Pakistan: SBP reduces policy rate by 100bps

At its meeting today, the Monetary Policy Committee (MPC) of State Bank of Pakistan (SBP) decided to cut the policy rate by 100 basis points to 19.5%, effective from July 30, 2024.

The Committee observed that the June 2024 inflation was slightly better than anticipated. The Committee also assessed that the inflationary impact of the FY25 budgetary measures was broadly in line with earlier expectations.

The external account has continued to improve, as reflected by the build-up in foreign exchange reserves held by SBP despite substantial repayments of debt and other obligations.

Considering these developments – along with significantly positive real interest rate – the Committee viewed that there was a room to further reduce the policy rate in a calibrated manner to support economic activity, while keeping inflationary pressures in check.

The Committee noted the following key developments since its last meeting:

First, the current account deficit narrowed sharply in FY24 and forex reserves of SBP reserves improved significantly from US$4.4 billion at end June 2023 to above US$9.0 billion.

Second, the country reached a staff level agreement with the IMF for a 37-month EFF program of about US$7.0 billion.

Third, sentiment surveys conducted in July showed a worsening in inflation expectations and confidence of both consumers and businesses.

Fourth, international oil prices have remained volatile in recent weeks, whereas prices of metals and food items have eased.

Lastly, with the ease in inflationary pressures and labour market conditions, central banks in advanced economies have also started to cut their policy rates.

Taking stock of these developments, the Committee assessed that, despite today’s decision, the monetary policy stance remains adequately tight to guide inflation towards the medium-term target of 5 to 7 percent. This assessment is also contingent on achieving the targeted fiscal consolidation, timely realization of planned external inflows and addressing underlying weaknesses in the economy through structural reforms.

Real Sector

Latest high-frequency indicators continue to reflect moderate economic activity. Auto and POL (excluding FO) sales and fertilizer offtake increased on MoM basis in June.

Large-scale manufacturing also recorded a sharp improvement in May 2024, mainly driven by the apparel sector.

The growth in agriculture sector, after showing a strong performance in FY24, is expected to slow down in this fiscal year.

Latest satellite images and input conditions for Kharif crops also support this assessment. However, activity in the industry and services sectors is expected to recover, supported by relatively lower interest rates and higher budgeted development spending.

Based on this, the MPC assessed FY25 real GDP growth in the range of 2.5 to 3.5 percent as compared to 2.4 percent recorded last year.

External Sector

After recording surpluses for three consecutive months, the current account posted a deficit in May and June, in line with the MPC’s expectation. These deficits were largely due to higher dividend and profit payments and a seasonal increase in imports, which more than offset a significant increase in exports and workers’ remittances.

Cumulatively, the current account deficit in FY24 narrowed significantly to 0.2% of GDP from 1.0% in the preceding year. This, along with the revival of financial inflows, helped build the SBP’s FX reserves. Looking ahead, the MPC expects a modest increase in imports, in line with the growth outlook.

At the same time, the continued robust growth in workers’ remittances, along with an increase in exports, is expected to contain the current account deficit in the range of 0 - 1.0 percent of GDP in FY25.

The Committee assessed that the expected financial inflows, including planned official flows under the IMF program, would help finance this current account deficit and further strengthen the FX buffers.

Fiscal Sector

The government’s revised estimates indicate improvement in fiscal balances during FY24, as the primary balance turned into a surplus and the overall deficit declined from last year. However, amidst a shortfall in budgeted external and non-bank financing, the government’s reliance on the domestic banking system increased significantly.

The Committee expressed concern on increasing reliance on banks for deficit financing, which has been squeezing borrowing space for the private sector. For FY25, the government has set the primary surplus target at 2.0% of GDP.

The MPC emphasized on achieving the envisaged fiscal consolidation and timely realization of planned external inflows to support overall macroeconomic stability, and build fiscal and external buffers for the country to respond to future economic shocks.

Money and Credit

The MPC noted that the trends and composition of monetary aggregates during FY24 remained consistent with the tight monetary policy stance. Broad money (M2) and reserve money grew by 16.0% and 2.6%, respectively, well below the growth in nominal GDP.

Almost the entire growth in M2 was led by bank deposits, while currency in circulation remained almost at last year’s level. As a result, the currency to deposit ratio improved, as it declined from 41.1% at end June 2023 to 33.6% at end June 2024. At the same time, the improvement in external account increased the contribution of net foreign assets in monetary expansion.

