saturday, 23 June, 2012 Page 19 Dollar slips in Asian trade KARACHI IsMaIL DILaWar F ORESEEInG the troubled econ- omy growing by a “notable” 3.7 percent in the outgoing FY12, the central bank stressed the pressing need for rebasing the country’s national income accounts in synchrony with the changing nature and composition of current economic activities. Further, while foreign financing had al- most dried up during the July-MarchFY12, the cash-strapped government borrowed a massive Rs 847.5 billion from domestic sources – primarily the banks – to bridge the 4.3 percent budget deficit the country faced during the quarter in review. The bor- rowed amount is higher by Rs 147 billion or 21 percent than the Rs 700.1 billion the gov- ernment had raised during the correspon- ding period of FY11. The huge fiscal deficit, the bank said, inflated the government’s do- mestic debts by a whooping Rs 1.2 trillion to Rs 7.2 trillion during the review period. The State Bank said the available data suggested that the budgetary gap for the full year, July-JuneFY12, would exceed the re- vised target of 4.7 percent and that the over- all revenues had been lower than expected. SBP, in its Third Quarterly Report for FY12, dubbed the continuous slump in for- eign and domestic investment, acute energy shortages and the persistently high fiscal deficit as major risks to the macro-economy. These negatives, the bank said, were a source of growing concern for the economic mangers and had all the potential to directly stifle long-term growth prospect. REBASING INCOME ACCOUNTS: The central bank said it was important that GDP data should reflect the changing nature and composition of the country’s economic activ- ities. Adding that Pakistan Bureau of Statis- tics (PBS) was already in the process of rebasing national income accounts. “We ex- pect that PBS would also consider releasing GDP estimates on a quarterly basis, which is now a norm in emerging markets. It will help get a more accurate and timely picture of the real economy, which will allow for more proactive policy corrections,” the SBP said. ECONOMIC GROWTH: About the eco- nomic growth, the bank said the expected 3.7 percent growth during FY12 was higher than the 3.0 percent realised in the previous year, but less than the target of 4.2 percent. nevertheless, it said, this performance was notable given the considerable damage to the cotton crop due to floods in August 2011; ongoing energy shortages; the rise in inter- national oil prices; and security concerns. WEAK MACRO INDICATORS: “Al- though Pakistan’s economy has shown some recovery in terms of GDP growth, the key macro indicators still remain weak,” the SBP said. The central bank said this 3.7 per- cent growth rate had also been more broad- based with a larger contribution from the commodity producing sectors compared to FY11. Moreover, as in the past, growth had been driven by domestic consumption, both private and public, which was partially offset by a decline in domestic investment and ex- ternal demand. The State Bank said though the growth in current expenditure was lower compared to the previous year, the govern- ment had enhanced its development spend- ing which should improve the country’s long-term growth prospects, besides creat- ing financing pressures. PSEs BURDENING BUDGET: The SBP expressed concern over operational effi- ciency of key Public Sector Enterprises (PSEs) that, it warned, were adding to the cash-strapped country’s fiscal burden. FISCAL DEFICIT FINANCING: While external financing dried up the government the government relied more on domestic sources to finance the fiscal gap and bor- rowed Rs 847.5 billion in Jul-Mar FY12 against Rs 700 billion of last year. “Such bor- rowing is inflationary and a risk to macro- stability,” the regulator warned. Currently, two acts, namely the Fiscal Responsibility and Debt Limitation (FRDL) Act (2005) and the newly amended SBP Act, provide guide- lines on overall debt stocks and borrowing from the central bank, respectively, the SBP said. The government’s greater reliance on short-term borrowing, the SBP said, was cre- ating liquidity management problems for the central bank, and rollover and interest rate risks for the government. “LESS ADVERSE”: The SBP said devel- opments in Q3-FY12 in external sector were less adverse than expected and that larger inflows of remittances and a lower trade deficit explained this relative improvement. The current account deficit during Jul- Mar FY12 was $ 3.1 billion, compared to a deficit of $ 10.0 million in the corresponding period last year, it said. FOREIGN INFLOWS: More impor- tantly, the expected inflows under Coalition Support Fund (CSF), the auction of 3G li- censes, and arrears from PTCL privatisa- tion, did not materialise during the quarter. ISLAMABAD aMEr sIaL The lukewarm response of the Sindh government to the wind power investors has shifted a majority of interested investors in the solar power to Punjab, where the provincial government is more cooperative in providing land and other amenities, an official source said. Punjab government, he said was very cooperative with regards to promote photovoltaic (PV) power projects in the province. Investors are approaching Punjab as the Sindh government is totally reluctant to grant land for wind and solar power projects. He mentioned lack of infrastructure as another major reason for the stalling of wind power projects in Sindh. While in the solar power the major hurdle had been the ini- tial cost; but considering the disparity in demand and sup- ply the investors were ready to invest as they could gain maximum return on their investment. Punjab government is interested in promoting solar power in less developed areas but once some successful models are available it could be used for pumping the water through tubewells. Only recently the government has ap- proved a solar tubewell project. According to the Alternate Energy Development Board, solar energy has excellent potential in Pakistan that receives high levels of solar radiation throughout the year. Every day, the country receives an average of about 19 Mega Joules per square metre of solar energy. It is available at a rate of 1000 watts per square meter in the country. This can be converted to DC electricity with the help of solar PV cells, which may be used to pump water, operate fans, TV and telecommuni- cations