Pakistan Daily Economy Update - 11 June

Transcription

1. Jun . 11, 2016 KCCI - eBulletin Around PKR 850Bn Sindh budget today Sindh Finance Minister Murad Ali Shah is likely to present around PKR 850Bn provincial budget for FY17 in the assembly on Jun. 11, 2016 (today) where annual development outlay may stand at PKR 264Bn including PKR 25Bn for districts, PKR 28Bn from the FPA, and PKR 12.013Bn from the federal PSDP. An increase of 10% to 20% may also be announced in the salaries of govt. employees. The budget would comprise of special development package of PKR 10Bn for Karachi, PKR 150Bn for education department and PKR 55Bn for health sector. The upcoming budget would also include PKR 70Bn for the law and order while provincial govt. would also announce new recruitments of over 20,000 personnel in police department. BR. Budget Fiscal Year 2017: govt. open to suggestions: Dar Finance Minister Ishaq Dar has said that the govt. is open to suggestions and any changes/improvements in the budget proposals would reflect govt.'s will to facilitate different sectors of the economy to the maximum extent possible. The Minister also directed Finance Ministry and FBR teams to continue to take guidance from the Parliamentary budget debate and make recommendations for adoption of positive and forward looking proposals. BR. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank List of Indicators 10-Jun PKR 104.24 -0.16% USD-Open MKT 10-Jun PKR 104.70 -0.19% KSE-100 index FIPI 10-Jun 10-Jun Pts. $ Mn 36,941 -3.05 -1.27% NM** Crude (JU'16) 10-Jun $/bbl 51.11 1.27% Gold (MY'16) 10-Jun $/oz 1,272.2 0.11% Gold (10g) Local 10-Jun PKR 41,528.00 0.62% Silver (MY'16) 10-Jun $/oz 17.29 0.00% Cotton(KHI)-40 kg 10-Jun PKR 6,039 0.00% Kibor-6M 10-Jun % 6.12% -0.01% 3-Jun $ Bn 21.26 -1.57% Jul-May 16 $ Bn 17.84 5.58% Jul-May 16 $ Bn 19.15 -12.39% Jul-May 16 $ Bn 40.32 -2.74% Trade Balance* Jul-May 16 $ Bn -21.17 -7.28% Current Account Avg. CPI-FY16* Jul-Apr 16 Jul-May 16 $ Mn % -1,519 2.82 17.71% WoW Forex Reserves Input tax adjustment: provincial tax authorities to brief Senators Finance Standing Committee has decided to take a briefing from Revenue Authorities of the provinces to understand Remittances their viewpoints on disallowing input tax adjustment on sale tax against provincial services. The Committee’s meeting Exports* also took a briefing from Member Customs and sale tax on the amendments in the Finance Bill 2016 in order to consider Imports* Senators' recommendations regarding budget for FY17. BR. No new tax amnesty on the cards: Senate body told In response to Senate panel’s proposal, Finance Secretary has informed Finance Standing Committee that govt. has no plans to introduce any fresh tax amnesty scheme for whitening black money or illegal wealth. One of the Senators had underscored the need for introducing a fresh scheme to regularize black economy by paying 2% tax. The Finance Secretary further said that the govt. introduced Voluntary Tax Compliance Scheme for traders after hectic parleys and it was extended up to Jun. 30, 2016 but now onwards a differentiation of the filer and non-filer would be continued where non - filers would have to bear the cost of remaining outside the tax net. BR. Trade deficit widens 8% to $ 21Bn The country’s trade deficit amounted to $ 21.16Bn in 11MFY16, higher by 8% as compared to $ 19.59Bn a year earlier. According to the PBS, Pakistan’s exports declined by 12.37% to $ 19.15Bn, while imports slid to 2.74% to $ 40.32Bn in 11MFY16. Whereas, the country’s trade deficit amounted to $ 19.59Bn in the same period a year ago. The News. Textile exporters demand issuance of zero-rating SRO Despite an announcement, the failure to issue a notification that a zero-rated tax regime had been reinstated for the five major export oriented sectors, including textile, by the federal government got exporters into trouble. Textile exporters were caught by surprise to find out that the