Meanwhile, the growth in net domestic assets of the banking system decelerated amidst subdued demand for private sector credit. The Committee viewed these developments as favorable for the inflation outlook.

Inflation Outlook

As expected, headline inflation rose to 12.6%YoY in June 2024 from 11.8% in May. This increase was primarily driven by higher electricity tariffs and Eid-related increase in prices, which were partly offset by the downward adjustments in domestic fuel prices.

Core inflation, meanwhile, has steadied around 14 percent over the past two months. The MPC assessed that while the inflationary impact of the FY25 budget is largely in line with expectations, the available information indicates that the full impact of these measures may now take some time to fully reflect in domestic prices.

At the same time, the Committee noted risks to the inflation outlook from fiscal slippages and ad-hoc decisions related to energy price adjustments.

On balance, after considering these trends – and accounting for the sufficiently tight monetary policy stance and ongoing fiscal consolidation – average inflation is expected to remain in the range of 11.5 to 13.5 percent in FY25, down significantly from 23.4 percent in FY24.

Hezbollah denies targeting Golan Heights

Hezbollah has categorically denied what it said were claims made by the enemy that it had targeted an area in the Israeli-occupied Golan Heights. A projectile landed on a soccer field in Majdal Shams on Saturday killed 12 people, including children. 

Majdal Shams is an Arabic-speaking village populated by around 25,000 residents from the Druze community who have a Muslim background. The Golan Heights is a territory that belongs to Syria. It was captured by the Israeli occupation forces in 1967.

Amid ongoing Hezbollah operations against Israeli military positions, in solidarity with Gaza, the Lebanese resistance informed the UN that the Golan Heights incident was the result of an Israeli interceptor hitting the soccer field. 

This is not the first time Israeli missile batteries and Iron Dome systems have missed their targets and hit Majdal Shams.

A similar incident occurred on July 10, when Tel Aviv was quick to blame Hezbollah. 

Assessments later showed technical failure with Israeli defense systems was behind the Majdal Shams incident on July 10, despite Tel Aviv quickly shifting the blame to Hezbollah. 

The attack on Saturday on the Druze community, who also enjoy a large presence in Lebanon, has again raised suspicions due to the timing, the nature of the civilian target, and the size of the explosion.

It is inconsistent with ten months of daily operations by Hezbollah that have pounded Israeli military sites, and on occasions, Israeli settlements, in retaliation for deadly Israeli attacks on Lebanese civilians. 

Hezbollah confirmed its complete lack of involvement in the incident, refuting all the “false claims” being spread. 

Issuing a statement Hezbollah said, “The Islamic Resistance in Lebanon categorically denies the claims made by some enemy media and various media platforms about targeting Majdal Shams. It confirms that the Islamic Resistance has no connection with the incident whatsoever and unequivocally denies all false claims in this regard.”

The residents of Majdal Shams, located a few kilometers from Lebanon, are aware that their town, under the rules of war, was within a zone of peace and security. 

Hezbollah is also aware of this and of its wide range of military targets.

Experts say that between the determination, sincerity and transparency of the Lebanese resistance and the criminal history of the Israeli occupation, only one party has a track record of lies and that is Tel Aviv. 

Furthermore, the genocidal war waged by Israeli Prime Minister Benjamin Netanyahu and his military against the Gaza Strip, along with the international positions, judicial or political, strongly point to the real perpetrator.

In light of the accusations launched by Israeli officials and media after the Majdal Shams incident, Netanyahu cut his trip to the United States short by several hours and returned to Tel Aviv. 

Israeli media said he was to chair a meeting of the small ministerial council. Hebrew media also reported that Netanyahu held preliminary consultations with military officials.

Lebanese Speaker of Parliament Nabih Berri confirmed that Hezbollah’s denial affirms its commitment and non-responsibility, and that Lebanon is not responsible for what happened. 

During a call with a UN Coordinator in Lebanon, Joanna Wronecka, Berri stated that Lebanon, which has been subjected to continuous Israeli aggression for over nine months, with the Israeli military targeting civilians, agricultural areas, emergency crews, and media personnel with internationally banned weapons, remains committed to Resolution 1701 and the rules of engagement by not targeting civilians, despite these blatant Israeli violations.

