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Economic Times
8 hours ago
- Business
- Economic Times
Wall Street choppy, oil dips as US holds back from Mideast military action
Live Events FED SPLIT (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Major Wall Street indexes closed lower on Friday while oil prices fell after U.S. President Donald Trump held back from immediate military action in the Israel-Iran eyes remained trained on the Middle East one week after an initial Israeli assault drew Iranian retaliation. The U.S. imposed Iran-related sanctions a day after Trump said he might take two weeks to decide on further to preliminary data, the S&P 500 lost 0.21%, while the Nasdaq Composite shed 0.49%. The Dow Jones Industrial Average, however, rose 38.47 points, or 0.09%, to 42, had been broadly positive at the open, and dipped in and out of negative territory during the benchmark Brent crude futures fell 2.3% to settle at $77.01 a barrel, but gained 3.6% in the week. Front-month U.S. crude - which did not settle on Thursday due to a U.S. holiday and expires on Friday - ended down 0.28% at $74.93, with a weekly gain of 2.7%."Investors are a little bit nervous about buying stocks right in front of this situation and, more specifically, right in front of this weekend," said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New new sanctions target entities, individuals and vessels providing Iran with defence machinery, and were seen as a sign of a diplomatic approach from the Trump administration."However, while Israel and Iran carry on pounding away at each other, there can always be an unintended action that escalates the conflict and touches upon oil infrastructure," PVM analyst John Evans foreign ministers urged Iran to engage with the U.S. over its nuclear programme after high-level talks in Geneva about a potential new nuclear deal ended with little sign of main bourses had ended their session a touch higher, following similar gains across Asia. MSCI's gauge of stocks across the globe fell 0.01% on the on Hong Kong's Hang Seng, and South Korea's Kospi linked to newly elected President Lee Jae Myung's stimulus, had boosted Asian shares during that Reserve policymakers made their first public comments since Chair Jerome Powell said on Wednesday that borrowing costs were likely to fall this year, but that he expects "meaningful" inflation ahead as Trump's tariffs raise prices for close split between governors on how to manage the risks was in full view as Governor Christopher Waller said the central bank should consider cutting as soon as the next meeting, while the Richmond Fed's Tom Barkin said there was no urgency to had also cautioned on Wednesday against holding on too strongly to the yields fell after Waller's comments, and as concerns about the Middle East conflict supported demand for safe haven yield on benchmark 10-year notes fell 2 basis points to 4.375%, from 4.395% late on rose for the U.S. dollar, pushing the greenback to a three-week high against the dollar rose 0.03% against a basket of currencies including the yen and the euro, with the euro up 0.3% at $1.1528. The index is poised to rise 0.6% this for gold, another traditional refuge, fell 0.13% to $3,365.91 and were poised for a weekly loss.
Business Recorder
2 days ago
- Health
- Business Recorder
Health system suffers as cigarette tax left untouched
The federal budget for 2025-26, announced amidst a backdrop of fragile economic recovery, signals a continuation of fiscal restraint. While the government has rightly focused on maintaining macroeconomic stability and ensuring essential current expenditures, the significant reduction in the health sector's development allocation raises serious concerns about the country's long-term human development and economic resilience. According to the budget documents released by the Ministry of Finance, the Public Sector Development Programme (PSDP) allocation for health has been reduced by 16 percent, from approximately Rs 54.7 billion in the previous year to Rs 46.1 billion in the current fiscal cycle. This is not just a numerical adjustment; it has real and immediate implications. Development allocations typically fund the expansion of healthcare infrastructure, procurement of new equipment, training programmes, and the rollout of disease prevention and surveillance systems. A cut of this magnitude effectively means that many of these critical initiatives will be scaled back or shelved. From an economic standpoint, this trend is deeply concerning, because health is not just a social good, it is a foundational pillar of economic productivity. A healthy population is more capable, more employable, and less financially burdened. Countries that underinvest in health eventually pay the price in terms of lost productivity, increased poverty, and heightened vulnerability to public health emergencies. In Pakistan's case, where over 50% of health expenditure is still borne out-of-pocket by households, reducing development spending can further widen inequalities and push more families into financial hardship due to medical costs. What makes this budget decision even more concerning is that it comes at a time when Pakistan faces a dual disease burden: persistent infectious diseases on one hand, and rapidly increasing non-communicable diseases such as diabetes, cardiovascular conditions, and mental health disorders on the other. Development funding is crucial to building the institutional capacity needed to tackle this complex mix of health challenges, especially in under-served rural and peri-urban areas. The budget also misses an important opportunity to introduce health-related fiscal reforms. Despite strong evidence linking ultra-processed foods and sugary drinks to growing rates of non-communicable diseases, the government has chosen not to impose any new taxes on these items. This is a missed opportunity to both generate additional revenue and steer consumer behaviour toward healthier choices. Globally, such taxes have proven effective in improving public health outcomes while creating fiscal space for investment in health systems. Additionally, the budget maintains the existing two-tier Federal Excise Duty (FED) structure on cigarettes, with no increase in tax rates. The upper-tier remains at Rs 16,500 per 1,000 sticks, and the lower-tier continues near Rs 12,500 per 1,000 sticks. This effectively keeps cigarette prices static in real terms, despite inflation and rising disposable incomes. From a public health standpoint, this decision represents a clear deviation from evidence-based fiscal strategy. Maintaining cigarette