Spiral hike: Inflation bounces back, in double digits again

CPI rises 10.9% on excessive currency printing, rise in prices of commodities. PHOTO: FILE

ISLAMABAD: 

Inflation in Pakistan bounced back to double digits after a gap of 16 months and hit 10.9% in November despite apprehensions about keeping the figure at a lower level, highlighting the impact of excessive currency note printing and rise in prices of commodities and utilities.

Data released on Monday by the Pakistan Bureau of Statistics (PBS) – the national data collecting agency – showed that the Consumer Price Index (CPI) had been continuously rising and stood at 10.9% in November over the same period of last year.

This is a steep rise of 1.8 percentage points compared to 9.1% in October that has pushed the index into double digits, pointing to the underlying inflationary pressures due to increase in prices of utilities and other essential items.

Last time, inflation had been recorded in double digits at 11.3% in June 2012 and after that the indicator had started decelerating. In June 2013, when the PML-N took reins of the government, inflation was registered at 5.9% that almost doubled in just five months.

“Excessive printing of money, rise in wheat prices that serve as a benchmark for all food items, increase in general sales tax rate and revision in tariffs of electricity pushed inflation into double digits,” said Dr Ashfaque Hasan Khan, Dean of Business School of National University of Science and Technology.

He said during 131 days of the new government, the State Bank of Pakistan printed Rs751 billion worth of fresh notes – an average of Rs5.73 billion a day and Rs239 million per hour.

According to the SBP, in November tomato prices soared 216% over the same month of last year. Potato prices rose 117%, onions 72%, fresh vegetables 31.6%, wheat 27.4%, wheat flour 26.5% and wheat products 21.3%.

On average, there was over 43% increase in prices of perishable food items while clothing and footwear group’s rates rose 14%.

In a recently concluded first review of the IMF programme, the lender kept its inflation projection unchanged at 7.9% for the current fiscal year 2013-14 and asked the government to increase interest rates to control inflation – a strategy that experts say will further fuel inflation.

The IMF has come under criticism for preparing a “faulty” design of the $6.7 billion loan programme as every noted economist is opposing the design.

The PBS data showed that electricity prices for domestic consumers increased 15.82% in November over a year ago – a figure far lower than the increase that the government passed on to the end consumers to recover the cost of electricity. The Ministry of Finance has estimated the average increase at over 30%.

Despite a pledge to shield the low-income group from price escalation, the government has increased electricity prices by 40% for those who use less than 200 units a month. However, this is not reflected in the PBS statistics.

The PBS has been facing a hard time, as users of its data always question the authenticity of official numbers.

Despite suppressing the figures, the commodity group of housing, water, electricity, gas and fuels recorded an increase of 9.6% in November over the comparative period of last year, according to the PBS. The group’s weight in the CPI basket is about 29.4%.

For the current fiscal year, the government has set the inflation target at 8%. But independent economists believe that the figure will touch 12% because of the administrative and monetary measures taken by the government.

Average inflation in the first five months of the current fiscal year (July-November) stood at 8.84%. Non-fuel and non-food inflation, called core inflation, was 8.5% in November.

Iceland’s first-ever police shooting leaves one dead

A man has been shot dead in Iceland's first-ever armed police operation, officials said on Monday.

With a population of only 322,000 and one of the lowest crime rates in the world, police rarely draw their weapons in the island nation.

The incident was "without precedent" in Iceland's history, national police chief Haraldur Johannessen told a press conference in Reykjavik.

The victim, a man in his late 50s, fired a shotgun several times in his apartment in the early hours of Monday morning, forcing police to evacuate residents of the building in east Reykjavik.

When they failed to make contact with him the police then fired gas canisters through his windows in an attempt to immobilise him.

"That did not work and the man started shooting out of the windows of the apartment," said Reykjavik police chief Stefan Eiriksson.

A police swat team then entered the apartment.

One officer was hit in the helmet and the other on a shield but neither were injured.

When they returned fire the man was fatally injured and later died in hospital.

"The police regrets this incident and wishes to extend its condolences to the man's family," said national police chief Johannessen.

An investigation has been opened to determine why the victim began shooting and whether he was under the influence of drugs or alcoho

Land Sterling International announces launch of new office in KSA after UK and UAE.

