ministers gather in UAE for talks amid geopolitical tensions

WTO ministers gather in UAE for talks amid geopolitical tensions

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WTO ministers gather in UAE for talks amid geopolitical tensions

 The world’s trade ministers gathered in the UAE on Monday for a high-level WTO meeting with no clear prospects for breakthroughs, amid geopolitical tensions and disagreements.

The World Trade Organisation’s 13th ministerial conference (MC13), scheduled to run until Thursday in Abu Dhabi, the capital of the United Arab Emirates, is the first in two years.

The WTO is hoping for progress, particularly on fishing, agriculture and electronic commerce.

But big deals are unlikely as the body’s rules require full consensus among all 164 member states — a tall order in the current climate.

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“I don’t have hopes that a very substantive agreement will be announced,” said Marcelo Olarreaga, Professor of Economics at the University of Geneva.

“My impression is that the negotiators are dealing with tactical positions – how to make it look like it is the other (side) who is blocking negotiations,” he told AFP.

Even WTO Director-General Ngozi Okonjo-Iweala has said she expects the meeting to be challenging due to the “economic and political headwinds” – from the war in Ukraine, attacks in the Red Sea, inflation, rising food prices and economic difficulties in Europe and China.

Her team is working around the clock to draft agreements for the talks, she told journalists this month, noting that “negotiating positions are still quite tough”, notably on agriculture.

‘Miracle’

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During the WTO’s last ministerial meeting, held at its Geneva headquarters in June 2022, trade ministers nailed down a historic deal banning fisheries subsidies harmful to marine life and agreed to a temporary patent waiver for Covid-19 vaccines.

They also committed themselves to re-establishing a dispute settlement system which Washington had brought to a grinding halt in 2019 after years of blocking the appointment of new judges to the WTO’s appeals court.

“Replicating the success, the miracle, of MC12 in 2022 will be extremely challenging,” European Trade Commissioner Valdis Dombrovskis said this month.

“Negotiations on the big-ticket items” – such as fisheries, agriculture and the e-commerce moratorium – will “remain open until the final phase of the conference”, he added.

“Negotiations on dispute settlement reform and potentially some parts of the outcome document will also be challenging.”

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However, the WTO faces pressure to eke out progress on reform in Abu Dhabi ahead of the possible re-election of Donald Trump as US president.

During his four years in office from 2017 to 2021, Trump threatened to pull the United States out of the trade body and disrupted its ability to settle disputes.

“There will be the US elections in November…so this is the last chance,” a diplomatic source in Geneva told AFP on condition of anonymity.

“Postponing anything until after MC13 is not a good strategy.”

Earlier this month, US Trade Representative Katherine Tai underlined Washington’s “commitment to reforming the WTO and creating a more durable multilateral trading system”.

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But Olarreaga of the University of Geneva said the other members of the WTO “cannot expect huge concessions” from the administration of US President Joe Biden in an election year.

‘Fragmentation’

While there is doubt over progress at the WTO on major issues such as agriculture, there is hope for small advances on other fronts, particularly aid for developing countries.

On Monday, two new countries, the Comoros and East Timor, are expected to be accepted as WTO members.

More than 120 countries and regions, including China and the European Union, but not the United States, issued a ministerial declaration early Monday, marking the finalisation of an agreement aimed at facilitating international investments in development.

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They also issued a submission requesting the official integration of the deal into the WTO, but some diplomats fear opposition from India, which rejects any agreement that does not include all member states.

But amid the difficulty of obtaining full consensus, more and more plurilateral agreements — deals with a narrower number of signatories — are being reached, applying only to the participating countries.

Adding to the challenges for those gathering in the UAE, is the ongoing war in Gaza and related attacks by Yemeni rebels on ships in the Red Sea, a campaign that has disrupted global maritime trade.

“The current situation is characterised by geopolitical tensions,” said a European diplomat who spoke to AFP on the condition of anonymity.

“High expectations from developing nations following the financial crisis and the Covid-19 pandemic, as well as economic tensions due to inflation… (add to the) risk of fragmentation of the global economy,” the diplomat said. 

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Gas in oil-rich Saudi Arabia: Another 15tr cubic feet of reserves proven at Jafurah field

Gas in oil-rich Saudi Arabia: Another 15tr cubic feet of reserves proven at Jafurah field

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Gas in oil-rich Saudi Arabia: Another 15tr cubic feet of reserves proven at Jafurah field

An additional 15 trillion standard cubic feet of gas have been proven at Saudi state oil company Aramco’s Jafurah gas field, Energy Minister Prince Abdulaziz bin Salman said on Sunday.

Reserves at Jafurah have reached 229 trillion cubic feet of gas and 75 billion barrels of condensates, Prince Abdulaziz said in a statement on state news agency SPA.

Saudi Arabia is working on developing its unconventional gas reserves, which require advanced extraction methods such as those used in the shale gas industry.

Jafurah is the kingdom’s largest unconventional non-oil associated gas field and it is potentially the biggest shale gas development outside of the United States.

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In 2020, the Jafurah field was estimated to require investments of $110 billion.

Saudi Aramco expects output to reach 420 million cubic feet per day of ethane by 2030, it said on its website. The Jafurah field would produce some 630,000 barrels per day of gas liquids and condensates by 2030, it said.

The news comes as Qatar announced further raising gas production despite a steep drop in global gas prices, pushing ahead with plans to extract more of the resource amidst fierce competition with rivals such as the United States.

Read more: Qatar gas production increase is coming amid collapsing LNG prices

QatarEnergy chief Saad al-Kaabi shared the details of a new expansion of its liquefied natural gas production that will add a further 16 million tonnes per annum (mtpa) to existing expansion plans, bringing total capacity to 142 mtpa.

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The Qatari announcement comes as US gas prices trade near an all-time low if adjusted to inflation after a decade of meteoric rises in output which made the US one of the top oil and gas exporters.

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