excise rates at current levels ignores a growing body of economic and health research suggesting that increasing tobacco taxes not only reduces consumption but also substantially increases government revenue. For example, a targeted increase of Rs 39 per pack, raising the average rate to around Rs 140 for economy brands and Rs 369 for premium brands, could reduce cigarette consumption by nearly 7 percent and bring in an estimated Rs 67 billion in additional revenue. This revenue could be directly reinvested in health services, disease prevention programs, and infrastructure. The government's decision to hold back on increasing cigarette taxes, despite the health risks and economic opportunity, reflects a worrying pattern of inaction. It suggests that political considerations or lobbying pressures may have outweighed long-term fiscal and health imperatives. In a country where tobacco consumption contributes to over 160,000 deaths annually and disproportionately affects the poor, failing to revise cigarette taxes is a missed chance to use fiscal tools to improve both public health and equity. Similarly, the absence of new taxes on sugary beverages and processed foods, despite their well-documented contribution to Pakistan's growing non-communicable disease crisis, reinforces the perception that the government has shied away from confronting powerful industry interests. This reluctance undermines broader efforts to promote preventive health and reduce long-term medical costs, which are increasingly borne by low- and middle-income households. From a macroeconomic perspective, the budget's overall trajectory leans toward short-term fiscal stability but lacks the bold, forward-looking investments needed to address structural vulnerabilities. While allocations for debt servicing and defense remain protected, social sector development, particularly in health, continues to be deprioritized. This imbalance suggests a recurring policy bias that views health as a discretionary expense rather than a strategic investment. In times of economic constraint, governments face difficult choices. However, smart fiscal policy does not mean cutting essential development expenditures, it means spending more wisely and protecting sectors that yield long-term returns. Health is one such sector. Delayed infrastructure, inadequate surveillance systems, and a weakened public health response capability may not show immediate consequences in budget sheets, but they will manifest in slower human capital development and greater costs down the line. Conclusively, while the Budget 2025-26 reflects a certain degree of fiscal discipline, the decision to reduce health sector development spending and to leave cigarette taxation untouched is both short-sighted and economically risky. Pakistan cannot afford to treat health as a secondary priority. A more strategic and balanced approach is needed, one that protects and promotes public health as a critical enabler of sustained economic growth and national resilience. Copyright Business Recorder, 2025
Business Recorder
2 days ago
- Business
- Business Recorder
Sales Tax cut on solar panels import: Rs20bn revenue hit expected
ISLAMABAD: The government is all set to abolish sales tax on the import of solar panels having revenue impact of Rs 20 billion in 2025-26. Another proposal is to reduce proposed sales tax from 18 percent to 10 percent on the import of solar panels. There is a strong likelihood of total abolition of the proposed 18 percent sales tax on solar panels. The Federal Board of Revenue (FBR) is finalizing alternate revenue measures of the same amount to be presented before the Prime Minister for approval. The FBR may propose increase in Federal Excise Duty (FED) on the imported vehicles or review lower rates of sales tax on some items in the Eight Schedule (Conditional Exemption) or Sixth Schedule (Exemption Schedule) of the Sales Tax Act. Copyright Business Recorder, 2025
Express Tribune
3 days ago
- Business
- Express Tribune
Juice industry seeks tax reduction
The Fruit Juice Council — a body representing the formal juice industry – has demanded the government to reduce the FED rate on the juice industry to 15%. The current 20% FED (on top of existing 18% GST) has stalled the juice industry's growth and in FY2024-25 the government's revenue projections fell short of its own expectations. This indicates that the juice industry has hit the Laffer Curve (where the taxation is so high that it results in sharp decline of sales, ultimately affecting government revenue). In line with local regulations, fruit drinks have minimum 5% fruit content, nectars have 25%- 50% fruit content and pure juices have 100% fruit content.
Business Recorder
3 days ago
- Business
- Business Recorder
Presentations to NA, Senate panels: Juice industry urges govt to lower FED to 15pc
ISLAMABAD: The Fruit Juice Council (formally juice industry) Tuesday urged upon two parliamentary panels to reduce 20 percent Federal Excise Duty (FED) to 15 percent on the juice industry to generate higher revenues during 2025-26. According to two different presentations given to National Assembly Standing Committee on Finance and Senate Standing Committee on Finance here on Tuesday at Parliament House, the budget proposes that the reduction in price on account of chilling charges be lowered from 10% to no more than 5% of the price. This will increase the burden on the manufacturers even more. Instead of reducing the FED on fruit juices, the fruit juice and beverage industry has been burdened further. The FJC strongly urges the government to reverse this budget proposal. The Fruit Juice Council, a body representing the formal juice industry, believes that the government should reduce the FED rate of 20% imposed on the juice industry to 15%, if it wants a higher revenue than the outgoing financial year. The current 20% FED (on top of existing 18% GST) has stalled the juice industry's growth and in FY2024-25 the government's revenue projections fell short of its own expectations. This indicates that the juice industry has hit the Laffer Curve (where the taxation is so high that it results in sharp decline of sales, ultimately affecting government revenue). In line with local regulations, fruit drinks have minimum 5% fruit content, nectars have 25%-50% fruit content and pure juices have 100% fruit content. Fruit-based juices are a healthier option since they contain the goodness of fruits. Punjab and Sindh Food Authorities allow the sale of fruit-based juices in educational institutions while restricting sales of any other beverages. Copyright Business Recorder, 2025