notification had still not been issued despite Federal Minister of Finance Muhammad Ishaq Dar making a commitment to that effect with exporters before the annual budget this year. Daily Times. YoY May-16 Discount Rate % 5.75 Sources: KCCI Research, PMEX (At 4:00PM), NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year Major Currencies 175 165 GBP, 10-Jun-16, 148.8 155 145 135 EUR, 10-Jun-16, 116.7 125 115 105 95 USD, 10-Jun-16, 103.3 85 75 Jun-15 Sep-15 USD Dec-15 GBP EUR Mar-16 Jun-16 Source: KCCI Research ; Oanda.com Quote of the Day Remittances reach $ 17.84Bn in 11MFY16 Overseas workers remitted to $ 17.84Bn to Pakistan during the 11MFY16, up 5.6% as compared to $ 16.9Bn in 11MFY15. According to the SBP, the govt. set the remittances target of $ 19Bn for the outgoing fiscal year, it is confident to achieve “Do not eat up each other’s property by false means, nor approach this target despite challenges. The inflow of worker’s remittances amounted to $ 1.8Bn in May, 8.6% more than Apr’16 with it the authorities to eat up a portion of the property of the people and 8.2% higher than May 2015. The News. Growers exempted from withholding tax FBR has exempted growers from withholding tax on sale of agriculture produces. According to the FBR, a person who purchasing agricultural produce through a commission agent will be required to deduct advance tax at the rate of 10% on the amount of commission paid to the agent and tax under section 153(1)(a) will not be deductible on such transactions. However, this special exemption from withholding tax is not available on the purchase of agricultural produce from commercial traders. The News. Infrastructure development: ADB approves $ 100Mn loan for M-4 motorway The Asian Development Bank (ADB) has approved a $100Mn loan for building a motorway in Punjab, a key part of the corridor aimed at connecting the port city of Karachi to the province and Afghanistan. Britain’s Department for International Development (DFID) has also committed a $ 34Mn grant for the project. The ADB will act as the lead financier and administer both the AIIB loan and the DFID grant. ADB President Takehiko Nakao has said that the project has strategic value for Pakistan as it supports north-south connectivity, new trade, and business opportunities, which will boost jobs and cut poverty. Tribune. sinfully, while you know (that you are unjust in doing so).” Qur’an 2:188 Chart of the Day Pakistan's Top 10 Importing Countries (10MFY16) 7.00 6.50 6.00 5.00 4.95 4.00 3.00 2.48 1.72 2.00 1.00 Auto sector: Car sales jump 24% in July-May Local car sales including light commercial vehicles, vans and jeeps have jumped by 24% during 11MFY16 as compared to 0.00 the 11MFY15. Local vehicle sales stood at 201,151 units in 11MFY16, against 162,151 units in the same period of last year. Amongst individual companies, Pak Suzuki’s sales increased 33% YoY to 118,629 units in 11 months. Whereas, Indus Motor has sold 58,531 units in July-May 2015-16 as compared to 51,485 units last year and Honda Atlas Cars sold 23,800 units in the same period as compared to 21,134 units in 11MFY15. Tribune. Value in $ Bn Dairy sector: European envoys caution Dar against new taxes Swiss Embassador Marc George and Dutch Embassador Mrs Renate Pors have cautioned Finance Minister Ishaq Dar that proposed 17% sales tax on inputs of dairy sector could threaten both the existing as well as planned $ 500Mn foreign investment in the sector. The Dutch Ambassador also cautioned the Minister that Dutch companies' may reverse investment decision in Pakistan. In response, Finance minister apprised the European diplomats that he was under pressure from various stakeholders to change the tax regime of the dairy sector. Dar promised to review the possibility of giving a relief but did not make a firm commitment. Tribune. 1.55 1.16 1.15 1.04 1.00 0.79 Source: KCCI Research, SBP 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