Pakistan Daily Economy Update - 1 August

Transcription

1. Aug . 01, 2016 KCCI - eBulletin SBP keeps policy rate unchanged at 5.75% citing inflation fears A nine-member Monetary Policy Committee (MPC) of SBP, focusing on inflationary expectations and increased economic List of Indicators activity in FY17, has decided to maintain policy rate at 5.75% for the next two months. Any upward revision in gas tariff, fiscal slippages, and supply disruption may pose a risk to inflation along with sluggish global demand, possible dampening USD-Interbank effect of Brexit on global commodity prices and difficulties in clearing excess domestic food stocks. BR – Sun. USD-Open MKT KCCI demands withdrawal of regulatory duty on sugar Karachi Chamber of Commerce and Industry (KCCI) President Younus Muhammad Bashir has urged the Finance Ministry and FBR to immediately withdraw regulatory duty on numerous imported raw materials, particularly sugar and hydrogen peroxide with a view to reduce the cost of doing business. He said that if it was really inevitable to impose regulatory and Customs duties for the protection of local industry, these duties should be somewhere in between 5% to 10%, but the exorbitant regulatory duty of 20% on sugar has to be withdrawn, while 20% Customs duty must also be reduced. The News – Sun. FBR, real-estate sector clinch property valuation deal FBR and real-estate stakeholders have agreed on new valuation tables. In this regard, govt. has reduced the holding period of property from 5 to 3 years for CGT-exemption. Similarly, CGT rate will be 10% on a property held for one year, 7.5% on a property held between one and two years, and 5% if the holding period is between 2 and 3 years. If a property is held for more than three years, it will be exempted from CGT. On the issue of transactions made before Jul, 1. 2016, the CGT rate will be 5% to declare a property at its actual cost on a one-time basis if the holding period is less than 3 years. It has also been proposed that tax will be paid on the amount of the difference between the declared cost and actual cost. Dawn Sun. Economic Indicators Date / Period Unit Value Change Daily 29-Jul PKR 104.84 0.00% 29-Jul PKR 105.80 0.91% KSE-100 index FIPI 29-Jul 29-Jul Pts. $ Mn 39,529 0.74 0.15% NM** Crude (JU'16) 29-Jul $/bbl 41.44 0.80% Gold (MY'16) 29-Jul $/oz 1,350.5 1.12% Gold (10g) Local 29-Jul PKR 44,828 -1.47% Silver (MY'16) 29-Jul $/oz 20.39 0.67% Cotton(KHI)-40 kg 29-Jul PKR 6,950 -1.52% Kibor-6M 29-Jul % 5.98% 0.01% Forex Reserves 15-Jul $ Bn 23.09 0.13% Remittances Jul-Jun 16 $ Bn 19.90 7.84% Exports* Jul-Jun 16 $ Bn 20.80 -12.11% Imports* Jul-Jun 16 $ Bn 44.76 -2.33% Trade Balance* Jul-Jun 16 $ Bn -23.96 -8.13% Current Account Avg. CPI-FY16* Jul-Jun 16 Jul-Jun 16 $ Mn % -2,525 2.86 6.79% WoW YoY Petroleum products' prices to stay unchanged: Dar Jun-16 % 5.75 The govt. has decided not to increase petroleum prices for Aug.’16; after which existing prices will remain unchanged till Discount Rate Sources: KCCI Research, PMEX, NCCPL, KSE, SBP, PBS* Aug. 31, 2016. In this regard, Finance Minister stated that currently sales tax and petroleum levy on petrol is PKR 9.34/liter ** Not Meaningful WoW= week on week; YoY=Year on Year and PKR 8.19/liter respectively as against PKR 14.70 and PKR 10/liter in Mar.’13. Similarly, sale tax and petroleum levy on Major Currencies kerosene oil is being charged at PKR 14.30/liter and PKR 6/liter as against 10.3/liter each in 2013 while sales tax and petroleum levy on diesel are being charged at the same level of Mar.’13. BR – Sun. 175 DAP fertilizer import: Food ministry irked by inflated import claims The Ministry of National Food Security and Research has not taken inflated import claims from certain fertilizer companies kindly. Due to the dismal performance of the agriculture sector last year, the federal govt. has announced a subsidy of PKR 20Bn on DAP import with fixed rate of PKR 2,500 per 50 kg bag to be available in the local market. Ministry said that they are shocked to see huge claims of over Rs1 billion by a single company showing the import of DAP during just four days from June 26 to June 30, 