Pakistan Daily Economy Update - 18 January

Transcription

1. January 18 , 2020 KCCI - eBulletin Post-Brexit: Pak-UK ties can advance to new level: envoy The relationship between Pakistan and the UK can be taken to the next stage by taking advantage of forthcoming Brexit, said British Deputy High Commissioner, Mike Nithavrianakis, during a visit to KCCI. He said that both countries have been enjoying warm and conducive partnership and UK’s departure from the EU, due to happen on 31st Jan’20, gives an opportunity to do that. He stated that Pakistan is an emerging frontier market that deserved greater attention, hence, the Department for International Trade (DIT) is increasing its resources for Pakistan. He said that 5,000 British companies are operating in UAE, very few of which are doing business in Pakistan. During the meeting, former KCCI president, Siraj Kassam Teli, said that it is heartening to see that over 60 British companies have invested in Pakistan and are successfully running their businesses. Tribune. Economic Indicators List of Indicators Date / Period Unit Value Change Daily PKR PKR 154.98 154.80 0.20% -0.03% 43,168 -0.64 0.24% NM** USD-Interbank USD-Open MKT 17-Jan KSE-100 index FIPI Pts. $ Mn $/bbl 58.62 0.96% $/oz 1,552.9 -0.21% 17-Jan Crude (AP'19) 17-Jan 17-Jan 16-Jan New tax laws: FBR explains GST/FED-related amendments The govt. has imposed penalties and punitive actions for not printing retail price with sales tax on retail items and bringing exempted goods from tax-exempt areas of AJK, Gilgit-Baltistan and erstwhile tribal areas into tariff areas, while 3% value addition tax on import of plant/machinery and equipment imported by a manufacturer for in-house installation/use has also been withdrawn. In view of higher tariff rates of electricity, the conditions to qualify for a Tier-1 retailer have been amended so as to increase threshold of electricity consumption from PKR 600,000 to PKR 1200,000. BR. Gold (MA'19) 16-Jan Gold (10g) Local 17-Jan PKR 76,560 -0.22% Silver (MA'19) 16-Jan $/oz 17.91 -0.32% Cotton(KHI)-40 kg 17-Jan PKR 9,645 0.00% Kibor-6M 17-Jan % 13.49 0.00% FBR officers want chairman from IRS, Customs Group FBR officers have proposed to the govt. that their Chairman should be appointed from the Inland Revenue Service (IRS) and Customs groups. There has been increasing resentment within FBR ranks that the chairman has been appointed from outside the FBR ranks and in recent history either the chairman belonged to the DMG group or hired on contract from the private sector. The News. Forex Reserves 10-Jan FY20 $ Bn 18.12 WoW 0.21% Remittances Jul-Dec 19 $ Bn 11.39 3.31% Exports* Jul-Dec 19 $ Bn 11.54 3.17% WHT collection slips 29% as return filing soars Collection of WHT from non-cash banking transactions fell 29% to PKR 3.7Bn during 1HFY20 as compared to PKR 5.21Bn in 1HFY19 as income tax return filing reached record high. The govt. had introduced the WHT provision under which 0.6% withholding tax was imposed only on non-filers of income tax returns on aggregate transactions of PKR 50,000 per day. The income tax return filing increased to a record high of 2.76Mn for TY18 by 12thJan’20. The News. Imports* Jul-Dec 19 $ Bn 23.16 -17.13% Trade Balance* Jul-Dec 19 $ Bn -11.63 30.67% -2.15 1.34 75.01% 68.25% Fraud risk management: SBP realigns reporting SBP has announced realignment of reporting on fraud risk management. According to SBP, regulatory reporting & monitoring function of frauds, forgeries & dacoities data of banks, DFIs and MFBs has been transferred to Off-site Supervision & Enforcement Department (OSED) from Banking Policy & Regulations Department (BPRD) of SBP. BR. YoY Jul-Dec 19 $ Bn $ Bn Jul-Dec 19 Jul-Nov 19 LSM Growth* % % Jul-Nov 19 Avg. CPI Discount Rate % Nov-19 WoW= week, NCCPL, KSE, Sources: KCCI Research, PMEX ** Not Meaningful on week; Current Account Foreign Direct Inv. -5.93 10.80 13.25 SBP, PBS* Major Currencies FATF-related bill passed by Senate body The Senate Standing Committee on Interior has passed Mutual Legal Assistance (Criminal Matters) Bill, 2020 which will help get information about foreign assets and bank accounts of Pakistani citizens as well as pave way for Pakistan to phase out from grey list of FATF. The bill is a requirement of FATF which is necessary to be fulfilled as the next meeting of FATF is scheduled to be held on 20th Jan’20. BR. Kinnow quota: Exporters concerned at delay in announcement by Indonesia Exporters have expressed concern over the delay in the announcement of kinnow import quota by Indonesian govt. for Pakistan. Generally, quota for import of Pakistani kinnow is issued every year in the first week of January by Indonesian govt.; however, this year no quota has been announced by Indonesia. They also requested the Indonesian govt. to abolish quota system for Pakistan as the country is importing Indonesian palm oil without any quota restriction. BR. 215 GBP, 17-Jan-20, 202.1 205 195 185 175 EUR, 17-Jan-20, 172.1 165 155 USD, 17-Jan-20, 154.7 145 135 125 1H C/A