Pakistan Daily Economy Update - 7 May

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1. May 07 , 2022 KCCI - eBulletin KCCI to organize ‘My Karachi Expo’ on 13th After remaining suspended since 2020 due to outbreak of Covid-19 pandemic, KCCI is all set to organize the 17th My Karachi – Oasis of Harmony International Exhibition at Karachi Expo Center on 13th, 14th and 15th May’22 with the same zeal and enthusiasm. The exhibition, which is being staged in three halls of the Expo Center, will provide a perfect platform for business-to-business and businessto-consumer meetings besides providing recreational facilities to Karachiites who densely participate in this glittering event. Highlighting the successful journey of My Karachi Exhibition, President KCCI Muhammad Idrees said that during the tenure of late Siraj Kassam Teli as president KCCI in 2004, he felt there was a need to clarify the negative perception about Karachi city, which mainly emerged due to negative projection by the media, particularly the western media. BR. Six-day work week, reduced timings notified The federal govt. did not restore the Saturday weekly off despite protests by employees, sticking to the six-day routine, but notified new reduced working hours. According to a notification issued by the Establishment Division, govt. offices will remain open from 8am to 3pm with a 30-minute break at 1pm whereas the timings on Friday will be 8am to 1pm. Dawn. SBP restores Saturday as holiday for banks SBP will observe the following working days and timings with immediate effect. Monday to Thursday from 9:00 a.m. to 5:30 p.m. with prayer/lunch break from 1:30 p.m. to 2:15 p.m. whereas on Friday office hours will be from 9:00 a.m. to 6:00 p.m. with prayer/lunch break from 1:00 p.m. to 2:30 p.m.. Banks/Microfinance Banks (MFBs) may prescribe business (banking) hours for public dealing as per their business requirements. BR. CM orders decisive operation against water theft in Karachi Sindh CM Syed Murad Ali Shah has decided to launch a vigorous operation against water theft so that water could be supplied to the affected areas of the city. Overall water supply to the city is around 406Mn gallons daily against a demand for 1,000 mgd. The water distribution network, which had been built several decades back, has outlived its usefulness. KWSB took 450 mgd from Dhabeji, 100 mgd from Hub and 30 mgd from Gharo. In this way, it gets 580 mgd, of which 30% or 174 mgd gets wasted due to line losses that means 406 mgd is available for the city. The News. Shortfall of 3Mn tons in wheat production feared, PM told According to the PM Office, wheat production is projected to be 26.17Mn tons against a target of 28.89Mn tons while the estimated consumption would be around 30.79Mn tons. The meeting was informed that reduced area under wheat cultivation, shortage of water and fertilizer, and delay in the announcement of support price had led to a shortfall of 2% in production. Dawn. ADB okays $ 18Bn ceiling for lending The Asian Development Bank (ADB) has approved a ceiling of up to $ 18Bn in Policy-Based Lending (PBL) between 2022 and 2024 and enhanced its crisis-response instruments to support its developing member countries as they pursue a green, resilient and inclusive recovery. Expanded PBL commitments will support developing member countries to undertake critical policy reforms and to address gaps in their development financing requirements. Dawn. PM for boosting IT exports to $ 15Bn PM Shehbaz Sharif has said that Pakistan offers huge opportunities for investments in technology sector and the govt. intends to increase IT exports from $ 1.5Bn to $ 15Bn in the coming years. Dawn. Power consumers given another tariff shock The National Electric Power Regulatory Authority (Nepra) has notified a PKR 2.87 per unit additional Fuel Cost Adjustment (FCA) for exWapda distribution companies (Discos) for Mar’22 and PKR 1.39 per unit FCA for K-Electric for consumption in Feb’22 to provide PKR 29Bn and PKR 1.59Bn additional revenue respectively. Dawn. Support for fuel management: Govt in search of a feasible plan Ministries of Finance, Power and Petroleum have been directed to work out a feasible plan for fuel purchase to end load-shedding in the country and to ensure sustainable power distribution throughout the country. The power division has sought PKR 329Bn in total and the break-up shows that it requires PKR 108Bn till 25th May’22, PKR 136Bn till 7th