Pakistan Daily Economy Update - 26 April

Transcription

1. Apr . 26, 2018 KCCI - eBulletin FAP to fix dollar rate on daily basis In order to control the volatile exchange rate in open currency market, the Forex Association of Pakistan (FAP) has decided to fix the US dollar rate on a daily basis. An emergent meeting of exchange companies was held to discuss the exchange rate issues where they unanimously decided that FAP will fix and release dollar trading rates 3 times a day to facilitate exchange companies. First exchange rate will be issued at 10:00AM, second rate at 2:00PM and third rate will be fixed at 4:00PM and will be forwarded to exchange companies through email. For today (26th Apr) a dollar exchange rate has been fixed at PKR 118.70 (selling) and PKR 118.40 (buying); accordingly all exchange companies have been directed to strictly follow these rates. In case of violation, in the first instance the exchange company will be penalized; if found repeated, the case will be referred to the SBP. BR. Rupee sinks further in open market The rupee found no place to stay against the greenback in the open market on Wednesday (25th Apr) as the dollar attracted a record high price of PKR 119.50. The development comes only days after the SBP held an emergency meeting with exchange companies after a similar downward move, urging their heads to do more to arrange supply of dollars in the open market. In the past, the SBP had been supplying greenback in the open market to support the PKR. Now it is asking the exchange companies to bring down the rates while applying no pressure to strengthen the PKR. Dawn. Fiscal deficit, other targets missed PM’s Advisor on Finance, Miftah Ismail, is to unveil Economic Survey 2017-18 today (26th Apr), according to which the govt. has missed all major economic targets including growth and fiscal deficit for the 5th consecutive financial year of its tenure. Against a target of increase in real GDP growth of 6%, growth has been recorded at 5.8% for outgoing FY18 whereas investment to GDP has been estimated at 16.4% against the target of 17%. The utilization of federal development budget is expected to be around PKR 800Bn against the allocation of PKR 1.001Tn. Budget deficit is projected to cross 5.5% for FY18 against the target of 4.3% of GDP while foreign exchange reserves presently only cover three months of imports. Net public debt to GDP ratio was projected to be below 60% of GDP, however, it has increased to 69% of GDP with total domestic debt increasing to PKR 15.9Tn and foreign debt to touch $ 93Bn by Jun’18. Exports under STPF were targeted at $ 35Bn but these are to remain below $ 25Bn, lower than $ 25Bn the present govt. inherited in 2013 when it came to power. FBR revenue growth was targeted to increase by 14%, however it will remain around 11.3%. BR. Govt. scrambles for consensus as provinces baulk at PSDP allocations Struck by the intensity of protests mounted by the CMs of Sindh, KP and Balochistan, the federal govt. has moved to assuage their stance. In this respect, a press conference to respond to the grievances of the CMs was cancelled shortly before its scheduled time, ostensibly to give more time to talks that are continuing between the govt. and the CMs. Revised allocations for expenditures under the development head have been drawn up by the Planning Commission and are being shared with the provincial govts. Dawn. ‘Sindh to pass budget only for four months’ Funds for development and non-development sectors would be allocated for the entire FY19 in the upcoming budget, but approval for utilisation would only be sought for the first four months of the fiscal year. Sindh CM Murad Ali Shah has said that there would be two components to the budget presentation in the provincial assembly in May’18 – a supplementary budget for expenditures of the ongoing FY18 and the budget for FY19. The News. FED to be increased on cement, cigarettes The FBR is expected to increase FED on certain items, including cement, as a revenue generation measure for FY19. In budget FY18, cement was subjected to FED at PKR 1.25/kg. Budget makers also considered a proposal to raise taxes on the import of edible oil, but the proposal has not materialized. BR. As budget looms, tax plan still under debate The govt. is still debating the fate of key revenue measures just a day before the budget announcement. The fate of at least three major taxes, super tax, tax on bonus shares and on undistributed inter-company dividends, hangs in the balance. Tax on bonus shares was introduced in the Finance Act 2014, while