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Pakistan Daily Economy Update - 11 May

IM Insights
By IM Insights
6 years ago
Pakistan Daily Economy Update - 11 May

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  1. May . 11, 2018 KCCI - eBulletin Sindh unveils”July 1-September 30” budget The Sindh govt. has presented a deficit budget with a total outlay of PKR 1.14Tn for FY19, higher by 9%, with no new taxes and sought its authorization for only first three months until 30th Sep’18. In his budget speech, Sindh Chief Minister, Syed Murad Ali Shah, who also holds the portfolio of the Sindh Finance Minister, said that it is a PKR 20Bn deficit budget. Total receipts of the province for FY18 were estimated at PKR 1.03Tn with estimated expenditure at PKR 1.04Tn. Budgeted receipts for FY19 are PKR 1.12Tn, 9% higher than that for FY18. Receipts from the Federal Govt. on account of revenue assignment, straight transfers and grants are estimated at PKR 665.1Bn. Receipts from the Federal Govt. are 59.2% of the total provincial revenues. Receipts of the Federal PSDP are estimated at PKR 15Bn. Current expenditure including current revenue expenditure of PKR 773.2Bn and current capital expenditure of PKR 27.1Bn stands at PKR 800.3Bn. For FY19, the current expenditure constitutes 69.9% of the total provincial budget. BR. With no new taxes, Sindh does not introduce finance bill For the first time in history, the Sindh govt. has not introduced the finance bill along with the budget for FY19 in an apparent bid to show that it has not imposed any new tax. However, the provincial administration has ramped up revenue collection target by 23% to PKR 243.08Bn for FY19. For the current FY18, it has revised downwards the tax collection estimate to PKR 196.96Bn from the original target of PKR 199.62Bn. The province will continue to collect a large part of its target from the common man in the shape of indirect taxes; it will collect 85.03% (PKR 206.71Bn) in indirect taxes and a meagre 6.80% (PKR 16.55Bn) in direct taxes. The remaining 8.15% (PKR 19.81Bn) will be collected in non-tax revenue. The provincial govt. will remain largely dependent on federal transfers and grants from the divisible pool under the 7th NFC Award, foreign project assistance and bank borrowing to run its day-to-day business and continue development schemes. It has estimated to receive PKR 1.12Tn from different sources in FY19. Tribune. Provincial budget 2018/19: Sindh earmarks PKR 252Bn for development schemes The Sindh govt. has allocated PKR 252Bn under the Annual Development Program (ADP) for FY19, up a marginal 3.28% over the last year’s budget. 80% of this amount (PKR 202Bn) has been allocated for the ongoing development schemes, while remaining 20% is earmarked for the new schemes, which would be decided by the next govt. An additional PKR 30Bn has been allocated for district ADP. The govt. will allow release of 25% of the development budget for ongoing schemes in 1QFY19, to ensure continuity in development activities. The total development budget outlay for Sindh is PKR 343.90Bn of which, PKR 282Bn will be funded from provincial budget, PKR 46.89Bn from Foreign Projects Assistance (FPA) and PKR 15.02Bn will be provided by the federal govt. under PSDP. The News. PKR 7.3Bn allocated for 11 ongoing uplift projects in Karachi The Sindh govt. has allocated more than PKR 7Bn for Karachi’s 11 ongoing mega development projects. As per the policy of the Sindh govt., no sum has been reserved for any new development project in the provincial capital as the govt.’s term expires well before the commencement of new financial year. CM Shah said that out of the 14 schemes identified earlier under “Mega Schemes of Karachi”, 11 have been approved and are under way. They include the reconstruction of Tipu Sultan Road, construction of a bridge at Tipu Sultan and Khalid Bin Waleed intersections, reconstruction of Stadium Road, improvement of roads around Cantt Railway Station, the improvement of the road from Fuwara Chowk to Garden via Abdullah Haroon Road and back to Fuwara Chowk via Zaibunissa Road, and a bridge at intersection of Sunset Boulevard and Gizri Boulevard amongst others. Moreover, a sum of PKR 4.2Bn has been reserved for FY19 for the ongoing K-IV project PKR 3Bn have been allocated for the ongoing S-III project. The News. PKR 6.83Bn allocated for ongoing transport schemes Like other sectors, the transport sector also did not receive any new development schemes in the Sindh budget for FY19. For ongoing schemes of the transport and mass transit department, the Sindh govt. allocated PKR 6.83Bn in the ADP while, PKR 599.7Mn will be spent on transport schemes through foreign project assistance. No allocation has been made for the procurement of buses for the Green Line Bus Rapid Transit (BRT) scheme, as they would be procured under public-private partnership mode. The BRT is currently under construction with funds provided by the federal govt. Meanwhile, the provincial govt.