Pakistan Daily Economy Update - 10 October

Transcription

1. October 10 , 2020 KCCI - eBulletin Tough decisions must for revival of $ 6Bn IMF plan After losing the opportunity to revive $ 6Bn stalled IMF program after approving the budget FY21, the govt. will have to take three tough decisions including hiking power tariff, eliminating tax exemptions/ slapping more taxes and approving legislations to grant autonomy to regulators for reviving the IMF program. The IMF has not approved the 2nd review of the 39-month Extended Fund Facility this year due to disagreement over additional tax measures and increase in electricity prices. The News. Exporters irked by 800% hike in phyto-certificate fee Exporters have denounced the Ministry for National Food Security and Research for hiking the fee of export certificate for fruits and vegetables by 800% and have termed it an additional hurdle to increase in exports from Pakistan. The ministry has increased the fee for phyto-certificate, which is required for export of fruits and vegetables from the country to PKR 2,500 per item per container against PKR 300 earlier. Tribune. Entire Pakistan declared a locust-free country Federal Minister for National Food Security Fakhar Imam has declared entire Pakistan locust free, saying the country has successfully overcome the challenge of locust. The minister said that as per estimation, Sindh province is going to lose nearly 30% or 1.4Mn bales of cotton this year due to climate change implications, and Punjab was also badly affected. BR. Committee decides to generate electricity from city’s waste The Provincial Coordination and Implementation Committee (PCIC) in its 2nd meeting on Fri (9th Oct’20) has decided to launch a waste-to-energy electricity project for which necessary measures would be taken at the earliest. The matter of lifting of garbage came under discussion in the meeting and it was pointed out that out of 15 garbage transfer stations (GTS) only six were operational, therefore, revival or reconstruction of six other GTS was agreed. Dawn. NCOC limits marriage hall timings, number of guests The National Command and Control Centre (NCOC) has proposed restrictions on large-scale public gatherings and has issued fresh guidelines for marriage halls after the country saw a rise in Covid-19 infections. Under the revised guidelines, 300 people would be allowed for indoor and 500 for outdoor events, which would last for two hours, wrapping up by 10:00pm. Dawn. Refineries warn of closures amid rising stocks, low fuel off-take from OMCs Months after the severe Country-wide oil shortages, Pakistan’s oil refineries are raising red flags over lower uplifting of their refined products by Oil Marketing Companies (OMCs), resulting in curtailment of capacity utilization and crude production from oil fields. OMCs have scaled down their uplift of petroleum products following govt.’s decision to shift oil pricing to quarterly basis from monthly while substantial quantities of smuggled products had also made their way into the market. Dawn. High Tech SEZ status approved for NUST In a major breakthrough that would give tremendous impetus to Pakistan's economy, PM Imran Khan has approved High Tech SEZ status for the National University of Sciences & Technology (NUST). NUST has become the only High Tech SEZ among the 20 SEZs in the country (the remaining being industrial zones). BR. System soon to identify risky goods, individuals at borders Pakistan Customs has said that it will put in place a National Targeting Centre (NTC) to identify and profile risky goods and individuals to improve enforcement as part of the coordinated border management. The NTC system will be linked with departments including Immigration, NADRA, Advance Passenger Information System, Inland Anti-Smuggling monitoring mechanism and other relevant enforcement system and data bases. NTC will adopt a two-pronged strategy for processing of information received from different data sources — generating alerts for the operational units and trend analysis for a robust risk management system. Dawn. Suspected trade transactions: FMU Karachi for raising 'Red Flags' Financial Monitoring Unit (FMU) Karachi has asked all reporting entities including FBR and SECP to raise "Red Flags" for detecting \ suspected trade transactions involving transfer and export of