Latest news with #macroeconomicstability
Arab News
10-06-2025
- Business
- Arab News
Pakistan set to unveil IMF-backed budget today, aimed at balancing growth and stability
KARACHI: Pakistan's Finance Minister Muhammad Aurangzeb is set to unveil an International Monetary Fund-backed federal budget for the 2025-26 fiscal year in parliament today, with economists describing it as a delicate balancing act aimed at preserving macroeconomic stability while reigniting growth. The budget comes a day after the release of the Economic Survey of Pakistan, which showed that the country missed its annual growth target, expanding by 2.7 percent against a goal of 3.7 percent. Economists say the government is now walking a 'tightrope' as it prepares its fiscal roadmap for the coming year. 'The upcoming budget is expected to be fiscally disciplined, aiming to strike a delicate balance between economic stability and inclusive growth,' said Sana Tawfik, head of research at Karachi-based brokerage Arif Habib Limited. Pakistan's agriculture sector was a major drag on overall performance in the outgoing fiscal year, growing just 0.56 percent, while the industrial sector, especially large-scale manufacturing, also lagged. The services sector fared slightly better with an estimated 2.9 percent growth. For the upcoming year, the government is targeting 4.2 percent GDP growth, according to Planning Minister Ahsan Iqbal. In the new budget, businesses across sectors, including textiles, real estate, capital markets alongside foreign investors, are hoping for rationalization of key taxes such as the sales tax, capital gains tax, super tax and the levy on salaried income. The government, however, is expected to stay the course on reforms mandated by the International Monetary Fund (IMF), which have helped stabilize the economy after years of high debt and dollar shortages. 'With IMF engagement in focus, the government is likely to prioritize fiscal consolidation, emphasizing revenue enhancement through broadening the tax base,' Tawfik said. The IMF has pressed Pakistan to bring more sectors into the tax net, particularly agriculture, real estate and retail. Prime Minister Shahbaz Sharif's administration has already withdrawn subsidies and raised electricity tariffs in recent years to boost revenue, key conditions under the IMF program. 'While development spending may remain contained due to limited fiscal space, the overall direction appears to favor continuity of reform,' Tawfik said. Mushtaq Khan, former chief economist at Bank Alfalah Limited, said the government is expected to wage a 'war on cash' in the coming fiscal year by promoting a cashless economy. He added the Sharif administration now appears more 'confident' as his coalition government has seemingly gained political strength in the wake of the recent military standoff with India.
Zawya
09-06-2025
- Business
- Zawya
Nigeria's economic turnaround: Reforms fuel growth and investor confidence
Two years after Nigeria's economic reforms have gained traction with macroeconomic stability returning, foreign capital flowing in, and the economy on a steady trajectory to full recovery, the nation has achieved progress many thought was impossible, and more can be accomplished if the momentum is maintained, writes JOSEPH INOKOTONG. TWO years into President Bola Ahmed Tinubu's administration, Nigeria's economy, long mired in oil dependency, structural distortions, and governance challenges, is showing signs of a turnaround. Despite ongoing hardship for many Nigerians, experts and multilateral institutions agreed that macroeconomic fundamentals are stabilizing, reforms are gaining traction, and investor confidence is rising. Turning the tide with reforms Tinubu's tenure began with a bold move, the removal of the long-standing fuel subsidy, which had drained public finances. He also put an end to the Central Bank of Nigeria's (CBN) unsustainable financing of fiscal deficits, reined in monetary excesses, and unified the exchange rate. These reforms, though painful, have begun to yield results. Nigeria's economy is projected by the World Bank to grow by 3.7 per cent in 2024—its strongest performance since 2014 (excluding the post-COVID rebound). Crude oil production has risen from a low of 1 million barrels per day (bpd) to 1.5 million bpd, and the naira, though volatile, has stabilized as the gap between official and black-market rates narrowed significantly. Foreign portfolio investments surged to $3.48 billion in the first half of 2024, compared to $756.1 million in the same period of 2023. Analysts attribute this uptick to the CBN's enhanced policy transparency, reduced forex market intervention, and successful clearing of a $7 billion FX backlog. Positive global ratings and Eurobond market re-entry Fitch Ratings upgraded Nigeria's outlook to 'Positive,' citing improved fiscal discipline, a reduction in fuel subsidies, and