Business
SBP to hold rate as floods fuel inflation | The Express Tribune
KARACHI:
Pakistan’s central bank is expected to keep its key rate steady on Monday, a Reuters poll showed, as floods that ravaged farmland and threaten fresh food inflation prompt policymakers to extend their pause on monetary easing.
Thirteen of 14 analysts surveyed forecast the State Bank of Pakistan (SBP) will hold its policy rate at 11%, while one projected a 50 basis-point cut.
Since late June, floods have swamped Punjab’s farmland, disrupting supply chains and stoking inflation fears, with nearly 950 people killed, 6,500 livestock lost, 8,200 houses destroyed and 4.5 million displaced as waters move south.
“Given the uncertainty, we expect the central bank may pause in September, though our base case allows for a 50100 bps cut by year-end,” said Waqas Ghani, Head of Research at JS Global Capital.
Analysts flag GDP hit, food price shocks
Sana Tawfik, Head of Research at Arif Habib Limited, said agricultural losses could shave around 0.2% off gross domestic product (GDP) growth, though reconstruction may provide some offset.
Analysts said flood-driven supply shocks, especially in wheat, rice and vegetables, could keep inflation above the central bank’s 57% target.
Saad Hanif of Ismail Iqbal Securities said food inflation could face “temporary shocks”, with wheat prices up about 50% in a month.
Inflation eased to 3% in August from 4.1% in July, but the finance ministry, which projected 4% to 5%, warned crop losses and extreme weather could soon push prices higher.
“Manufacturers have also raised selling prices, citing higher fuel and transport costs and delays in input deliveries caused by flooding,” said Ahmad Mobeen, Senior Economist at S&P Global Market Intelligence.
The SBP has cut rates by 1,100 basis points since June 2024, when they stood at a record 22% after inflation peaked near 40% in 2023. It last cut rates by 100 bps in May, after a March pause, and held steady in June amid oil price pressures from Middle East tensions.
Still, some see room for cuts
“Real interest rates are still high enough to allow for a cut, especially with the Fed turning dovish, but the floods are inflationary, particularly for food,” said Ammar Habib, an independent analyst.
ADB warns to insure against floods
Meanwhile, an Asian Development Bank (ADB) expert urged Pakistan, and other countries in Asia and the Pacific, to integrate insurance into urban planning to limit flood losses and speed recovery.
Arup Kumar Chatterjee, Principal Financial Sector Specialist at ADB, said on Friday that cities like Lahore in Pakistan and Gurugram, India, face severe flooding risks but remain financially exposed due to poor planning. Streets turn into rivers and homes into ruins, leaving cities in financial peril. “These issues are not random; they are the result of poor planning,” he noted.
“In 2023, natural hazards in Asia and the Pacific caused $65 billion in losses, with 91% of that amount uninsured. In 2024, global insured losses reached $135 billion, showing a huge protection gap of nearly 90%,” wrote Chatterjee.
The ADB official pointed out that ancient cities managed risks better. Mohenjo-Daro in Pakistan and the aqueducts in Rome were designed to withstand floods.
“Today’s approach to disaster management has changed. Governments often focus more on post-disaster relief than on flood prevention. This often leads to different government departments working in isolation and ignoring risk management,” he said.
The cost of neglecting insurance is clear. He pointed out that Bangkok’s 2011 floods caused $47 billion in damage, with only a third insured. Chennai’s 2015 floods brought $3.5 billion in losses, with just 34% covered. Recent storms in Dubai also exposed major gaps.
In contrast, cities that adopt insurance fare better. During Valencia’s 2024 floods, a third of $10 billion in damages was insured. Auckland’s 2023 floods had 40% coverage, allowing 112,000 claims to be processed quickly.
“We have the tools to manage flood risks better, including satellite technology and real-time data analysis. If we can predict floods, we should also be able to finance protection in advance,” stressed Chatterjee.
He urged that insurance be treated as infrastructure. Quick payouts based on rainfall data can help communities recover faster. He urged Pakistan and other governments to make coverage accessible, including for renters and low-income families.
“No major project should proceed without a risk financing plan,” he said, adding that, “Floods are inevitable; the question is whether we can respond quickly enough to prevent despair. Every uninsured project is a risk to taxpayers, costing them in both money and stress. Cities need to embrace insurance as a foundational element of their planning, not as an afterthought.”
The cost of being unprepared, he warned, far outweighs the cost of insurance.