Former Lebanese Druze Progressive Socialist Party leader Walid Jumblatt said, “In light of Hezbollah’s statement denying the Islamic Resistance’s involvement in what happened in Majdal Shams, we emphasize the warning and alert regarding what the Israeli enemy has been working on for a long time to ignite strife and fragment the region and its components.”

The veteran politician added, “We have previously thwarted this project, and while it is reemerging, we are prepared alongside the resistance and all those confronting Israeli criminality and occupation.”

Jumblatt pointed out that “the history and ongoing nature of the Israeli enemy is full of massacres committed against civilians relentlessly”. 

He added, "The call is for everyone in Lebanon, Palestine, and the Golan to avoid any slip or incitement within the framework of the enemy’s destructive project, with the need to prevent the expansion of the war and to stop the aggression and firing immediately, emphasizing the rejection and condemnation of targeting civilians, whether in occupied Palestine, the occupied Golan, or southern Lebanon.”

Meanwhile, the head of the Lebanese Democratic Party and political leader of the Druze community, Talal Arslan, underscored, “What happened is nothing but a vile and failed attempt to detach the Arab Syrian Golan from its geographical nature and familial extensions, which has always rejected collusion against its Syrian Arab identity.”

He said in a statement, “The Golan will not fall into the trap of Israel’s project to feign protection of minorities, which aims only to fragment the region into micro-states that protect its forged borders.”

He also stated that “all free people in the world and in the Arab homeland, especially the unified national Arab Druze, are wholeheartedly with our people in the heroic Golan. It is the depth of our honorable resistance and an inseparable part of the occupied territories, which will only return to its natural state through steadfastness and resistance.”

The UN special coordinator for Lebanon, Jeanine Hennis-Plasschaert, and UNIFIL force commander General Aroldo Lazaro warned that further intensification of strikes “could ignite a wider conflagration that would engulf the entire region in a catastrophe beyond belief”. 

They urged maximum restraint from all sides, adding they were in contact with both the Israelis and Lebanese. 

Axios cited a US official as saying that the Golan incident “could be the trigger we have been worried about and tried to avoid for 10 months”. 

Lebanon’s foreign minister, Abdallah Bou Habib, told Reuters that any significant attack by Israel would lead to a “regional war”. 

 

 

Netanyahu should resign and surrender

Jill Stein has been one of the loudest and clearest voices in the race for president demanding justice for Gaza, and that begins with Benjamin Netanyahu immediately resigning as Prime Minister and surrendering to authorities. Netanyahu is a war criminal who has been charged with the following crimes by the International Criminal Court (ICC);

·  Starvation of civilians as a method of warfare as a war crime contrary to article 8(2)(b)(xxv) of the Statute;

·  Willfully causing great suffering, or serious injury to body or health contrary to article 8(2)(a)(iii), or cruel treatment as a war crime contrary to article 8(2)(c)(i);

·  Willful killing contrary to article 8(2)(a)(i), or Murder as a war crime contrary to article 8(2)(c)(i);

·  Intentionally directing attacks against a civilian population as a war crime contrary to articles 8(2)(b)(i), or 8(2)(e)(i);

·  Extermination and/or murder contrary to articles 7(1)(b) and 7(1)(a), including in the context of deaths caused by starvation, as a crime against humanity;

·  Persecution as a crime against humanity contrary to article 7(1)(h);

·  Other inhumane acts as crimes against humanity contrary to article 7(1)(k).

Jill demands Americans should not support the Biden-Harris funded genocide, and they should never accept this forced alliance with a war criminal.

Jill Stein: Wildcard Entry in US Election

Jill Ellen Stein born on May 14, 1950, is an American physician, activist, politician. She is currently running for president in the 2024 United States presidential election. Her campaigns for president have focused heavily on the proposal of a Green New Deal, which includes a number of reforms intended to address climate change and income inequality, as well as civil and political rights reform.

She was the Green Party's nominee for president of the United States in the 2012 and 2016 elections and the Green-Rainbow Party's candidate for governor of Massachusetts in 2002 and 2010.

In 2012, Stein received 469,015 votes, which accounted for 0.36% of the popular vote; in 2016, she received 1.45 million votes or 1.07% of the popular vote.

Stein originally supported activist and scholar Cornel West's 2024 presidential campaign under the Green Party and became his campaign manager.

