Pakistan Daily Economy Update - 19 January

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1. Jan 19 , 2021 KCCI - eBulletin Domestic debt, liabilities reach PKR 24.64Tn The federal govt.'s domestic debt and liabilities continued to surge reaching PKR 24.64Tn in Nov’20 due to massive borrowing for financing of fiscal deficit. SBP reported that the govt.'s overall stocks of domestic debt and liabilities posted an increase of 3.2% in 5MFY21. BR. FDI declines 29% in H1FY21 Foreign Direct Investment (FDI) in Pakistan fell 29% during 1HFY21. Overall FDI amounting to $ 952.6Mn recorded in 1HFY21 compared to $ 1.357Bn in 1HFY20, depicting a decline of $ 405Mn. During the period, FDI inflows were $ 1.535Bn as against $ 582.8Mn outflow. BR. Pakistan asked to remove dumping duty on BOPP A panel of the Dispute Settlement Body (DSB) of the Geneva-based World Trade Organization has asked Pakistan to withdraw antidumping duty on import of biaxially oriented polypropylene (BOPP) film, which is used in food packaging, from the UAE. The panel was established by the DSB on the request of UAE on 7th May’19 following an agreement reached between the two countries. The panel, however, declined to entertain the request of UAE that Pakistan refund the anti-dumping duty already paid. Dawn. Tax officers deputed at all sugar mills, FBR tells SAB FBR has informed the Sugar Advisory Board (SAB) that it has deputed tax officers in all sugar mills for monitoring the production and clearance of the commodity from the mills to ensure accurate payment of taxes including sales tax. The representative of the FBR denied the stance of the chairman of the sugar mills association that the FBR is victimising the sugar mills. BR. ‘FBR mulls unifying various taxes’ Member Inland Revenue FBR Ashfaq Ahmed said the apex tax authority is working on merging all the taxes in one tax with simplification of procedures. He said that the tax rates and collection procedures are decided by the parliament and they have no authority to change it without the consent of the parliament but we can recommend the parliament to modify the procedures. The News. FBR plans orientation program A technical committee of FBR has planned an orientation program for the manufacturers and exporters in filing their stock position for speedy clearance of the sales tax refunds. The committee is organizing a workshop/webinar for the orientation of the SME manufacturers-cum-exporters and commercial exporters and tax consultants regarding FASTER and procedure of filing Annexure–H on 20th Jan’21. The taxpayers are facing difficulties in claiming refunds under FASTER due to the problems in filing Annexure-H. The News. Economic Indicators List of Indicators Date / Period 18-Jan PKR PKR 160.52 160.48 0.12% 0.14% KSE-100 index FIPI 18-Jan 18-Jan Pts. $ Mn 45,727 4.73 -0.44% NM** Crude (AP'19) 18-Jan $/bbl 52.28 -0.15% Gold (MA'19) 18-Jan $/oz 1,837.3 0.40% Gold (10g) Local 18-Jan PKR 96,493 1.03% Silver (MA'19) 18-Jan $/oz 25.17 1.22% Cotton(KHI)-40 kg 18-Jan PKR 11,467 0.00% Kibor-6M 18-Jan % 7.35 0.00% 8-Jan $ Bn 20.52 WoW 0.03% Remittances Jul-Dec 20 $ Bn 14.20 24.89% Exports* Jul-Dec 20 $ Bn 12.10 4.98% Imports* Jul-Dec 20 $ Bn 24.52 5.72% Trade Balance* Jul-Dec 20 $ Bn -12.42 -6.44% Current Account Foreign Direct Inv. Jul-Nov 20 Jul-Dec 20 $ Bn $ Bn 1.64 0.95 193.98% -29.82% Forex Reserves YoY Jul-Nov 20 LSM Growth* % 7.41 % 8.63 Jul-Dec 20 Avg. CPI Discount Rate % 7.00 Jul-20 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful, WoW= week on week; YoY=Year on Year Major Currencies 235 Pakistan Prosperity Index reaches all-time high of 116.3 in Nov 2020: Report Policy Research Institute of Market Economy (PRIME) has released a report that stated that Pakistan Prosperity Index continues to pose an upward trend, reaching an all-time high of 116.3 in Nov’20. The new figure of PPI signals not just economic recovery but also provides a reason for optimism. Despite inflationary pressure and second wave of COVID-19, over a 12-month period improvements in trade volume and output of LSM coupled with a modest increase in private sector lending has resulted in an uptick in economic prosperity. The Nation. 