higher oil output. Moody's followed suit, lifting Nigeria's sovereign credit rating from 'Caa1' to 'B3,' based on stronger external and fiscal positions. These upgrades reflect growing optimism that recent policy changes are sustainable. This renewed credibility allowed Nigeria to return to the international Eurobond market in late 2024, raising $2.2 billion despite subscription offers exceeding $9 billion. It marked Nigeria's re-emergence after a two-year hiatus and signals strong global investor appetite. Managing exchange rate volatility A cornerstone of Nigeria's stabilization plan has been unifying its multiple exchange rates. By adopting a market-driven naira valuation, speculative arbitrage has drastically reduced. According to Ifeanyi Ubah of Commercio Partners, though the naira depreciated from ₦1,475/$ in January 2025 to ₦1,598/$ by May, the fluctuation has been more orderly and transparent, signaling increased market confidence. The country's external reserves, despite early 2025 drawdowns, began to rebound by late April, reaching $38.9 billion by mid-May—enough to cover 7.6 months of imports. This underscores the CBN's strategic efforts to rebuild buffers amid external shocks. Oil price decline: A looming risk While oil production has improved, declining global prices pose new challenges. OPEC+ countries recently agreed to ramp up production, pushing Brent crude closer to $60 per barrel. Some projections suggest a potential drop below $50 per barrel by year-end—a troubling scenario for an economy still reliant on oil. At current prices and 1.5 mbpd output, Nigeria's fiscal revenue could fall 10% below its breakeven level. Yet, the CBN is responding proactively by enhancing non-oil exports, supporting backward integration to reduce import dependency, and simplifying diaspora remittance processes. The apex bank is also encouraging sectors like agriculture, manufacturing, and creative industries to adopt export-led strategies. Nigeria's creative economy alone has the potential to generate $25 billion annually, offering a critical FX diversification pathway. Capital market surge and Sukuk success Investor confidence is also evident in the capital markets. In 2024, Nigerian listed firms declared ₦1.1 trillion in dividends, with ₦1 trillion already paid. The Securities and Exchange Commission (SEC) reported ₦3.68 trillion in new issues for the year, ₦3.62 trillion in equities, and ₦59.82 billion in fixed income. The Debt Management Office's Series VII Sovereign Sukuk, aimed at financing infrastructure, was another highlight. It attracted ₦2.205 trillion in subscriptions, 735% over the ₦300 billion offer. These funds will be used to build roads and bridges across all six geopolitical zones and the FCT, aligning with Tinubu's infrastructure-focused Renewed Hope Agenda. Meanwhile, mergers, acquisitions, and corporate restructurings continued at a rapid pace. In 2024, the SEC approved 11 M&A deals worth ₦320.36 billion. Major transactions included N Seven's ₦103.7 billion acquisition of a controlling stake in Guinness Nigeria Plc. Inflation slows, fiscal metrics improve Inflation, though still elevated, is beginning to ease. The National Bureau of Statistics (NBS) reported a drop in headline inflation to 23.71% in April 2025 from 24.23% in March. Food inflation also declined slightly on a month-on-month basis. The Central Bank's tighter monetary stance is credited with reducing inflationary expectations. The fiscal position is also improving. The World Bank's latest Nigeria Development Update notes that the consolidated fiscal deficit fell from 5.4% of GDP in 2023 to 3.0% in 2024. Federation revenue surged from ₦16.8 trillion to ₦31.9 trillion, equivalent to 11.5% of GDP. Moody's expects Nigeria's debt-to-GDP ratio to stabilize at around 50%, with interest payments consuming about 35% of revenue—a manageable, albeit high, burden. Forward outlook: Stability with inclusive growth Although the reforms have yet to alleviate hardship for many citizens, analysts agree that they are laying the foundation for long-term recovery. The World Bank warns that maintaining momentum is crucial and calls for deeper reforms to generate jobs, reduce poverty, and ensure inclusive growth. 'Nigeria has made impressive strides to restore macroeconomic stability,' said Taimur Samad, Acting World Bank Country Director for Nigeria. 'The challenge now is to shift public resources away from unsustainable patterns and towards investing in human capital, infrastructure, and social protection.' Nigeria's economy is far from fully recovered, but the signs are encouraging. With macroeconomic stability returning, foreign capital flowing in, and global institutions offering cautious optimism, the Tinubu administration has achieved progress many thought unlikely. If reforms are deepened and sustained, Nigeria may well be on a path to lasting growth and prosperity.