After West withdrew his bid for the Green presidential nomination in order to instead continue his run for the presidency as an independent, Stein retracted her endorsement for West and said the Green Party would find a nominee elsewhere. She also hinted at a possible bid of her own.

On November 09, 2023, Stein announced her third bid for president on X (formerly Twitter), citing her main priorities as being anti-war, paving the way for a Green New Deal, Universal Healthcare, and a "pledge to stop genocide”. 

Stein's campaign has been criticized by the Democratic Party as having the potential to erode Joe Biden's support in the general election among left-wing voters.

United States: A shameful moment in history

Israeli Prime Minister Benjamin Netanyahu came to Washington DC to address Congress. According to Farrah Hassen of Institute of Policy Studies, it was “a shameful moment in US history.” 

“The International Criminal Court is seeking a warrant for Netanyahu’s arrest for war crimes and crimes against humanity,” Farrah explains. “But instead of arresting him, Congress gave him multiple standing ovations.”

It was the fourth time Netanyahu was invited to address the body — the most for any world leader. But as thousands of protestors outside raised their voices for a ceasefire in Gaza, something was different this time.

Roughly half of the Democratic caucus boycotted Netanyahu’s speech, refusing to be seen applauding — and complicit with — a perpetrator of genocide. 

"Support for Israel has become a thoroughly partisan issue” thanks to this movement pressure, Phyllis Bennis told Democracy Now! 

“The fact that more than 100 Democratic lawmakers decided to skip the speech is a real statement of how supporting Netanyahu has become a political liability for public figures across the United States."

“Our movement has redefined the demand for a ceasefire,” she added. It now means not only an end to the violence, but also “a massive escalation” of humanitarian aid and an immediate halt to the arms shipments Netanyahu came before Congress to demand more of.

In a powerful op-ed before the speech, Khury Petersen-Smith urged members of the Congressional Black Caucus, historically known as the conscience of Congress, to boycott Netanyahu's address. "Make no mistake,” he warned: “This invitation affirms Israel’s genocide” and is “an affront to international law." 

Pointing out the long history of solidarity between movements for Black and Palestinian freedom, Khury called on the Black Caucus to skip the speech, oppose those weapons transfers, and call for a permanent ceasefire.

Ultimately, many key members of the caucus did skip — and Vice President Kamala Harris, who was a caucus member as a senator, told Netanyahu afterward that she “will not be silent” about Gaza. 

Also this week, Americans celebrated the legacy of another key figure who connected movements for freedom at home to movements against war abroad, the late vice president, cabinet secretary, and New Deal architect Henry A. Wallace.

At the First Annual Henry A. Wallace Symposium, co-presented with the Wallace Global Fund and The Nation and co-sponsored by Busboys and Poets, several inspiring panelists talked about "Countering American Fascism: Lessons from Organizing in the US Heartland." 

It was the capstone event of Henry A. Wallace Fellowship, a paid summer internship program to build the future of the progressive movement. The speakers shared lessons from organizing, movement building, deep canvassing work, and Henry A. Wallace’s own life. 

Together, they highlighted how social movements are countering the dangerous force of American fascism by building an alternative vision: a multi-racial democracy and an economy that works for us all. 

US Election: Selecting Lesser (Bigger) Evil

I have been writing these blogs since June 2012. Over the years I have developed certain premises that include: 1) the United States is the biggest war monger, it creates conflicts around the world and supplies funds to perpetuate these conflicts to maintain its hegemony, 2) US foreign policy is driven by military complexes, the biggest beneficiary of conflicts/ wars, 3) US oil companies that earn windfall profits during conflicts, particularly in the MENA (Middle East and North Africa) region are the major donors in presidential election and 4) dishonest western media often run concocted stories to prove that the US is right in imposing economic sanctions on certain countries.

I have also come to the conclusion that United States, is not a true democracy but controlled-democracy. The citizens are forces to elect either of the two candidates. They term it selecting the lesser evil, but I term it “selecting the bigger evil” on the basis of above stated premises.

The US president and the entire US administration is supplying tons of lethal arms to Ukraine and Israel to perpetuate wars, rather than negotiating ceasefire. In Gaza alone nearly 40,000 people, mostly women and children, have been killed and the entire enclave has been reduced to debris, but US administration refuses to accept it is genocide.

Lately, Israeli Prime Minister, Benjamin Netanyahu was invited to address US Congress Members for the fourth time, whereas he should have been handed over to the authorities who have held him responsible for the genocide in Gaza.