185 GBP, 18-Jan-21, 218.1 215 205 195 EUR, 18-Jan-21, 194.1 175 165 155 145 USD Jan-20 GBP Apr-20 Rental power dispute settlement: Reward for those who helped country save $ 1.2Bn The federal govt. has reportedly decided to pay a reward of PKR 2Mn to each member of the Core Committee, except the officer who represented the Power Division, for unearthing corruption in M/s Karkey Rental Power Project which led to a saving of $ 1.2Bn. BR. Amid LNG availability crisis: Petroleum Division asked to restart JJVL LPG extraction plant Jamshoro Joint Venture Limited (JJVL) has asked the Petroleum Division to comply with the ECC decision by letting its LPG extraction plant resume operation. Once JJVL’s LPG extraction plants comes on stream, it will start catering to the energy needs of over 750,000 homes across Pakistan. The News. Body formed to examine gas supply chain Amid growing number of suppliers competing for pipeline and terminal capacity, the Cabinet Committee on Energy (CCoE) has constituted a subcommittee to examine in detail the availability of pipeline capacity and how to allocate it for transportation of RLNG. The subcommittee led by Minister for Planning Asad Umar, will examine the entire natural gas/LNG supply chain and firm up within 10 days a holistic way forward on the issue. Dawn. Ginners lament govt’s lack of focus on cotton production Raising an alarm on the drastic drop in cotton production this season, Cotton Ginners have demanded the govt. to take emergency measures to improve cotton yield to curtail losses worth Billions and to safeguard livelihoods. They said that the country was “facing a direct loss of $ 2Bn annually and $ 8Bn indirectly due to the drop in cotton production. Pakistan’s cotton yield had dropped to only 5.5Mn bales from 15Mn bales and the drop was affecting growers, ginners, spinning and viewing industry, as well as the country’s textile export industry. The News. First investment policy of Balochistan introduced pThe CEO of Balochistan Board of Investment and Trade, Farman Zarkoon, has said that an investment policy had been introduced for the first time in Balochistan. An attractive environment had been provided to investors in Gwadar Free Zone. The investment policy had allowed tax exemptions for 23 years, 100% exemption from customs duties for construction and operations, land lease for 99 years, flexibility in visa rules, offices and infrastructure of international standard and security arrangements, while small industrial units and warehouses were ready for use. Dawn. Change Daily 18-Jan 225 Pakistan approves Sinopharm corona vaccine for emergency use Pakistan has authorized emergency use of Chinese firm Sinopharm's anti-coronavirus vaccine as the country grapples with a second wave of infections. This approval allows federal and provincial govt.’s as well as the private sector to import the vaccine from China. The News. Value USD-Interbank USD-Open MKT Tax managers seek cut in annual revenue target Tax managers have proposed the govt. to revise down revenue target by at least PKR 250Bn for FY21, considering the downbeat collection during 1HFY21 and fast clearance of refunds to support businesses hit by lockdown. FBR has collected PKR 2.2Tn during 1HFY21 and it needs to collect PKR 2.7Tn in 2HFY21 to achieve the target. The News. ADP 2021-22 to be prepared in line with prevalent economic policies Sindh govt. under its guidelines for the next Annual Development Programme (ADP) has instructed that any new scheme costing up to PKR 100Mn should be given financing in two years to complete a maximum number of schemes. ADP 2021-22 will be prepared in line \ with prevalent economic policies, strategies of the govt. and broad guidelines given by the federal govt. on preparation of PSDP 202122. BR. Unit EUR Jul-20 USD, 18-Jan-21, 160.8 Source: KCCI Research ; Oanda.com Oct-20 Jan-21 Quote of the Day “Fortune favors the brave.” Terence Top 10 Global Powers Ranked by Potential Military Strength 2021 Ranking Pakistan has 1.2Mn (est.) total military personnel 0.07 0.08 0.09 US (1st) Russia (2nd) China (3rd) 0.12 India (4th) 0.14 0.16 0.17 Japan (5th) South Korea (6th) France (7th) 0.20 0.20 0.21 UK (8th) Brazil (9th) Pakistan (10th) 0.00 0.05 0.10 0.15 0.20 0.25 *Ranking out of 138 Countries *PowerIndex score categories ranging from military might and financials to logistical capability and geography. Source: KCCI Research, Global firepower Disclaimer This report has been prepared by KCCI Research & Development Cell. The information contained herein have been compiled or arrived at based upon information obtained from sources believed to be reliable and in good faith. Such information has not been independently verified.