Jun’22 and another PKR 85Bn till 15th Jun’22, for \ purchasing furnace oil. BR. MoF prepares draft policy on SOEs Ministry of Finance (MoF) has prepared a draft policy on governing of poorly performing State-Owned Enterprise (SOEs) as per the agreed IMF’s Structural Benchmark in the sixth Review MEFP of EFF (2019-22) with collaboration of the Asian Development Bank (ADB). According to Finance Ministry, Pakistan officially has 206 SOEs; most of them are performing poorly. About 57 to 60 of the SOEs are considered material, which together control over 97% of assets held by all 206 entities. BR. Floating solar project: World Bank invites Pakistan to hold talks on $ 341.5Mn loan The World Bank (WB) has invited Pakistani authorities for negotiation of $ 341.5Mn loan to set up 300-MW floating solar project at Tarbela - Ghazi Barotha complex. The Floating Solar Projects (FSPs) will supply zero emission electricity to meet peak daytime demand in summer and facilitate storage of water in the Complex to meet peak demand in the winter. BR. Pak-Iran freight train service suspended after derailment in Chagai The freight train service between Pakistan and Iran was suspended when a train coming from Zahedan was derailed in the Dalband in area of Chagai district on Friday (6th May’22). Dawn. Bidding for 11GW of solar, wind power capacity A new World Bank study based on current projections says Pakistan needs to carry out competitive bidding for more than 11 Gigawatts (GW) of solar and wind power capacity between now and 2028 to ensure that future procurement of variable renewable energy is carried out strategically, transparently, and at least-cost. The study notes that competitive bidding for new power capacity in Pakistan has yet to be implemented. It noted that there was 1,700 megawatts (MW) of solar and wind power capacity installed as of Sep’21 against a target of 12,900MW by 2030, 11,200MW must be installed between now and then. Dawn. July-April trade gap nears $ 40Bn The country’s trade deficit jumped by an all-time high of 65% year-on-year to $ 39.3Bn during 10MFY22 on the back of higher-thanexpected imports. During 10MFY22, the import bill rose 46.4% to $ 65.5Bn from $ 44.7Bn over 10MFY21. In Apr’22 alone, the import bill edged up to $ 6.6Bn from $ 5.24Bn over Apr’21, reflecting an increase of around 26%. In 10MFY22, exports jumped 25.5% to reach $ 26.2Bn from $ 20.9Bn 10MFY21. In Apr’22, exports grew 29.5% to $ 2.87Bn from $ 2.21Bn in Apr’21. Dawn. SBP reserves fall $ 59Mn to $ 10.5Bn On 30th Apr’22, the foreign currency reserves held by SBP were recorded at $ 10.5Bn, down $ 59Mn compared with $ 10.56Bn on 23rd Apr’22. Net reserves held by commercial banks amounted to $ 6.05Bn. Overall liquid foreign currency reserves held by the country stood at $ 16.55Bn. Tribune. List of Indicators Date / Period Unit Value Change Daily USD-Interbank USD-Open MKT 6-May 6-May PKR PKR 186.63 186.00 0.51% -0.21% KSE-100 index FIPI 6-May 6-May Pts. $ Mn 44,841 -1.16 -0.90% NM** Crude Oil 6-May $/bbl 110.56 1.69% Gold 6-May $/oz 1,883.5 0.48% Gold (10g) Local 6-May PKR 114,460 -1.69% Silver 6-May $/oz 22.37 -0.40% Cotton(KHI)-40 kg 6-May PKR 22,506 0.00% Kibor-6M 6-May % 14.87 0.04% Forex Reserves 30-Apr $ Bn 16.55 WoW -0.69% Remittances Jul-Mar 22 $ Bn 22.95 7.04% Exports* Jul-Apr 22 $ Bn 26.23 25.46% Imports* Jul-Apr 22 $ Bn 65.49 46.41% Trade Balance* Jul-Apr 22 $ Bn -39.26 -64.79% Current Account Foreign Direct Inv. Jul-Mar 22 Jul-Mar 22 $ Bn $ Bn -13.17 1.29 -4688.7% -1.99% YoY Jul-Feb 22 LSM Growth* % 7.80 % 11.04 Jul-Apr 22 Avg. CPI Discount Rate % 12.25 Apr-22 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful, WoW= week on week; YoY=Year on Year Major Currencies 255 245 235 225 215 205 195 185 175 165 155 145 May-21 GBP, 6-May-22, 237.3 EUR, 6-May-22, 197.0 USD, 6-May-22, 186.0 USD Aug-21 GBP Nov-21 EUR Feb-22 May-22 Source: KCCI Research Quote of the Day "Coming together is a beginning; keeping together is progress; working together is success." Edward Everett Hale Sector Wise Inflation (Apr'22 over Apr'21) General Transport Food & Non-alcoholic Bev Household Maintenance Restaurants & Hotels Miscellaneous Clothing & Footwear Health Recreation & Culture Education Housing/Water/Elec./Fuels Alcoholic Bev / Tobacco Communication 13.37% 17.04% 14.66% 14.57% 12.76% 10.84% 10.37% 9.65% 8.36% 7.05% 5.11% 1.61% 0% 10% 20% 28.34% 30% Source: KCCI Research; PBS 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.