Zawya
04-06-2025
- Business
- Zawya
Egypt details economic strategy, private sector empowerment to Goldman Sachs
Egypt's Minister of Planning, Economic Development and International Cooperation, Rania Al-Mashat, has outlined the country's economic reform progress and government efforts to empower the private sector and increase investment during a meeting with a Goldman Sachs delegation. The delegation included Farouk Soussa, Chief Economist at Goldman Sachs International Financial Institution, and other bank officials. The meeting reviewed key developments in the Egyptian economy and state initiatives aimed at improving the business environment and creating an investment climate attractive to local and foreign investors, thereby enhancing macroeconomic stability. Al-Mashat emphasised that strengthening macroeconomic stability has been a governmental priority since the inception of the economic reform programme, aiming to boost confidence and credibility in the Egyptian economy. 'Maintaining macroeconomic stability is a priority through continuous structural reforms,' Al-Mashat stated. The minister highlighted that current government priorities include sustaining macroeconomic stability and implementing the national programme for structural reforms. This programme is centred on three main pillars: promoting the resilience and stability of the macroeconomy, improving the business environment and investment climate, and advancing the transition to a green economy. Within this framework, Al-Mashat noted that various national entities are implementing numerous measures and policies to enhance public finance discipline and reduce burdens on investors. She mentioned that, for the first time, the state is working to consolidate all fees borne by investors into a single framework, following directives from President Abdel Fattah Al-Sisi. Furthermore, the government has established a national committee focused on the World Bank's Business Ready (B-Ready) report, which will measure and monitor regulations to improve the business environment and support the competitiveness of the Egyptian economy. Al-Mashat also referred to ongoing procedures to promote the transition to a green economy. The minister elaborated on the national strategy for economic development, affirming the state's determination to shift the Egyptian economic growth model towards one based on tradable and export-oriented sectors. 'We are working to elevate the Egyptian economic model to achieve investment and production-driven growth,' she said. Al-Mashat pointed to positive developments in the first half of the current fiscal year, which demonstrated positive growth with a qualitative change, led by the non-petroleum manufacturing sector, tourism, transport and storage, and information and communications technology. This occurred despite regional and global geopolitical tensions. Reviewing relationships with international institutions and development partners, Al-Mashat highlighted their role in driving finance for development, particularly for the private sector. She noted a positive change in the volume of financing alongside economic and structural reform measures, which contributed to an increase in such financing to approximately $4.2bn by the end of last year, surpassing government financing for the first time. The minister also outlined ongoing negotiations with the European Union to implement the second phase of the macroeconomic assistance mechanism and budget support, valued at €4bn. Al-Mashat addressed state measures to empower the private sector and create space for local and foreign investments through the implementation of the State Ownership Policy Document. She explained that the state is focusing on three pillars in this regard. The first is the sovereign fund, which aims to increase returns on assets and maximise their utilisation for future generations. This works alongside the government offerings unit at the Cabinet. The second element involves 'issuing the State-Owned Companies Law to maximize returns on assets and open up space for the private sector,' as Al-Mashat put it. She clarified that this law, currently under debate, concerns the management of or participation in state-owned companies and will enable the establishment of a unit to inventory and monitor these companies. This unit will undertake tasks including determining optimal methodologies for dealing with these companies to enhance private sector empowerment efforts. The third pillar involves partnerships, such as the one with the International Finance Corporation (IFC), which provides advisory services to strengthen public-private partnerships (PPP) in the airport sector. This aims to improve infrastructure, connectivity, and passenger services. © 2024 Daily News Egypt. Provided by SyndiGate Media Inc. (