deficit narrows down 75% YoY Jan-19 Pakistan’s current account deficit (CAD) narrowed down by 75% or $ 6.46Bn to $ 2.15Bn in 1HFY20 compared to $ 8.61Bn in 1HFY19. The USD improvement in external account has come from a mass reduction in country's goods import bill which fell 18% to $ 22.2Bn. However, exports have yet to contribute significantly as exports growth is very nominal. The SBP believes that CAD is expected to improve due to more-than-expected contraction in imports. BR. Foreign investment in treasury bills reaches record $ 2.2Bn Pakistan received a record foreign investment of $ 2.23Bn in T-bills during FY20 (till date). The latest T-bills auction held on 15th Jan’20 yielded $ 537.9Mn — the highest amount for a single auction. The govt. received PKR 1.1Tn, but raised PKR 274Bn in T-bills during the auction. Over 95% investment in T-bills came from the UK ($ 536.7Mn) and US ($ 80.2Mn). Dawn. \ Apr-19 GBP Oct-19 Jan-20 Source: KCCI Research ; Oanda.com Quote of the Day "Timing, perseverance and ten years of trying will eventually make you look like an overnight success." Big industry output shrinks 4.61% for eighth month Pakistan’s LSM sector shrank for 8th month in row, raising fears of layoffs across the industrial sector. The LSM index contracted by 4.61% year-on-year in Nov’19. In 5MFY20, the big industry output declined 5.93% on a yearly basis. At a time when LSM is on a downward trajectory, the Commerce Division has notified second phase of reduction in tariffs under FTA to boost exports to China. The latest monthly decrease was mainly led by a 44.94% plunge in electronic goods, 44.67% in automobile, 19.04% engineering products and 8.74% iron and steel. Dawn. Biz Stone Sector-wise LSM Growth (%) Privatization matters: Foreign investors express interest in LNG plants Pakistan has managed to secure broad-based interest in the privatization of multibillion-dollar LNG-fired power plants as a dozen global and local companies, including a military-backed local consortium, have shown interest. As China and Saudi Arabia have stayed away from the process, non-traditional investors from Japan, Thailand, UK and Malaysia have come forward and submitted statements of qualification. The Privatization Commission had floated Expressions of Interest (EOI) in Nov’19, inviting investors for acquisition of nearly 2,500MW 2 power plants, fueled by Qatar’s LNG. The govt. wants to sell National Power Parks Management Company Limited (NPPMCL) in the hope of fetching a minimum of PKR 300Bn or $ 1.5Bn in non-tax revenue. Tribune. Global economy anemic and incomes likely to suffer, UN says The UN has said that people in a number of countries, mostly in Latin America and sub-Saharan Africa, will see their incomes stagnate or decline in 2020. A decade after the financial crisis, the global economy remains sluggish, and trade and geopolitical tensions could further derail recovery. The world economy expanded by just 2.3% in 2019, its slowest pace in a decade, and could grow by 2.5% in 2020 if downside risks are kept at bay. The UN expects growth to remain anemic in most advanced economies, including United States. Japan may do better, because of Olympics, Kozul-Wright, it said. Daily Times. Jul-19 EUR 5.87% 8.04% 16.57% 1.46% 0.27% 2.55% Fertilizers Engineering Products -0.16% Textile -6.57% Food,Beverage & Tobacco -1.92% Chemicals -5.46% Electronics -16.22% -8.22% -37.75% -60% -40% 37.94% Pharmaceuticals -8.38% -0.12% Automobiles -20% 0% 20% 40% 60% 5MFY19 5MFY20 From next fiscal 2020-21: Pak economy to recover if IMF reforms implemented, says UN The UN, in its World Economic Situation and Prospects report, projects Pakistan’s economy to grow by an estimated 3.3% in FY20 and then slip to 2.1% in FY21, while India and Bangladesh are expected to grow by 5.7% and 8.1% in FY20 and then rise to 6.6% and 7.8% Source: KCCI Research; PBS respectively in FY21. In Pakistan, the economy is expected to recover slightly from 2021 onward. The report states that high inflation and security concerns have hurt domestic demand and private investment, and the Govt.’s ability to address the slowdown has been severely Disclaimer curtailed by the fiscal tightening. The News. This report has been prepared by KCCI Research & Development Cell. The information contained herein have been compiled or arrived at based upon Nepra grants generation tariff for two 150MW solar power projects information obtained from sources believed to be reliable and in good faith. NEPRA has granted generation tariff of PKR 5.8/kwh each for 2 solar-based power projects with a cumulative capacity of 150MW. The Such information has not been independently verified. govt. had decided to procure renewable energy through competitive bidding, therefore, it maintained that cost plus tariffs should be icon represents the sole viewpoint of the KCCI R&D Cell, and is avoided, as competitive bidding would reduce the overall basket price of electricity. The News. stated to enrich the readers' understanding of the news item. The