Pakistan Daily Economy Update - 7 May

Transcription

1. May . 6-7, 2018 KCCI - eBulletin Normalcy can help boost Indo-Pak trade volume to $ 30Bn: Bisaria Despite many issues and hindrances, bilateral trade between India and Pakistan reached $ 2.2Bn in FY17, though there is a potential to go up to $ 30Bn per year, Indian High Commissioner to Pakistan Ajay Bisaria said. During an interaction with members of KCCI, the envoy stressed that there is a lot of positivity among the people of India and Pakistan. There is need for taking at least small positive steps to normalize relations.. He suggested that business communities and the general public on the both sides should come up and form pressure groups/lobbies to push their respective govts to work for closer relations in the two countries. Dawn-Sun. Plan to exchange trade data with China misses second deadline Pakistan’s decision to postpone signing of the revised FTA with China has now hit its plans to digitally exchange trade data to capture the real value of imports from it, as China has missed the 2nd deadline to make the new system operational. Pakistani authorities believe that by delaying the operationalization of the Electronic Data Exchange, Beijing is retaliating against Islamabad’s decision to postpone the signing of the FTA-II. The original deadline to make the new system operational was 1st Apr, which was rescheduled to 30th Apr. The delay has undermined the customs authorities’ plan to stop the understatement of the value of imported goods. Customs authorities are of the view that imports from China are undervalued by at least $ 4Bn, which is adversely affecting revenues. Tribune-Sun. Budget 2018-19: bodies formed to review reforms, remove anomalies Finance Minister Miftah Ismail has constituted two high-level committees to review reforms in the economic sector and make recommendations for removal of anomalies in Finance Bill 2018. The Economic Reforms Committee will review reforms in the economic sector while the Anomaly Committee will review the Finance Bill, identify anomalies in the budget proposals and make recommendations for removing those anomalies. President KCCI is a member of the Anomaly Committee which also includes other members of the business community across the country. BR-Sun. Cabinet delays approval of anti-money laundering powers Pakistan’s efforts to avoid inclusion in the grey list of Financial Action Task Force (FATF) may have suffered a setback as the federal cabinet has refused to approve a summary sent by the finance division to notify an investigation and prosecuting agency under the Anti-Money Laundering Act (AMLA) 2010. The cabinet has instead referred it to the law division for vetting, which could result in a sustained delay even as a FATF team is preparing to visit Pakistan to review progress made by the govt. towards plugging the holes in the country’s anti-money laundering framework. Dawn-Sun. Circular debt in power sector: financial system at risk The unsustainable power sector circular debt has reportedly put the country's financial system at risk as the Finance Ministry has refused to extend budgetary support, citing financial constraints. According to Secretary Power Division, power sector circular debt was around PKR 570Bn in Apr’18 in addition to PKR 452.33Bn PHPL current debt, totaling PKR 1.02Tn. The PM has been on record as taking note of the very difficult situation and saying that with such a huge circular debt, financial system of the country cannot be run. However, Minister for Power Division, Awais Leghari stated that an amount of PKR 100Bn is to be injected in the power sector to ensure liquidity in system. BR-Sun. Judicial body tells courts not to issue stay orders on CPEC On repeated requests from China, Pakistan’s top judicial policymaking body has asked the country’s high courts and lower judiciary not to issue ex parte stay orders in respect of CPEC-related projects. The National Judicial Policy Making Committee (NJPMC) headed by Chief Justice of Pakistan, has also asked the Planning Commission to consult the Supreme Court if it requires any support in matters relating to CPEC. The decisions were taken at a special meeting of the NJPMC in Feb’18. The Chinese side has reportedly been pressing hard at almost every forum for exemption from stay orders and