IT Exporters
ISLAMABAD: In order to facilitate the IT exporters to boost the exports of IT and IT-enabled services, SBP has increased the permissible retention limit of IT exporters from 35% to 50% of their export proceeds in the Exporters’ Specialized Foreign Currency Accounts (ESFCAs).
Further, the usage of the balances available in the ESFCAs has been simplified by allowing IT exporters to make their payments from these accounts without any approval from SBP or banks.
The banks have also been advised to facilitate the issuance of debit cards, enabling IT exporters to make online payments from the balances available in their ESFCAs.
Moreover, a new Framework for Freelancers has been introduced to further ease the opening of their bank accounts and allow higher retention of amounts in their FCY accounts.
The freelancers will now be able to open the bank accounts both digitally and physically at their choice with minimum documentation requirements. Further, their ESFCAs shall be opened concurrently with the opening of their primary PKR account.
The freelancers can retain 50% of their export proceeds or USD 5,000/- per month, whichever is higher, in their ESFCAs and can make all payments from these accounts
without any approval from SBP or banks.
SBP released its annual report for FY23
Meanwhile, the State Bank of Pakistan (SBP) released today its Annual Report on the State of Pakistan’s Economy for the fiscal year 2022-23.
According to the report, Pakistan’s economy faced multiple challenges during FY23, as longstanding structural weaknesses exacerbated the impact of successive domestic and global supply shocks of unprecedented nature.
The country’s macroeconomic situation had already begun to deteriorate since the second half of FY22 in the aftermath of the Russia-Ukraine conflict, elevated global commodity prices, and an unplanned fiscal expansion. The situation worsened
during FY23 owing to floods, delay in the completion of the 9th review of the IMF’s Extended Fund Facility (EFF) program, continuing domestic uncertainty, and tightening global financial conditions.
Particularly, the devastating monsoon floods significantly dented economic activity, fueled inflationary pressures, increased stress on external accounts, and widened fiscal imbalance because of spending on relief efforts. Similarly, the uncertain global economic and financial conditions, softening – but still elevated – global commodity prices, higher debt servicing, and reduced external inflows had implications for various sectors of the economy.
The confluence of these developments substantially weakened Pakistan’s macroeconomic challenges and performance during FY23. The real GDP growth fell to the third-lowest level since FY52, whereas average National CPI inflation spiked to a multi-decade high. While the current account deficit narrowed considerably, limited foreign inflows maintained pressures on the external account leading to a decline in SBP’s FX reserves.