My readers may recall one of my recent posts, “Neither Biden nor Trump fit to be US President”. Ironically, the US electoral system does not support candidature of an independent and US citizens will be forced to choose between Kamala Harris and Donald Trump, the darlings of military complexes and Wall Street and fully supported by the western mainstream media, of course in exchange for tons of dollars given to them to tow the US policies.

 

 

 

 

 

 

 

 

 

 

 

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US hates and destroys three types of countries dated July 11 2024

https://shkazmipk.blogspot.com/2024/07/us-hates-and-destroys-three-types-of.html

 

This a very complicated subject but we have tried to be brief, concise and to the point. Let us say point blank that United States just can’t stand three types of countries: 1) countries not willing to accept its hegemony, 2) countries rich in mineral resources, especially energy products and 3) countries having strong social and cultural bonding.

The first category is led by China and Russia, which has a long history on conflict/ wars called ‘Cold War Era’. The later addition is Iran, which has been facing US sanctions for more than four decades because it termed United States ‘The Biggest Satan’.

In the second category most prominent are the oil and gas producing countries. These are hostage of US hegemony because of restriction on energy trade in ‘petro-dollars’ only. The countries facing extreme US hostilities include, Iran, Iraq, Libya, Venezuela and Russia.

United States suffers from worst social evils that include distance from religion, drug/ alcohol addiction, extra marital relation, abortion etc. Therefore, the US hate Muslim countries, some of them rich in energy resources, on top of the list are Saudi Arabia and Iran.

Ironically, the US foreign policy is dictated by three groups: 1) military complexes, 2) oil exploration and production companies and 3) companies owned and operated by Zionists.

The name of the game is create conflict, supply funds and arms to rebel groups and weaken the states. Till yesterday Venezuela was friend and biggest partner in oil trade, but at present it faces sanctions.

United States follows hybrid war and always chose battle grounds thousands of miles away from its borders, which include Korean Peninsula, Arabian Peninsula, Middle East and North Africa. This time Ukraine has been chosen to fight a proxy war against Russia. Let no one forget United States dropped two atom bombs on Japan in the Second World War.

The logical conclusion is, “United States is merchant of death, the biggest war monger and the biggest arms supplier, which wants to establish its hegemony around the world. It has the capacity to find and feed the touts, install and topple the governments and eliminate the agents when they become redundant”.

 

US Election: A race like no other in history

Immediately after US President Joe Biden dropped out of the 2024 race, a move not seen since President Lyndon Johnson stepped back at the height of the Vietnam War, a question suddenly arose. What path would Vice President Kamala Harris take to try and beat Donald Trump?

“Americans are going to have to choose between moving forward or backward, between hope and hate, between unity and division,” Biden said. “We have to decide—do we still believe in honesty, decency, respect, freedom, justice and democracy.”

The Republican nominee had been on a winning streak of late, avoiding a spotlight on his historic criminal conviction, pending trials or even repeated references to a fictional serial killer.

The media spent almost a month focused on Biden, his age and botched debate performance (Biden, at 81, is three years older than Trump).

Kamala wasted no time providing answers to the question. Her campaign is focusing on Trump’s status as a convicted felon, his various other legal entanglements, including being found liable for sexual abuse, and his starring role in blowing up abortion rights.

“I know Donald Trump’s type,” said the 59-year-old Kamala, a former US senator, state attorney general and district attorney.

Francis Wilkinson writes in Bloomberg Opinion that from here to November, the prosecutor should prosecute the predator. 

Polls showed the race tightening with Kamala’s entry, with more enthusiasm among Black and younger voters. Republicans are already trying to use immigration against her, despite Trump arguably being the main reason a bipartisan immigration reform bill was killed.

Then there’s the question of whether Americans are ready to elect the first female president.

Trump, who has a history of racist and misogynistic statements, risks alienating some of the very voters he needs if he pursues that track this time.

Many prominent Republicans however have already started racial attacks on Kamala, calling her “the DEI candidate.” In short, this is a race like no other in US history.

The next step will be for Kamala to select a running mate ahead of the Democratic National Convention.

As the new race was forming up this week, Biden addressed the nation, framing his decision to bow out as a way of uniting the country around a new generation of leaders. He also warned of what he’s said is the existential peril democracy faces in November. 

Courtesy: Bloomberg