Riyadh, December 3, 2013: Land Sterling Property Consultants and Chartered Surveyors, one of the leading real estate advisory firms in the region, today announced the opening of its new office in Riyadh, expanding its presence and footprint across the MENA region. 

With over 30 years of combined experience in the real estate sector, Land Sterling has developed its significant regional expertise in property valuations, plant and machinery valuations, property condition surveys, investment consultancy, market research and feasibility studies as well as estate management by undertaking extensive projects under reputable clients across the region.

Managed by qualified members from the Royal Institution of Chartered Surveyors (RICS) from the UK, Land Sterling provides independent commercial and residential valuation expertise across the MENA region for banks, property developers, accountancy firms and groups of companies.

The opening of a new office in Riyadh is in line with Land Sterling’s aim to better serve its KSA clients through enhanced project engagement and execution. We have focused on hiring and training Saudi valuers whether they are new into the profession or have experience. We also have a full program to train graduates with degrees in similar fields to real estate.

In view of the market, over the last few years, KSA’s property sector has emerged as most promising in the GCC region. “With over US$80 billion of planned investments over the next few years, KSA will witness a manifold growth in property developments, infrastructure growth and commercial/retail opportunities. With the current pace of growth, KSA presents the biggest opportunity for business growth in the region especially in construction and infrastructure,” feels Mr. Youcef Betraoui, CEO Land Sterling. “I am also very excited to be working in collaboration with the Saudi Authority for Accredited Valuers, KSA’s valuation regulatory body, in providing valuation training as a step towards enhancing and improving valuation standards in the Kingdom”.

In order to address your needs better, we will be available at Stand G01, Cityscape Riyadh taking place on 10-12 December 2013 in Riyadh Exhibition Centre, Al Olaya Road, Riyadh. We will be pleased to answer your questions about our services during the exhibition. In addition, Mr. Youcef is one of the speakers at the event and will cover the topic of “the impact of infrastructure projects on property and land prices across the Kingdom”.

Siemens bribery case spreads to Brazilian politics

In May this year, German engineering firm Siemens reported itself to Brazilian law enforcement authorities. It unveiled its involvement in a price-fixing cartel, and admitted to paying bribes in order to win contracts to build the Sao Paolo Metro.

At the centre of the scandal was Siemens' former senior representative in Brazil, Adilson Primo, who was sacked in October 2011 when evidence first emerged of his wrongdoing in the South American country.

Brazilian daily newspaper O Estado de Sao Paulo reported on Sunday (01.12.2013) that a Sao Paulo court had ordered Primo to disclose financial transactions on a business account he owns. The court is reportedly trying to locate six million euros ($8.1 million) which were allegedly paid as bribes.

Political dynamite

The disclosure of money flows on Primo's account has the potential to cause considerable upset in Brazilian politics. It has already unleashed a fierce dispute between the ruling leftist labor party, PT, and the country's largest opposition force, the Social Democratic PSDB, which rules in the federal state of Sao Paulo.

Both parties accuse each other of having received kickbacks in connection with the Sao Paulo metro tender. According to media reports, police in Brazil's second largest city obtained two documents incriminating senior PSDB leaders. The documents were allegedly presented by another former Siemens manager, Everton Rheinheimer, who left the German firm in 2007 and who is presumed to be collaborating with the authorities.

Rheinheimer's documents reportedly unveil payments to PSDB leaders in Sao Paulo, also in connection with a railway cartel involving Siemens, French conglomerate Alstom, and Spain's CAF group, as well as Mitsui of Japan and Bombardier from Canada.

However, the PSDB leaders rejected the accusations, Brazilian media reported, and even Rheinheimer himself said he hadn't disclosed any documents whatsoever.

Trial to hit election campaigns

Meanwhile, a date for the corruption trial against Siemens and other firms has been set for next year. According to daily newspaper Folha de Sao Paulo, the investigation by Brazil's antitrust regulator CADE took longer than expected, with the result that the trial would coincide with presidential elections in the country.

In May 2013, Siemens struck a deal with CADE to avoid criminal proceedings for its involvement in a cartel when bidding for the construction, fitting and maintenance of metro trains in Sao Paulo and Brasilia. The German firm revealed that five global engineering firms colluded to raise bids to 20 percent higher than quotes typically found on the market.