suggesting special arrangements for expeditious resolution of disputes with Chinese investors, contractors and financiers. Dawn-Sun. Supply chains: FBR to chalk out economic operator programme The FBR is to chalk out an authorized economic operator programme to provide facilitations relating to secure supply chains of imported and exported goods to ensure regulatory controls by customs department. FBR officials informed the Senate Standing \ Committee on Finance that a new section 212A has been proposed in the Customs Act, 1969 in this regard. The Committee was also informed that a new section 83B has been inserted in the Customs Act i.e. provisional release of imported goods. Under the section, where any offence is detected in respect of imported goods which are not liable to be confiscated or needed for evidence at a later stage, the collector of customs may allow release of the goods on payment of duty, taxes, penalty or fine which may be imposed on such goods. BR-Sun. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 4-May 115.62 118.45 0.00% -0.21% Crude (JU'18) 4-May 4-May 4-May 4-May PKR PKR Pts. $ Mn $/bbl 44,537 -1.29 69.82 -0.47% NM** 1.93% Gold (MY'18) Gold (10g) Local 4-May 4-May $/oz PKR 1,315.6 49,800 0.21% -0.17% Silver (MY'18) Cotton(KHI)-40 kg 4-May 4-May $/oz PKR 16.50 8,038 0.52% 0.00% Kibor-6M 4-May % 6.51 $ Bn 17.71 -0.01% WoW 3.40% Remittances 27-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 % 3.70 Jul-Apr 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, 6-May-18, 156.5 165 155 145 EUR, 6-May-18, 138.4 135 125 115 USD, 6-May-18, 115.7 105 95 May-17 USD Aug-17 GBP EUR Nov-17 Feb-18 Source: KCCI Research ; Oanda.com Quote of the Day "A budget is more than just a series of numbers on a page; it is an embodiment of our values". Barack Obama Chart of the Day Pakistan's Budget - Resources Vs. Expenditures Steep fall in cotton sowing due to water crisis Massive water shortages in Sukkur and Kotri barrages are leaving large agricultural lands across Sindh parched, with the cotton crop badly affected. Sukkur barrage has seen a 43% shortage while Kotri is seeing 61% thus far. Wheat, sugarcane, vegetables, mango and banana orchards have been adversely affected while only 20% of cotton crop has reportedly been sowed in the tailend areas. Dawn-Sun. 6,000 Power supply to improve before Ramadan Power shortage in the country is back due to rising temperature but it is believed that the shortfall of over 6,500MW, is temporary and will be controlled before the start of Ramadan. Three RLNG-based power plants, Balloki, Bhikki and Haveli Bahadur Shah, have not started power generation on commercial basis; however these plants are likely to start production before Ramadan. Hence, there will be no load shedding on more than 60% feeders of the country where losses are less than 10%. The Nation – Sun. 3,000 NLC, Daimler AG sign MoU for assembly of Mercedes-Benz trucks in Pakistan The National Logistics Cell (NLC) has signed a MoU with Daimler AG for local assembly and production of Mercedes‐Benz trucks in Pakistan. This will mark a major shift in the logistics and transportation industry’s preference towards European manufacturers. The development will ensure healthy competition in the trucking industry and meet the logistics requirements of CPEC. Tribune-Sun. 0 5,000 4,000 2,000 1,000 FY12 FY13 Resources (PKR Bn) FY14 FY15 FY16 Expenditure (PKR Bn) FY17 FY18R FY19B Bank Borrowing (PKR Bn) Source: KCCI Research, MoF Disclaimer Critical US-China trade talks end in Beijing China and the US ended the 2nd day of high-stakes trade talks with big differences, leaving the world's two largest economies on This report has been prepared by KCCI Research & Development Cell. The information contained the brink of a trade war that could have knock-on effects on the global economy. The talks were aimed at forestalling 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. momentum towards a looming conflict, with both sides prepared to pull the trigger on tariffs that could affect trade in billions of dollars of goods. US President Donald Trump has threatened to levy new tariffs on $ 150Bn of Chinese imports while Beijing has 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 shot back with a list of $ 50Bn in targeted US goods. BR-Sun. accuracy. Contact: res@kcci.com.pk