Pakistan Daily Economy Update - 18 July

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1. July 18 , 2022 KCCI - eBulletin Eyeing $ 4Bn from friendly countries this month Pakistan is likely to get $ 4Bn from friendly countries this month to bridge a gap in foreign reserves highlighted by the IMF. The IMF had previously reached a staff-level agreement for a disbursement of $ 1.18Bn. The board is also considering adding $ 1Bn to a $ 6Bn program agreed in 2019. Finance Minister expects $ 3.5Bn from ADB, $ 2.5Bn from World Bank and $400-500Mn from AIIB in FY23. Dawn-Sun. List of Indicators Date / Period Unit Value Change Daily USD-Interbank USD-Open MKT 15-Jul PKR PKR 210.95 210.25 0.55% 0.00% WB to provide $ 200Mn to help transform agricultural sector The World Bank has approved $ 200Mn to support Pakistan in its efforts to transform its agricultural sector by adopting climate-smart technologies to improve water-use efficiency, build resilience to extreme weather events and increase income of small farmers in Punjab, through the ‘Punjab Resilient and Inclusive Agriculture Transformation’ (PRIAT) project. Dawn-Sun. 17-Jul KSE-100 index FIPI 15-Jul 15-Jul Pts. $ Mn 42,075 0.80 -0.65% NM** Crude Oil 17-Jul $/bbl 94.25 -3.42% Gold 17-Jul $/oz 1,708.7 0.30% Govt. reshaping low-cost Mera Ghar scheme The govt. is reshaping the Mera Pakistan, Mera Ghar (MPMG) low-cost housing scheme, due to the increase in interest rate up to 15% while financing was being provided at much lower rates, as stated by the Finance Minister Miftah Ismail, while assuring that that the issue will be resolved within the next week. Dawn-Sun. Gold (10g) Local 17-Jul PKR 115,400 0.00% Silver 17-Jul $/oz 18.69 0.27% Cotton(KHI)-40 kg 16-Jul PKR 15,540 -3.33% Kibor-6M 15-Jul % 15.79 -0.08% Fresh price hike threatens consumers A new wave of food inflation has emerged despite a cut in transportation charges because of a drop in diesel rates. Among others, Sindh’s flour millers raised the prices of various varieties of flour by PKR 6/kg, taking the price of flour No.2.5 to PKR 88/kg, fine and super fine flour to PKR 91/kg, and that of a 10 kg bag from PKR 785 to PKR 885. Dawn-Sun. Forex Reserves 7-Jul $ Bn 15.61 WoW -0.84% Remittances Jul-May 22 $ Bn 28.41 6.26% Exports* Jul-May 22 $ Bn 28.85 27.78% Railways, PIA cut fares by 10% In order to pass on the impact of reduced petrol and diesel prices to consumers, a 10% reduction in railway and PIA fares has been announced. The new fares would remain in force until 17th Aug’22. Dawn-Sun. Imports* Jul-May 22 $ Bn 72.18 44.28% Trade Balance* Jul-May 22 $ Bn -43.33 -57.85% Current Account Foreign Direct Inv. Jul-May 22 Jul-May 22 $ Bn $ Bn -15.20 1.60 -1184.8% -4.91% Gwadar Free Zone: Irked by rupee slide, Chinese for accounts in RMB Disturbed with frequent depreciation of the PKR, Chinese investors in Gwadar have sought permission to maintain their bank accounts in RMB in Gwadar Free Zone without converting their money into Rupees. This issue, among many others, was raised by Chairman, China Port Holding Company Limited at a meeting of Federal Steering Committee on Gwadar Initiatives held on 6th Jul’22 under the chairmanship of PM Shehbaz Sharif. BR. Failure to function under SWAPS: FBR to impose huge penalties on withholding agents FBR will impose huge penalties on withholding agents including govt. departments/private companies, who would fail to collect or deduct withholding taxes through the new Synchronized Withholding Administration and Payment System (SWAPS), under the new penalty regime applicable from 1st Jul22. BR-Sun. Pak-Iran trade at Taftan border resumes Tax-free border trade activities through Zero Point, the gate between Pakistan’s Taftan town and Mir Javeh town of Iran, were resumed on 16th Jul’22 after the trade gate reopened, which was closed almost ten days ago for Eid holidays. Dawn-Sun. Two dams inaugurated in Chagai Two newly constructed delay action dams built at the cost of PKR 324Mn were inaugurated in the Chagai district on 16th Jul’22. The PKR 80Mn East Koh-i-Sultan and the PKR 244Mn Jhulli dams were inaugurated by State Minister for Energy Mir Mohammad Hashim Notezai. Dawn-Sun. Indonesia removes palm oil export levy until Aug 31 Indonesia has scrapped its export levy for all palm oil products until 31st Aug’22 in a fresh attempt to boost exports and ease high inventories. The decision by the world’s biggest palm oil exporter could further depress prices, which have fallen by about 