-funded Orange Line BRT, will not see the light of day until Jun’19, according to the ADP document. The budget has also allocated funds for the Karachi Circular Railway (KCR), which was reflected in the 2017-18 ADP after a gap of several years. Fencing \ along the existing alignment of the KCR would be completed by Jun’19 at an estimated cost of PKR 230Mn. Tribune. Agriculture gets hefty subsidies in Sindh budget for FY19 The Sindh govt. has followed in the federal govt.’s footsteps in doling out hefty relief and subsidies to the agriculture sector in the budget for FY19. Current revenue expenditure on agriculture has been increased by 34% to PKR 10.36Bn against PKR.7Bn in FY18. A subsidy assistance of PKR 9.65Bn will also be provided to the farmers on tractors, agriculture implements, solar pumps, tube wells, etc. Tribune. Trade deficit widens 14% to $ 30.25Bn in July-April The country’s trade deficit widened by 14% to $ 30.25Bn during 10MFY18, although the govt. is optimistic that recovery in exports would ease pressure on external sector. PBS data shows that reached $ 19.21Bn in the period as against $ 16.89Bn in 10MFY17, up 14%. Interestingly, imports also rose by 14% to $ 49.45Bn as compared to $ 43.33Bn a year earlier, resulting in the trade deficit increasing by 14% to $ 30.25Bn. In Apr’18, exports increased by 19% to $ 2.13Bn from Apr’17 while imports rose by 3% to $ 5.1Bn. The News. Expats send home $ 16.26Bn in July-April FY18 The amount of money sent home by Pakistani migrants living abroad increased in 10MFY18 by 3.92%. SBP data shows that remittances totaled $ 16.26, compared with $ 15.64Bn in 10MF17. In Apr’18, the figure was $ 1.65Bn. Most remittances came from the UK and USA followed by countries in the EU. Pakistani expatriates working in Saudi Arabia sent home $ 4.09Bn during the period, 9.46% lower than that remitted in 10MFY17. The News. Miftah to wind up budget debate today Finance Minister Dr. Miftah Ismail will wind up the ongoing debate on budget FY19 in the National Assembly today (11th May). He has hinted at accepting an overwhelming majority of recommendations given by the Senate on the proposed budget but refused to accept the demands to cut petroleum levies. Out of 48 general consensus recommendations that the Senate has given, the finance minister has indicated accepting about 42 of them. BR/Tribune. System launched to control mobile theft, smuggling PTA has formally launched the Device Identification, Registration and Blocking System (DIRBS), a system meant to block smuggled and stolen handsets in the country. The DIRBS will enable users to pair their device with the CNIC, which would then become the phone’s identity. The PTA will carry out the task in two phases. In the first phase, the PTA will instantly disable stolen and snatched phones. In the second round, after one and a half months, it will make a list of smuggled mobiles. Tribune. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 10-May 115.62 117.75 0.00% -0.38% Crude (JU'18) 10-May 10-May 10-May 10-May PKR PKR Pts. $ Mn $/bbl 43,856 2.40 71.41 0.14% NM** 0.18% Gold (MY'18) Gold (10g) Local 10-May 10-May $/oz PKR 1,321.6 49,542 0.69% -0.17% Silver (MY'18) Cotton(KHI)-40 kg 10-May 10-May $/oz PKR 16.70 7,931 1.45% -1.33% Kibor-6M 10-May % 6.51 $ Bn 17.29 0.00% WoW -2.41% Remittances 4-May FY18 Jul-Apr 18 $ Bn 16.26 YoY 3.93% Exports* Imports* Jul-Apr 18 Jul-Apr 18 $ Bn $ Bn 19.21 49.45 13.68% 14.13% USD-Interbank USD-Open MKT KSE-100 index FIPI Forex Reserves Jul-Apr 18 Trade Balance* $ Bn -30.25 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; -14.41% -50.55% 4.44% Major Currencies 175 GBP, 10-May-18, 156.6 165 155 145 EUR, 10-May-18, 137.6 135 125 115 USD, 10-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 “It isn't what you earn but how you spend it that fixes your class.” Sinclair Lewis Chart of the Day SINDH BUDGETED RECEIPTS- FY19 (PKR BN) Public Accounts of the Province, 23 , 2% Carryover Cash Balance, 55 , 5% Other Receipts, 62 , 5% Current Revenue Receipts, 908 , 81% Current Capital Receipts, 76 , 7% Source: KCCI Research, Sindh Govt. 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