REUTERS WITH ADDITIONAL INPUT FROM OUR CORRESPONDENT
Business
Green energy exports: $10-bn green ammonia project positions India as global clean-fuel supplier; Kakinada plant nears key milestone – The Times of India
A $10-billion green hydrogen and green ammonia project at Kakinada in Andhra Pradesh is set to cross a major construction milestone, reinforcing India’s ambition to emerge as a global supplier of clean energy to markets such as Germany, Japan and Singapore.The first major equipment erection ceremony of AM Green’s Green Hydrogen and Green Ammonia Complex will be held on January 17 and will be attended by Chief Minister N Chandrababu Naidu and Deputy Chief Minister Konidala Pawan Kalyan, state government officials said, PTI reported.Billed as one of the largest clean-energy investments in India to date, the project involves a total outlay of $10 billion and is expected to generate up to 8,000 jobs during the construction phase, besides substantial high-skill employment during operations and across allied sectors including renewable energy, logistics, storage and port services.AM Green is developing India’s first and the world’s largest green ammonia complex at Kakinada, with a planned capacity of 1.5 million tonnes per annum, through the brownfield conversion of an existing ammonia-urea facility. The project will be commissioned in phases, beginning with 0.5 million tonnes per annum by 2027, scaling up to 1 million tonnes by 2028 and reaching full capacity by 2030.Once operational, the facility will enable India’s first exports of green ammonia, which is increasingly being adopted globally as a clean shipping fuel, for power generation and as a carrier for green hydrogen.The integrated project spans 7.5 gigawatts of solar and wind capacity, 1,950 megawatts of electrolyser capacity and 2 gigawatts of round-the-clock renewable power, supported by pumped hydro storage, including India’s first such facility at Pinnapuram in Andhra Pradesh.AM Green has already signed long-term supply agreements with Germany-based utility Uniper and is in advanced discussions with potential buyers in Japan and Singapore, establishing India’s first green-energy export linkages with Europe and advanced Asian economies.The project is aligned with Andhra Pradesh’s Integrated Clean Energy Policy, 2024, which seeks to position the state as India’s primary hub for green hydrogen and green ammonia. Once fully commissioned, the facility is expected to mark a structural shift from energy import dependence towards clean-energy exports, placing Andhra Pradesh at the centre of the global green-energy value chain.AM Green, backed by the founders of the Greenko Group, is developing the project through AM Green Ammonia, a partnership involving Malaysia-based Gentari, Singapore’s sovereign wealth fund GIC and the Abu Dhabi Investment Authority. Construction at the Kakinada site is already under way, placing it among a limited set of large-scale green ammonia facilities globally that meet Renewable Fuels of Non-Biological Origin (RFNBO) standards.Beyond production, the project showcases an end-to-end clean-energy ecosystem within a single state, encompassing large-scale renewable generation, round-the-clock green power backed by storage, hydrogen and ammonia production, and port-based export infrastructure.AM Green has also moved to strengthen global linkages. In May last year, it announced a partnership with the Port of Rotterdam Authority to create a dedicated green-fuel corridor linking India with north-western Europe, aimed at enabling annual trade of up to 1 million tonnes of green fuels valued at nearly $1 billion. Earlier, it tied up with global logistics firm DP World to develop green fuel storage and export facilities in India and overseas.“This is not merely an industrial project, but a strategic step in positioning Andhra Pradesh and India as leaders in clean-energy exports and climate action,” the state government said.
Business
Budget 2026 Should Support MSMEs, Critical Minerals For Boosting Trade Resilience: Deloitte
Last Updated:
Deloitte India urges FY27 Budget to boost MSME support and critical mineral security, job protection and advancing India’s global manufacturing and clean energy goals.
Budget 2026 Expectations.
Budget 2026: Deloitte India has pitched a sharper focus on MSME support and critical mineral security in the FY27 Union Budget, arguing that these measures are essential to strengthen India’s trade resilience and reduce external vulnerabilities amid rising global uncertainty.
In its Budget expectations note, Deloitte India said micro, small and medium enterprises play a pivotal role in the economy, accounting for nearly 46% of India’s exports and emerging as the second-largest employer after agriculture. According to the firm, easing financial and compliance-related pressures on MSMEs would help them cope with global volatility, sustain production and remain competitive in overseas markets.
The Union Budget 2026-27 will be tabled on Sunday, February 1.
“Strengthening MSMEs will safeguard jobs and drive inclusive economic growth, boost rural incomes and support India’s ambition to become a global manufacturing hub,” Deloitte said.
