Pakistan Daily Economy Update - 5 April

Transcription

1. Apr . 05, 2018 KCCI - eBulletin FTA with China delayed due to industry concerns The federal govt. has deferred 2nd phase of the FTA with China on the demand of the business community. In this regard, Commerce and Textile Minister, Muhammad Pervez, has said that talks will continue till a final draft is agreed upon. Pakistan and China began the 10th round of negotiations on renewal of an FTA in Islamabad on Apr. 2, 2018. This was supposed to be the final round following which both sides were to sign the agreement. The Pakistani team was keen to finalize the agreement in this round so a formal announcement could be made during the prime minister’s forthcoming trip to China later this month. However, govt. chose to build consensus among the business community as it remained elusive from the whole process of FTA finalization. Dawn. Govt. considering taxing ‘gifts’ among non-family members The govt. is considering levying a tax on ‘gifts’ given by taxpayers to non-family members after wealthy Pakistanis gave away PKR 102Bn under the scheme in FY17, which the FBR initially claimed was an act of money laundering. The money that a taxpayer will show as gift from or for non-family members in his wealth statement would be treated as his income and the amount will be charged at standard income tax rates. The proposal is to fix the minimum taxable limit of a gift in the range of PKR 1Mn to PKR 1.5Mn. However, gifts to family members are still proposed to remain exempted from income tax. Tribune. ‘Govt. will consider abolishing regulatory duty on steel’ Federal Minister for Commerce and Textile, Pervez Malik, has said that the govt. will consider abolishing regulatory duty on steel. His statement comes as the govt. continues to negotiate terms with China in the 2nd phase of the FTA. He also urged the private sector to meet international standards and better marketing of products to compete effectively. Tribune. Notification issued: three surcharges made part of Discos tariffs for FY16 Nepra has formally issued notifications making three surcharges part of power Discos tariff for FY16. The govt. intends to recover PKR 100-110Bn from consumers through surcharges of PKR 1.55/unit. The govt. has levied tariff rationalization surcharge with immediate effect at the rate mentioned against each consumer, during each of the billing month across the country. The companies will deposit the amount of tariff rationalization surcharge in a fund called the "tariff rationalization fund" to be kept in the Escrow Account maintained at CPPA-G Ltd. BR. Monthly bill of 50,000 or above: Mobile phone subscribers to be registered To tighten the noose around tax dodgers, Tax Reform Implementation Committee (TRIC) and FBR have decided to register those mobile phone subscribers who pay monthly bill of PKR 50,000 and above by sifting the mobile phone companies data. Notices for TY17 would also be issued to unregistered persons on the basis of all types of information including sale/purchase of immovable property, educational expenses, electricity expenses, etc. Moreover, FBR Member IT would prepare a list of top 10,000 persons from whom advance tax under section 236K was collected and their corresponding data from banks, telecommunication and Civil Aviation would be correlated and consolidated to segregate those 10,000 into nonfilers and filers. BR. FY19 Budget: EAC to finalize suggestions today A meeting of the Economic Advisory Council (EAC) is schedule to convene on Apr. 5, 2018 (today) for discussing and finalizing recommendations to be proposed in the upcoming budget of FY19. The basic purpose of the EAC is to take on board the private sector for assisting the govt. in finalizing budget through its recommendations. However, it has been reported there is no role of the EAC in the budget-making process as the entire exercise is done by the bureaucracy and the EAC meets only once or twice a year and it is the govt.’s discretion to accept or reject its recommendations. BR. Hydroelectric power, water sector to get Rs59b instead of Rs272b demand The allocation for water sector is likely to go down in the PSDP 2018-19 as instead of allocating 10% of the total development portfolio, the govt. have combined both hydroelectric power and water sector and has given a budget ceiling \ of PKR 59Bn. The demand of both hydroelectric power and water resource were PKR 272Bn. The