50% since Apr’22 to their lowest in over a year. Dawn-Sun. Utilities change electricity tariff structure from July The electricity providers have changed the electricity tariff structure in line with the rules and regulations of the federal govt. as well as Nepra, that would be effective from Jul’22 and applicable nationwide, including the service territory of the Karachi-based utility, the non-extension of relief for zero-rated industries and relief on peak-hour electricity consumption for industrial consumers. Tribune. \ Afghanistan: Pakistan to sell 120,000 metric tons of wheat to UN’s WFP YoY Jul-Mar 22 LSM Growth* % 9.40 % 12.15 Jul-Jun 22 Avg. CPI Discount Rate % 15.00 Jul-22 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful, WoW= week on week; YoY=Year on Year Major Currencies 275 265 255 245 235 225 215 205 195 185 175 165 155 145 Jul-21 GBP, 17-Jul-22, 247.5 USD, 17-Jul-22, 210.3 USD Oct-21 GBP Jan-22 EUR Apr-22 Refund of excess amount to car buyers: President rejects FBR’s application against FTO’s order President Arif Alvi has rejected a review representation made by FBR against Federal Tax Ombudsman order to refund excess amount of 4.5% sales tax charged from the purchasers of the locally-manufactured cars up to 1000cc. Declaring the FBR’s representation as illegal, President Arif Alvi has declared that there is no provision under the Federal Ombudsmen Institutional Reforms Act, 2013, for filing a review against orders of the president of Pakistan passed on any representations. BR-Sun. EDB’s policy document on solar panels this month The Engineering Development Board (EDB) is all set to submit its policy document on solar panels and allied equipment manufacturing to the govt. by the end of Jul’22. The policy document would reveal as how to promote the use of alternate energy resources to overcome power shortages in the country. BR. NTDC acquires land for construction of grid station in Chakwal National Transmission and Despatch Company Limited (NTDC) has acquired 758 Canal and 3 Marla land for the construction of 500 kV grid station Chakwal, for helping in the development of industries. Construction of Two 500 kV transmission lines from Ghazi Brotha - Gatti and Gakkar – Rawat will also be part of this project. Total estimated cost of the project is PKR 8926.39Mn including 43.76Mn Euros promised by KfW, German bank. BR. PIA resumes Beijing-Islamabad flights PIA resumed its passenger flights on Beijing-Islamabad route after a gap of nearly seven months when PK-855 took off from Capital International Airport for Islamabad on 17th Jul’22. PIA had operated its last flight between Beijing-Islamabad on 19th Dec’21. BR. Weak economic growth likely in 2022: survey Weak growth looks the most likely outcome for the rest of 2022, according to the Q2 Global Economic Conditions Survey (GECS) from ACCA (the Association of Chartered Certified Accountants) and IMA (Institute of Management Accountants). It pointed to a decisive deterioration in the global economic outlook due to the effects of war in Ukraine and the surge in inflation across much of the world. BR-Sun. Jul-22 Source: KCCI Research Quote of the Day “Many of life's failures are people who did not realize how close they were to success when gave up.” Thomas Edison The federal govt. has decided to sell 120,000 MT of wheat to UN World Food Program (WFP) for Afghanistan at full import cost in US$ instead of PKR. BR-Sun. Transmission services: China’s PMLTC agitates against imposition of 17% GST Chinese Company Pak Matiari-Lahore Transmission Company (PMLTC) has been agitated on imposition of 17% GST on transmission service charges. CEO/President of the company, Zhang Li, has declared that the amendments would have severe financial implications on Pak MatiariLahore Transmission Company (Private) Limited. BR-Sun. EUR, 17-Jul-22, 208.3 Pakistan's Top 10 Export Commodities in 11M-FY22 ($ Mn) Made-up Textile Articles 5,149.3 Kintted Articles of Apparel 4,390.2 Not-Knitted Articles of Apparel 3,306.3 Cotton 3,210.0 Cereals 2,632.2 Copper and Articles 779.4 Articles of Leather 678.0 Salt, Earth', Lime and Stone 460.1 Optical and Medical Inst. 457.2 Beverages, Spirits and Vinegar 434.9 0 2000 4000 6000 Source: KCCI Research; SBP Note If any member is facing any issues pertaining to PakistanAfghanistan investment and trade policies or has project proposals is requested to share the information at secretary@kcci.com.pk for forwarding to the Board of Investment.