Evidence had already emerged in 2008 that Siemens representatives in Brazil had paid millions in bribes to win public tenders. And just two years earlier, in 2006, Siemens was involved in the biggest corruption scandal in German corporate history, when it was fined 201 million euros for engineering a global system of kickbacks. The entire board of the company resigned over the scanda

German auto market crumbles in 2013, but carmakers shine on overseas demand

Domestic car sales were expected to drop by 5 percent in 2013 to reach their lowest levels in three years, the German Automotive Industry Federation VDA said Tuesday.

Projected 2013 sales of about 2.93 million vehicles were unsatisfactory VDA President Matthias Wissmann said at the lobby group's annual news conference. He attributed the second consecutive annual decline to the eurozone crisis, which was still affecting German consumers.

Wissmann also noted, however, that the slow stabilization of the German market was continuing. Expressing confidence about 2014, Wissmann said new car sales would again surpass 3 million next year.

Surprisingly, the slump in their home market doesn't affect the sales of German carmakers. According to VDA figures, the country's auto manufacturers are expected to sell 14.2 million cars worldwide, of which about 5.5 million will be made in Germany.

The rise of 3.5 percent was caused by strong demand in overseas markets, notably those in the United States and China, VDA said. In 2014, German carmakers were expected to sell about 14.7 million vehicles, the group added.

Meanwhile, German luxury carmakers Audi and Daimler have announced plans to shorten end-of-year holidays for their workers and to introduce extra shifts to meet high demand. The Munich-based automaker BMW also announced that its factories were running at 120 percent capacity, and that additional shifts were likely to be introduced next year.

Deutsche Börse and Bank of China announce strategic partnership

Deutsche Börse and Bank of China have signed a memorandum of understanding for establishing a preferred partnership, the German stock market operator announced on Monday.

The strategic cooperation agreement is aimed at providing products and services to foster cross-border business between China and the European Union, Deutsche Börse said.

'Our agreement marks an important step toward bringing the European and Chinese markets closer together,' Deutsche Börse Chief Executive Reto Francioni said.

The partnership is part of Deutsche Börse's efforts to boost its business in Asia where the German stock market operator garnered just 5 percent of its total revenues last year. By providing easier access for Chinese players to Deutsche Börse markets and products, Francioni hopes to increase Asian sales by about 100 million euros ($135 million) over the next five years.

Part of the initiative is also to be the development of an offshore market in Europe for the Chinese currency, Renminbi. Moreover, Deutsche Börse and Bank of China are to assist each other in investor education and business development, the memorandum said.

'In the light of continuous fast internationalization of the RMB [Renminbi], the building-up of a strategic cooperation between both parties will lead to a win-win situation,' said Bank of China Chairman Tian Guoli

How to use Facebook for a small business

Company’s head of Middle East, Africa and Pakistan, Jonathan Labin, shares his top five tips.

1. Spruce up your page

A little bit of housekeeping on your page can add lots of value. Make sure that your hours of business and contact information are all up to date. It’s also a good idea to update your page’s cover photo with holiday- or small business-themed images. These little steps let visitors know that your page is an active extension of your business.

2. Post regularly

A steady rhythm of posts in the days before a big event can keep your business top-of-mind to customers. Be sure to highlight your best merchandise, but don’t restrict yourself to just self-promotional posts. Also, consider posting content that gives people some kind of extra value. For instance, you can highlight other great businesses nearby or share interesting content that relates to your business.

3. Create photo and video posts

Posting great photo or video content is an easy way to make your business come alive on Facebook. Photo or video posts generally have good levels of engagement. For small businesses, another idea is to create a photo album with images of products that people can preview before coming into the shop.

4. Try a Facebook Offers

Posting special offers or discounts is a great way of offering customers even more value. You can offer start by providing a discount to people that mention Facebook when they come into your shop. Or, if you’re looking for more reach, Facebook Offers makes it easy for you to distribute your promotions to an audience beyond your fan base. It make it easy for people to redeem your offers too – when people click to claim your offer, they get an email reminder containing all of the necessary details on how to redeem it.

5. Boost your important posts

Boosted Posts can help you reach wider audiences with greater accuracy. Simply enter whatever amount you can set aside for the promotion and Facebook will tell you instantly how many people your post will reach. With the targeting features built into Boosted Posts, you can make sure that the right people are seeing your content.

For instance, you can direct your posts towards people who live nearby. It can be a great way of reaching people, even when they’re out and about. Just remember that if you want to boost a post containing an image, the picture cannot contain more than 20 per cent text.