There are many positive developments for Pakistan’s economy and indicators show that the South Asian country’s economy is improving with each passing day. Marking a historic turning point, Indus Motor Company (IMC), the assemblers of Toyota Motors in Pakistan, has become the first-ever auto manufacturer to open gates to the global supply chain by signing an agreement with Toyota Egypt to export high-quality products starting July 2023.
Whilst this collaboration is a remarkable achievement for IMC and a significant step towards establishing its global footprint, it is also the first time for any local automotive part to be part of the Toyota Global Supply Chain, opening new horizons and encouraging other such manufacturers to follow suit.
Financial Year 2023 car sales (as reported by the Pakistan Automotive Manufacturing Association) were down by 55% to 126,879 units down. The scarcity of dollars for imports led to the non-availability of CKD and parts, higher car prices owing to massive devaluation, and high-interest rate reaching to all-time level of 22%. Motorbike and three-wheelers sales in the financial year 2023 were down by 35% to 1.186 million. Tractors’ sales in the same period were down by 48% to 30,942 units. Truck and bus sales in the period were down by 41% to 3,836 units.
PM Thanks Saudi Government
In another major move on July 11, 2023, Pakistan has received $ 2 billion in cash deposits from the Kingdom of Saudi Arabia’s (KSA) government. Pakistan’s Prime Minister Shehbaz Sharif has told the Saudi envoy in Islamabad to convey his special gratitude to Saudi Crown Prince Mohammed bin Salman for the deposit of $2 billion cash amount with the State Bank of Pakistan.
The Prime Minister apprised the Ambassador about the formation of the Special Investment Facilitation Council (SFIC) to facilitate and fast-track potential investments from GCC member states, including the Kingdom of Saudi Arabia. He emphasized that mutually rewarding Pakistan-Saudi cooperation in key areas, including IT, energy, infrastructure, and labor, must be fast-tracked and augmented.
CPEC Updates
Similarly, Pakistan and China have agreed to fast-track the implementation of ML-1 and Special Economic Zones SEZs so that projects can be executed timely. Pakistan and China also decided to hold regular interactions and meetings of the Joint Working Groups in order to review the current cooperation under the China-Pakistan Economic Corridor framework and also work closely for the next phase of the project, which is much wider in scope and focuses more on industrialization, agriculture, Science & Technology and Socio-economic development.
IMF
On the other hand, IMF board approval will unlock an immediate release of $1.2 billion, which is due on July 12, 2023. Similarly, the UAE and Saudi Arabia have made commitments of another $3 billion in deposits. Officials expect $3-5 billion in other new multilateral funding. SBA should also facilitate the disbursement of some of the $10 billion in aid promises made at the January 2023 flood relief conference. All these developments show that the country’s economy will further improve in the upcoming days.