The firm recommended measures such as enhanced export credit availability, concessional financing and simplified digital compliance systems to reduce the regulatory burden on small businesses. It also called for comprehensive training programmes to improve last-mile competitiveness of MSMEs, particularly those linked to global value chains.
Deloitte further suggested targeted export incentives or enhanced duty drawback support for tariff-sensitive sectors such as ready-made garments, gems and jewellery, and leather, which are more vulnerable to global trade disruptions.
Highlighting the risks from an increasingly protectionist global environment, Deloitte Economist Rumki Majumdar said rising uncertainty from tariff hikes, changes in rules of origin and non-tariff barriers could disproportionately affect Indian exporters. While the direct impact of global trade frictions on GDP growth may be limited to 40-80 basis points, the spillover effects on MSMEs and employment could be far more severe.
“MSMEs contribute 30.1 per cent to GDP, account for 45.79 per cent of India’s exports and employ nearly 290 million people; disruptions in export markets or tightening trade rules pose serious risks to jobs and income stability,” Majumdar said.
Beyond MSMEs, Deloitte emphasised the need for a strategic push on critical minerals to secure supply chains and support India’s clean energy transition. It proposed setting up a dedicated critical minerals fund to finance overseas acquisitions and technology partnerships, ensuring long-term access to essential resources.
The firm also recommended deeper global collaboration with regions such as Africa, Australia and Latin America to secure upstream access to minerals, alongside joint research and development in mineral processing and recycling. In addition, it called for incentives to promote investments in renewable energy, green hydrogen and grid-scale energy storage.
Deloitte said expanded funding for exploration, extraction and processing of key critical minerals, including lithium, cobalt and rare earth magnets, would be crucial to reduce import dependence and strengthen India’s strategic and economic security in the years ahead.
Click here to add News18 as your preferred news source on Google.
January 16, 2026, 15:02 IST
Read More
Pakistan Stock Exchange (PSX) on Friday staged a strong comeback, breaking the long bearish momentum as snowballing forex reserves have lifted investor sentiment.
During intraday trading, the PSX’s benchmark KSE-100 index gained a whopping 3,146.23 points to climb to 184,602.56 points, marking a positive change of 1.70%.
Out of 562 active companies, share prices of 375 advanced and of 67 declined while rates of 120 companies remained unchanged.
Economic analysts said the uptick offered some breathing space for the economy, even as the country continued to keep a close watch on external inflows and outflows.
Pakistan’s foreign exchange reserves inched up by $16 million over the past week, according to figures released by the State Bank of Pakistan.
The central bank said its official reserves rose from $16.0557 billion to $16.0718 billion, showing a modest gain during the week.
Overall, the country’s total reserves climbed to $21.2484 billion.
The State Bank also noted that commercial banks’ holdings went up by $5.6 million, reaching $5.1927 billion.
The central bank projects the FY26 current account deficit at 0–1% of GDP and sees reserves at $17.8 billion by June 2026 with planned official inflows.
A day earlier, the stock exchange dropped by over 1,100 points due to massive selling pressure.
The PSX had extended losses after recording an increase for a brief period as investors seemed cautious amid rising geopolitical tensions involving Iran.
During intraday trading, the KSE-100 index touched 183,717.53 due to strong buying in the early sessions before it turned bearish by losing 69.29 points to close at 182,500.52 points.
International officials have warned that US military intervention in Iran now appears likely and could take place within the next 24 hours amid sharply escalating tensions in the Middle East.
American, European and Israeli sources said preparations for possible action were under way as Washington began evacuating personnel from its major air base in Qatar.
Green energy exports: $10-bn green ammonia project positions India as global clean-fuel supplier; Kakinada plant nears key milestone – The Times of India
Budget 2026 Should Support MSMEs, Critical Minerals For Boosting Trade Resilience: Deloitte
Australia’s apparel imports fall, textiles rise in July-Nov 2025
-
Politics1 week agoUK says provided assistance in US-led tanker seizure
-
Entertainment1 week agoDoes new US food pyramid put too much steak on your plate?
-
Entertainment1 week agoWhy did Nick Reiner’s lawyer Alan Jackson withdraw from case?
-
Sports5 days agoClock is ticking for Frank at Spurs, with dwindling evidence he deserves extra time
-
Business1 week agoTrump moves to ban home purchases by institutional investors
-
Sports1 week agoPGA of America CEO steps down after one year to take care of mother and mother-in-law
-
Tech3 days agoNew Proposed Legislation Would Let Self-Driving Cars Operate in New York State
-
Business1 week agoBulls dominate as KSE-100 breaks past 186,000 mark – SUCH TV