Zawya
03-06-2025
- Business
- Zawya
Minister of Planning, Economic Development Meets Goldman Sachs Delegation to Review Progress in the Egyptian Economy and Government Efforts to Empower the Private Sector and Increase Investment
H.E. Dr. Rania A. Al-Mashat, Minister of Planning, Economic Development and International Cooperation, met with H.E. Mr. Farouk Soussa, Chief Economist at Goldman Sachs International Financial Institution, and a number of bank officials. The meeting reviewed key developments in the Egyptian economy and the state's efforts to improve the business environment and create an investment climate to attract local and foreign investments and enhance macroeconomic stability. During the meeting, H.E. Dr. Rania Al-Mashat emphasized that since the beginning of the economic reform program, the government has prioritized strengthening macroeconomic stability, to boost confidence and credibility in the Egyptian economy. H.E. Minister Al-Mashat pointed out that the government's priorities include maintaining macroeconomic stability and implementing the national program for structural reforms. This program focuses on three key pillars: promoting the resilience and stability of the macroeconomy, improving the business environment and investment climate, and driving the transition to a green economy. H.E. Dr. Al-Mashat noted that within the framework of the program, varous national entities are implementing dozens of measures and policies that enhance public finance discipline and reduce burdens on investors. For the first time, the state is working to consolidate all fees borne by investors to unify them into a single framework, following the directives from H.E. President Abdel Fattah El-Sisi. The government has also formed a national committee concerned with the Business Ready (B-Ready) report, issued by the World Bank, which will measure and monitor the regulations to improve the business environment and support the competitiveness of the Egyptian economy, and referred to the ongoing procedures to promote the transition to a green economy. H.E. Dr. Al-Mashat highlighted the national narrative for economic development and the state's determination to transform the Egyptian economic growth model to be based on tradable and export-oriented sectors. She pointed to the positive developments in the first half of the current fiscal year, which showed positive growth with a change in the quality of growth, led by the non-petroleum manufacturing sector, tourism, transport and storage, and information and communications technology, despite geopolitical tensions in the region and the world. H.E. Minister Al-Mashat also reviewed the strong relationships with international institutions and development partners to drive finance for development, particularly for the private sector, and the positive change in the volume of financing alongside economic and structural reform measures. This contributed to an increase in financing to approximately $4.2 billion by the end of last year, exceeding government financing for the first time. She outlined the ongoing negotiations with the European Union to implement the second phase of the macroeconomic assistance mechanism and budget support worth €4 billion. H.E. Dr. Al-Mashat addressed the state's measures to empower the private sector and make room for local and foreign investments through the implementation of the State Ownership Policy Document. She highlighted that the state is working on three pillars in this context: first, the sovereign fund, which aims to increase returns on assets and maximize their utilization for future generations, alongside the government offerings unit at the Cabinet, as well as the currently debated law concerning the management of or participation in state-owned companies. This law will enable the establishment of a unit to inventory and monitor state-owned companies, which will undertake many tasks, including determining the best methodologies for dealing with companies to enhance private sector empowerment efforts. At the same time, she pointed to the partnership with the International Finance Corporation (IFC), which provides advisory services to strengthen public-private partnerships (PPP) in the airport sector, to improve infrastructure, connectivity, and passenger services. Distributed by APO Group on behalf of Ministry of Planning, Economic Development, and International Cooperation - Egypt.