technology, goods, software, services or expertise that could be used in nuclear, chemical or biological weapon related programs having significant threat to global security. The FMU has issued a circular number 10 of 2002 on the Red Flags Indicators for proliferation financing (2020). BR- Red Flags Indicators SBP reliance on loans more than doubles Following derailment of the IMF loan program, SBP’s reliance on loans to build forex reserves has more than doubled to $ 5.8Bn, indicating that over $ 12Bn worth of gross official reserves were the result of borrowing. As of Aug’20, SBP borrowed $ 5.77Bn from commercial banks under the forward and currency swap arrangements. In Feb’20 when Pakistan was implementing the IMF program, SBP’s borrowing under the swap and future contracts was $ 2.9Bn, including $ 1.6Bn in long-term contracts. Tribune. Covid-19 health risk allowance discontinued The Covid-19 risk allowance being granted to professionals working under the health department has been discontinued, a Sindh govt. notification stated. The order will be effective from 1st Oct’20. Under the previous order, the department was giving PKR 17,000-35,000 risk allowance to health professionals, according to their grade. Dawn. Government decides to convert additional PHL debt into public debt The government has reportedly decided to convert additional debt of PKR 80Bn of Power Holding Limited (PHL) into public debt as per agreements with the international financial institutions (IFI). The government has already converted PHL's debts of PKR 136Bn into public debt in accordance with an understanding with IFIs; and has already agreed to convert power sector debts existing on PHL books into public debt as these have matured. Finance Ministry will be responsible for retiring principal amount to the banks whereas CPPA-G will pay interest on the loans. Presently, PHL booked debts are over PKR 1Tn. BR. Economic Indicators List of Indicators Date / Period Unit Value Change Daily USD-Interbank USD-Open MKT 9-Oct 9-Oct PKR PKR 163.84 164.30 0.07% 0.06% KSE-100 index FIPI 9-Oct 9-Oct Pts. $ Mn 40,798 0.41 1.10% NM** Crude (AP'19) 8-Oct $/bbl 40.02 0.30% Gold (MA'19) 8-Oct $/oz 1,887.5 0.28% Gold (10g) Local 9-Oct PKR 100,400 1.04% Silver (MA'19) 8-Oct $/oz 23.90 2.41% Cotton(KHI)-40 kg 9-Oct PKR 10,074 1.62% Kibor-6M 9-Oct % 7.35 0.02% Forex Reserves 2-Oct $ Bn 19.35 WoW -0.94% Remittances Jul-Aug 20 $ Bn 4.86 31.01% Exports* Jul-Sep 20 $ Bn 5.46 -0.94% Imports* Jul-Sep 20 $ Bn 11.26 0.56% Trade Balance* Jul-Sep 20 $ Bn -5.80 -2.02% Current Account Foreign Direct Inv. Jul-Aug 20 Jul-Aug 20 $ Bn $ Bn 0.81 0.23 166.31% 39.94% YoY Jul-20 LSM Growth* % 5.02 % 8.84 Jul-Sep 20 Avg. CPI Discount Rate % 7.00 Jul-20 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful, WoW= week on week; YoY=Year on Year Major Currencies 235 225 GBP, 9-Oct-20, 212.0 215 205 195 EUR, 9-Oct-20, 192.7 185 175 165 155 USD, 9-Oct-20, 163.3 145 Oct-19 Jan-20 USD Apr-20 GBP EUR Jul-20 Source: KCCI Research ; Oanda.com Quote of the Day “Go big or go home. Otherwise, you are wasting your youth.” Jack Ma Category Wise Islamic Banking Financing Portfolio as of Jun'20 (%) Staff Financing Agriculture 0.30% SMEs 3.10% Consumer Finance 9.20% Commodity Financing 14.30% Corporate Sector 71.90% Revised duty drawback rates urged Source: KCCI Research, SBP Textile Mills have sought upward revision of duty drawbacks on exports to make them realistic with the current incidents of duties and taxes. They said that the existing duty drawback notification was issued around 11 years ago in 2009 and since then, the Disclaimer whole tariff rates have altogether changed and require immediate revision. The News. This report has been prepared by KCCI Research & Development Cell. The information contained herein have been compiled or arrived at based upon Gunvor offers lowest bids for Nov LNG deliveries information obtained from sources believed to be reliable and in good faith. Gunvor Singapore has placed the lowest bids at 14.28% for 8th -9th Nov’20 and at 13.84% for 18th -19th Nov’20 of 140,000 meters Such information has not been independently verified. each in response to an international tender last month by Pakistan LNG Limited. The News. icon represents the sole viewpoint of the KCCI R&D Cell, and is stated to enrich the readers' understanding of the news item. The