Nation. Increased allocations for provinces: govt. left with no option but to borrow: PM In a recent meeting of National Economic Council (NEC), PM Abbasi stated that govt. is left with no other alternatives but to borrow for meeting its expenditure, as major chunk, i.e. 58% of total revenue is being provided to the provinces in the light of NFC Award. While highlighting the difference between productive and non-productive borrowing, the PM emphasized on appropriate utilization of debt for the development schemes beneficial for the country. During the meeting, provinces also acknowledged their failure in achieving desired targets in the last five years. BR. Repayment challenge staring into country’s eyes Addressing a three-day conference titled ''1st Islamabad International Counter Terrorism Forum (IICTF-2018), State Minister for Finance, Rana Afzal Khan said that Pakistan is facing the challenge of timely repayment of installments of loans taken for different projects. He further said that the business community is coming to the govt. and asking it to stop the upward journey of dollar, as imports are becoming expensive. The minister also informed the conference about IMF’s concern that Pakistan’s investment in infrastructure and other areas is so huge that loans repayment will be delayed and some of our installments will become due soon. BR. Govt. removes ban on furnace oil imports as power demand rises The Cabinet Committee on Energy has lifted the ban on import of furnace oil for running power plants and has directed PSO to place orders for bringing fuel cargoes in order to meet growing electricity demand in summer. The govt. had imposed restrictions a few months ago on the consumption of furnace oil in power plants, preferring LNG in electricity production. At present, the demand for electricity in the country stands close to 17,000MW, and is expected to cross 20,000MW in the peak summer season. Tribune. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 4-Apr 115.61 116.35 0.02% 0.00% Crude (MY'18) 4-Apr 4-Apr 4-Apr 4-Apr PKR PKR Pts. $ Mn $/bbl 46,104 4.18 63.55 0.20% NM** -0.03% Gold (MY'18) Gold (10g) Local 4-Apr 4-Apr $/oz PKR 1,333.9 50,528 0.10% 0.17% Silver (MY'18) Cotton(KHI)-40 kg 4-Apr 4-Apr $/oz PKR 16.29 7,823 -0.61% -1.36% Kibor-6M 4-Apr % 6.50 $ Bn 17.95 0.00% WoW -0.72% Remittances 22-Mar FY18 Jul-Feb 18 $ Bn 12.83 YoY 3.41% Exports* Imports* Jul-Feb 18 Jul-Feb 18 $ Bn $ Bn 14.85 39.13 11.66% 17.19% USD-Interbank USD-Open MKT KSE-100 index FIPI Forex Reserves Jul-Feb 18 Trade Balance* $ Bn -24.28 Jul-Feb 18 Current Account $ Mn -10,826 Foreign Direct Inv. $ Bn 1.94 Jul-Feb 18 Jul-Jan 18 LSM Growth* % 6.33 % 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; -20.85% -50.03% 15.64% Major Currencies 175 GBP, 4-Apr-18, 162.8 165 155 145 EUR, 4-Apr-18, 142.1 135 125 115 USD, 4-Apr-18, 115.7 105 95 Apr-17 Jul-17 GBP USD EUR Oct-17 Jan-18 Source: KCCI Research ; Oanda.com Quote of the Day "Do not rush the art of achievement. Focus on mastery before you focus on success." Robert Greene Chart of the Day SECTOR-WISE PROFIT REPATRIATION ON FOREIGN INVESTMENT (FEB.'18) Cement 2% Others 6% Trade 2% Electronics 3% Food 36% Oil & Gas Explorations 4% Transport 5% Beverages 12% Power 30% Source: KCCI Research, SBP Pakistan approaches World Bank after India builds Kishanganga on Neelum Disclaimer Having confirmed that India has completed the controversial Kishanganga hydropower project, Power Division has sent a This report has been prepared by KCCI Research & Development Cell. The information contained fresh communiqué early this week to the World Bank urging the international organisation to “recognise its responsibility” herein have been compiled or arrived at based upon information obtained from sources believed to under the Indus Waters Treaty of 1960 to address concern over two disputed projects. India had completed the 330MW be reliable and in good faith. Such information has not been independently verified. Kishanganga project during the period the World Bank “paused” the process for constitution of a Court of Arbitration (COA) icon represents the sole viewpoint of the KCCI R&D Cell, and is stated to enrich the readers' as requested by Pakistan in early 2016. The Pakistani request, then, was countered by India by calling for a neutral expert. understanding of the news item. The R&D Dept. bears no responsibility for its correctness or accuracy. Contact: res@kcci.com.pk Dawn.