KARACHI, Dec 1: The State Bank of Pakistan’s annual report for 2005-06 is being released with considerable delay on Saturday at a press conference by SBP Governor Dr Shamshad Akhtar.

Under the amended State Bank Act 1956, the central bank is expected to report on the performance of national economy after every three months for presentation to the parliament. The annual report normally comes out by late September or early October but has been delayed rather inordinately because of changes on the board of directors.

The last report of the State Bank was on economic performance during third quarter of 2005-06 (January to March 2006), which was released in June after presentation of the current fiscal year’s budget. The last SBP report of the third quarter had advised the government on “corrective policy measures to protect long-term growth prospects of the economy.”

The report is being released when trade imbalance in July-October 2006 has gone beyond $4 billion figure bringing the Pakistani rupee value under strain. Export houses now want a straight 10 to 12 per cent devaluation in Pakistani rupee.

The international oil prices have come down by about 25 per cent but the government is not ready to pass on the relief to the consumers. Besides other things, the high fuel tariff is contributing to the high cost of production.

Textile exports in last four months (July to October 2006) are down by more than 9 per cent on a year-to-year basis and industry leaders have started warning of closure of one million spindles by June next if no corrective measures are taken.

The import of textile machinery is sliding down and the industry expects a total import of hardly $450 million this full year from about $1 billion’s peak a few years ago.

“Interest rates are high and dollar is costlier in kerb,” replied a top textile operator, who fears that if the current trend is not reversed then, perhaps, the industry will not be in a position to import machinery and equipment, which is bare necessary for repair and maintenance. The private sector demand for bank credit is diminishing with every passing day but the government’s appetite for public funds is showing no respite. Its bank borrowing is on high side and is now desperately offering national assets to the foreign investors to tie over the wide gaps in foreign exchange sector.

In agriculture, cotton production is below official target of 14.8 million bales and sugarcane growers are locked in an apparently unending

battle with the millers. This is bound to make the sugar taste bitter for 160 million consumers of Pakistan. A good rice crop has also failed to give a fair return to farmers.

How the graduate legislators of Pakistan will read the SBP annual report of 2005-06 can be anticipated from what they did in the past with these reports. There had hardly been any session of National Assembly or of Senate devoted to debate the SBP report.

But the public at large expects the central bank to offer an analysis of the emerging economic and financial environment that should provide some guidelines to the government.