directly during daytime. The electrical energy gener- ated during the day time, can also be stored in deep cycle lead acid batteries which can be used at night to provide power for lighting, radio, Television and fans. The system will be user-friendly and designed as a stand-alone system for each household, who will be trained to operate and maintain it. The user will only be required to switch on/off the system, as is done in normal home lighting systems. In addition, solar photovoltaic panels can generate enough electricity to pump water from depth of 350 to 1000 feet. Many of these villages are far from the main transmis- sion lines of the national grid and, because of their relatively small populations; it is usually not economically viable to connect these villages to the grid. Solar energy, on the other hand, has excellent potential in areas of Pakistan that receive high levels of solar radiation throughout the year. Branchless banking continues to branch out g Users transact Rs 85b via branchless banking despite the best efforts of those oh so mean banks KARACHI staff rEpOrt While branchless banking attracts more and more users, especially in the country’s un- banked rural areas, the limited banks’ au- thorisation to the agents is hindering its expansion. According to central bank’s quar- terly report on branchless banking, the branchless banking had seen another quar- ter of growth on almost all fronts during July-March FY12. Growth in the agent’s net- work and number of mobile wallets was 19 percent and 14 percent, respectively, whereas the number and value of total transactions increased by 23 percent and 7 percent, respectively. During the review quarter, more than 25 million transactions worth Rs 85 billion or $ 938 million had been processed through branchless banking channels. “The average size of transaction has further reduced to Rs 3,367 showing that technology is reaching the previously un-banked poor,” the SBP observed, adding that the customers had transferred around Rs 99 million through their mobile to other m-wallet accounts, showing the adoption of technology by the common man. Rs 13.8 bil- lion government to person payments and Rs 60 million salary payments had been dis- bursed during the quarter via mobile bank- ing. “The growth in number of transactions is mainly due to the increasing volume of bill payments, person to person fund transfers, and airtime top-ups, which accounts for 42 percent, 32 percent and 10 percent respec- tively,” the SBP said. Similarly, it said, the growth in value of transactions was again owed largely to P2P payments. All other cat- egories had either experienced slightly nega- tive growth or had contributed a small share in total value. While considering share in total value, all bulk payments constituted al- most 50 percent of the total value of transac- tions followed by P2P payments (36 percent) and bill payment (12 percent). Growth has been observed in loan repay- ment transactions as Rs 312 million were collected through BB agents. Both models, Easypaisa and Omni, were trying to increase their linkages with microfinance providers to allow microfinance borrowers to use BB channels for repayment of loans. Moreover, volume of salary disbursement has also in- creased mainly due to Easypaisa’s arrange- ment with government organisations for salary disbursement. Around Rs.13.8 billion have been transferred on account of G2P payments through the existing agents’ based banking. However, the current 14 percent growth rate of m-wallets showed some slow- down compared to the last quarter when the growth rate was around 40 percent. Similar trend is observed in deposits value. “The less-than-expected growth rate in m-wallets is owed to the fact that only 23 percent of the total active agents (around 24,101) are authorised by banks to open the m-wallet accounts,” the central bank said. The num- ber of registered m-wallets has reached to 1.03 million at the end of the quarter under review in which the number of active m-wal- lets is about 53 percent. In addition, 5,573 debit cards have also been provided to mo- bile account holders, indicating efforts to create value proposition in m-wallets. The fast growing network of branchless banking has reached at 26,792 agents. This agents’ network now has foot prints in 89 percent of total districts in the country. The BB market is ready for expansion as while the Waseela Microfinance Bank, a subsidiary of M/s Orascom, has commenced its busi- ness operations as a nationwide microfi- nance bank, other banks are coming in. Uncle Sam’s men want to take over our farms g ‘US agrichemical company wants control over agriculture’ ISLAMABAD ONLINE Chairman Agriforum Pakistan Ibrahim Mughal has clamed that the US agrichemi- cal Company Monsanto has planning to get its control over Pakistan’s agriculture for setting up its monopoly. While talking to Online on Friday Ibrahim Mughal said that for the free economy it was necessary that Monsanto should not be allowed in Pak- istan. He said that Monsanto was also working in neighboring India but it has brought no improvement in their agriculture sector then how it can increase our country’s cotton production. He explain that produc- tion increase in India has not been usage of BT cotton but other factors like increase in irrigated areas and reforms in agriculture sector have contributed to enhance produc- tion. He added that use of BT cotton vari- eties will not cause increase in production. Sources said that some high level bureau- crats in Punjab Province were meanvouring for giving US agrichemical Company exclu- sive right of marketing BT cotton but Punjab government has so far rejected this the plan of US Company which were demand to pay penalty if any other variety is cultivated. Time to move on to the next base, sweetie SBP reminds its sweetheart PBS to rebase national income accounts and issue quarterly GDP estimates. And it also reminded mankind that contrary to popular opinion, energy shortage and lack of investment were in fact pretty perilous for the economy. Elsewhere, there was the reiteration that the economy would grow by 3.7pc in FY12, and so there’s a fair chance that we might eventually get to live happily ever after... Sindh threw caution to the wind; Punjab bathes in sunshine PUNJAB WOOS SOLAR POWER INVESTORS PRO 21-06-2012_Layout 1 6/23/2012 6:24 AM Page 1