Arab News
23-05-2025
- Business
- Arab News
Pakistan business confidence improves by 16% points, survey reveals
KARACHI: Business confidence has significantly improved among investors in Pakistan that is largely attributed to macroeconomic stability, declining inflation and anticipated improvements in business conditions over the next six months, a survey by Pakistan's Overseas Investors Chamber of Commerce and Industry (OICCI) revealed on Thursday. The Business Confidence Index (BCI) Survey – Wave 27, conducted across Pakistan in March-April 2025, shows the overall business confidence improved by 16 percentage points from negative 5 percent to positive 11 percent, compared to the previous Wave 26 survey in October-November 2024. The Manufacturing sector led the recovery, improving from negative 3 percent to positive 15 percent, followed by the Retail/Wholesale sector, which rose from negative 18 percent to positive 2 percent in the latest survey. The Services sector maintained a steady outlook and jumped from 2 percent to 10 percent positive. 'The uptick in business confidence is a clear sign that our economic direction is on the right track. We are focused on creating a conducive environment for investment, supporting private sector growth, and ensuring long-term macroeconomic resilience,' Finance Minister Muhammad Aurangzeb was quoted as saying by the OICCI. 'The improved sentiment among businesses is both encouraging and a validation of our collective efforts.' The development comes more than a week after the International Monetary Fund (IMF) approved a loan program review for Pakistan, unlocking a $1 billion payment which the State Bank of Pakistan said had been received. A fresh $1.4 billion loan was also approved under the IMF's climate resilience fund. Since averting a default in 2023, the South Asian country has been making rigorous efforts to boost its economy by offering various incentives to investors, particularly from abroad. Pakistan's stocks, which rose more than 80 percent last year, have largely resisted selling pressures in recent weeks, despite the country's conflict with India that saw the two sides strike each other with missiles, drones and artillery. Commenting on the survey's findings, OICCI President Yousaf Hussain said the overall business confidence had shown a notable improvement across the business community over the past two years. 'This sharp recovery in the Business Confidence in the latest Wave 27 reflects the resilience of Pakistan's business sector and its readiness to seize emerging growth opportunities,' he said. 'It is heartening to see positive momentum across key sectors, which reflects improved sentiment and growing trust in the country's economic direction.' Hussain said there must be greater policy consistency, transparency and active engagement with key stakeholders, including OICCI members, to maintain this growing positivity in the business confidence. The BCI Wave 27 survey revealed increased optimism for the next six months, with 45 percent of the respondents expressing positive expectations. 'Key contributors to this positive outlook include economic growth, improved government policies, investment climate,' the survey report read. 'Despite the positive trend, 53 percent of the survey respondents reported a negative outlook on business conditions over the past six months, which is a substantial improvement from 66 percent negative sentiments in Wave 26. The key concerns indicated in the survey related to political stability, Rupee FX parity, Energy, and trade policies.' The BCI of foreign investors, who OICCI members randomly selected for the survey, showed a remarkable increase from positive 6 percent to 17 percent, according to the findings. This improvement is primarily attributed to better global business climate, an improved industry environment in Pakistan over the past six months, and expectations of increased capital investment in the coming six months. 'The latest BCI Wave 27 results were better than anticipated, with positive expectations reflected across all major sectors. Employment prospects, expansion plans, and investment expectations demonstrated notable gains, particularly in the Manufacturing and Retail sectors,' OICCI Secretary-General Abdul Aleem said. 'Despite notable improvement on the overall BCI, the new investment plans overall showed an improvement of 19 percent, but remained negative, which is an area of concern and needs to be addressed to further accelerate economic growth, energize large-scale manufacturing, trade and export.'