the other two came in 2015. All three measures are still being met with \ strong industry resistance, who complain that they are tantamount to a penalty for compliant taxpayers. Dawn. Govt. set to break last year's foreign borrowing record Pakistan has borrowed $ 7.9Bn during 9MFY18, which has almost breached the limit of annual foreign borrowing of $8Bn. Keeping in view the current trend, the govt. is all set to break the previous year's record of borrowing around $10Bn. The Asian Development Bank (ADB) had recently expressed concerns over borrowing to contain the foreign exchange reserves that are depleting due to widening of current account deficit. IMF had recently estimated Pakistan's external debt and liabilities could peak to $ 144Bn in the next five years from $ 93Bn in the current FY18. The Nation. Sindh, Russia's St Petersburg ink MoU Sindh and St. Petersburg, a Russian port city, has agreed on cooperation in various fields, including education, health, textile, pharmaceuticals, oil and gas and IT, while a MoUhas been signed in the field of medical science. Several Russian delegates, including officials and businessmen are visiting Sindh on the invitation of Sindh Board of Investment and Ministry of Planning and Development. The News. Importance of renewable energy for sustained economic growth stressed President, Karachi Chamber of Commerce and Industry (KCCI), Muffasar Atta Malik has urged for provision of reliable and affordable energy to industry to increase productivity and to ensure its competitiveness. Malik also said that by shifting to renewable energy sources for power generation, industries could generate sufficient electricity for their own use and avoid fuel price volatility. He was speaking at ‘Management Awareness Training Session on Renewable Energy and Energy Efficiency’ organized by United Nations Industrial Development Organization (UNIDO). BR. SCB launching RMB-based solutions to boost CPEC trade The Standard Chartered Bank (SCB) is all set to launch RMB-based solutions for traders to assist Pakistan in maximizing its share in the $ 2.5Tn worth of trade available by virtue of China’s revolutionary Belt and Road Initiative (BRI). It will also provide hedging to suppliers to mitigate their risks. RMB (Renminbi) is increasing its share in different international baskets as it has obtained share of 11% in Special Drawing Rights (SDRs) of the IMF. The News. FBR considers incentive withdrawal on foreign loans The FBR is considering withdrawal of an incentive allowed to banks on advances through their foreign branches. Banks have been allowed losses of 1% against total advances given during a year; however, they are reportedly misusing the facility by claiming huge advances to their foreign clients through foreign branches. The News. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 25-Apr 115.62 118.70 0.00% 0.38% Crude (JU'18) 25-Apr 25-Apr 25-Apr 25-Apr PKR PKR Pts. $ Mn $/bbl 45,718 -1.16 68.04 -0.35% NM** 0.46% Gold (MY'18) Gold (10g) Local 25-Apr 25-Apr $/oz PKR 1,320.3 51,042 -0.94% -0.25% Silver (MY'18) Cotton(KHI)-40 kg 25-Apr 25-Apr $/oz PKR 16.52 8,145 -1.31% 1.33% Kibor-6M 25-Apr % 6.52 $ Bn 17.55 0.00% WoW -0.53% Remittances 13-Apr FY18 Jul-Mar 18 $ Bn 14.61 YoY 3.55% Exports* Imports* Jul-Mar 18 Jul-Mar 18 $ Bn $ Bn 17.08 44.38 13.08% 15.57% USD-Interbank USD-Open MKT KSE-100 index FIPI Forex Reserves Jul-Mar 18 Trade Balance* $ Bn -27.30 Jul-Mar 18 Current Account $ Mn -12,029 Foreign Direct Inv. $ Bn 2.09 Jul-Mar 18 Jul-Feb 18 LSM Growth* % 6.24 % 3.20 Jul-Mar 18 Avg. CPI Discount Rate % 6.00 Mar-18 WoW= Sources: KCCI Research, PMEXweek , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; -17.18% -50.55% 4.44% Major Currencies 175 GBP, 25-Apr-18, 161.4 165 155 145 EUR, 25-Apr-18, 141.0 135 125 115 USD, 25-Apr-18, 115.7 105 95 Apr-17 USD Jul-17 GBP EUR Oct-17 Jan-18 Source: KCCI Research ; Oanda.com Quote of the Day "Don't let the fear of losing be greater than the excitement of winning." Robert Kiyosaki Chart of the Day Outstanding Bank Credit to Private Sector (PKR Bn) Mar'18 Jun'17 Jun'16 Jun'15 Jun'14 Jun'13 Jun'12 Jun'11 Jun'10 Jun'09 Jun'08 Jun'07 Jun'06 4,042 3,651 3,377 2,976 2,922 2,918 2,749 2,652 2,662 2,295 1,957 0 1,000 2,000 3,000 4,000 4,754 5,000 5,231 6,000 Source: KCCI Research, SBP 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. icon represents the sole viewpoint of the KCCI R&D Cell, and is stated to enrich the readers' understanding of the news item. The R&D Dept. bears no responsibility for its correctness or accuracy. Contact: res@kcci.com.pk