2016 so soon after the notification. Tribune – Sun. No new IMF program under consideration: Wathra SBP Governor Ashraf Wathra has said that there is no new International Monetary Fund (IMF) program under consideration. He said that Pakistan has successfully completed Extended Fund Facility program with the IMF and that 12th IMF Review under the EFF will be held next week in Dubai and post-program reviews will continue even after the program. BR – Sun. EU urges govt. to lift duty on import of milk powder The European Union has urged the Pakistani govt. to remove the 25% regulatory duty on import of milk powder, which has hurt the export of this product. The demand was made by some EU ambassadors at a meeting with Commerce Minister Khurram Dastgir Khan. The ambassador of EU Mission led the delegation, accompanied by ambassadors of France and Holland, to take up the issue with the Pakistani authorities. Tribune – Sun. Govt. decides to impose ban on import of 'Sheesha' The govt. has decided to impose ban on import of 'Seesha' and its use across Pakistan after seeking approval from the federal cabinet. In this regard, Commerce Ministry suggested that since the issue needs amendment in the Import Policy Order, 2016 issued on Apr. 18, 2016, therefore, Ministry of National Health Services, Regulations and Co-ordination should send a summary directly to the ECC for imposing ban on import of Sheesha. BR – Sun. ‘Economic inequality rising in Pakistan’ According to a United Nations Development Programme (UNDP) report, the problem of 22 families controlling 66% of Pakistan’s industrial assets, as identified by Dr. Mahbubul Haq in 1968, remains relevant today due to rising inequality in a country where the richest 20% consume seven times more than the poorest 20%. The report titled ‘Development Advocate Pakistan’ claims that inequality has grown even though consumption based poverty has dropped from 57.9% to 29.5% between 1998-99 and 2013-14, and multidimensional poverty – which includes health, education and living standards – has fallen from 55.2% to 38.8% between 2004-5 and 2014-15. Dawn - Mon. Microfinance: outreach and service quality The Microfinance sector is making its mark, but with penetration rate still low and distribution of micro credit uneven. From the borrowers’ point of view, interest rates are high, processing of loans still cumbersome and the quality of service wanting on several counts. At end-March 2016, the total number of active micro loan borrowers topped 4Mn; the outstanding amount of micro loans touched PKR 105Bn; micro savings stood at PKR 68Bn and the number of micro insurance policy holders exceeded 5.5Mn, according to the latest stats of the Pakistan Microcredit Network (PMN), a platform of microfinance providers. Dawn - Mon. Punjab’s curb on expansion of sugar industry The ban by the Punjab government on the setting up or expansion of sugar mills in cotton growing areas, now upheld by the Supreme Court, should serve as a rationale for allocating the cultivable land among competing crops. This is how the crisis of over- and under-production in agriculture can be avoided, and commodity prices stabilized. In case of sugar, water availability is another issue. Announcing a 30-page verdict on Jul. 25, 2016 the Supreme Court judge Justice Ejaz Afzal said, “The fact that there were a number of reasons justifying the issuance of the impugned notification (of 2006) and each reason is itself sufficient to be categorized as constituting the public or national interest’. Dawn - Mon. 165 155 GBP, 31-Jul-16, 138.8 EUR, 31-Jul-16, 117.2 145 135 125 115 105 95 USD, 31-Jul-16, 104.9 85 75 Jul-15 Oct-15 USD Jan-16 GBP Apr-16 EUR Jul-16 Source: KCCI Research ; Oanda.com Quote of the Day "Character is like a tree and reputation like a shadow. The shadow is what we think of it; the tree is the real thing." Abraham Lincoln Chart of the Day Breakup of FBR Tax Collection (FY16) 1323.7 1,400 1,200 1194.6 1033.7 1087.8 1,000 800 600 400 306.2 162.2 200 406.2 190.6 0 Direct Taxes Sales Tax FY15 FED FY16 Value in PKR Bn Customs Source: KCCI Research, FBR 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