Pakistan Daily Economy Update - 11 November

Transcription

1. Nov . 11, 2016 KCCI - eBulletin Trade deficit narrows 1.94% in Oct’16 Pakistan’s trade deficit narrowed 1.94% to $ 2.27Bn in Oct’16 over Sep’16 as exports increased 13.8% and imports rose 4.35%. In Oct’16, exports amounted to $ 1.75Bn as compared to $ 1.54Bn in the preceding month, while imports were recorded at $ 4.02Bn as against $ 3.85Bn. Data released by the PBS shows, trade deficit increased 22% to $ 9.31Bn in 4MFY17 as compared to $ 1.21Bn in 4MFY16 as compare to -7.68Bn in 4MFY16, exports decreased 6.31% and imports increased 8.6%. Tribune. Overseas workers: Remittances edge up to $ 1.5Bn in Oct’16 Overseas Pakistani workers have sent home $ 1.5Bn in Oct’16, slightly up by 1.2% compared to Oct’15. According to the SBP, the remittances that the country received in 4MFY17 stood at $ 6.25Bn, down 3.82% compared with $ 6.50Bn in 4MFY16. However, the flow of remittances in Oct’16 was much better than the previous month when it slowed down significantly by 9.3% compared with Sep’15. Tribune. ‘Perception changes once German investors come to Pakistan’ The German envoy to Pakistan acknowledged that it was difficult to bring German investors to Pakistan but with improved law and order situation things are likely to change. German Ambassador Ina Lepel has said that once investors visit Pakistan, their perception changes. She hoped businessto-business meetings and exchange of delegations will boost economic cooperation between the two countries. She went on to add that German companies are keen to participate in CPEC. Dawn. Pakistan Development Update’: World Bank projects economy will grow at 5%, Miss govt. target WB has projected Pakistan’s economy to grow at 5% in the ongoing fiscal year, which means that the country will miss the govt.-set target of 5.4%.The Washington-based lender added that the country’s economy could see a growth of 5.4% in FY18 on the back of continued mushroom growth in the services sector, recovery of agriculture and uptick in infrastructure investment. The investment-to-GDP ratio would increase to 14.4% in FY17 and 14.6% in FY18 from 14% in last 2 years. The low investment-to-GDP ratio is expected to increase due to infrastructure projects under CPEC and other public investment. The projects are expected to accelerate growth in the domestic construction industry and expand electricity generation, if delivered on schedule. Tribune. Canadian HC sees tremendous potential for enhancing trade On his visit to the Karachi Chamber of Commerce and Industry (KCCI), Canadian High Commissioner Perry Calderwood has said that there is a tremendous potential to enhance trade between Pakistan and Canada as both countries have significant trade volume and longstanding economic relationship. The High Commissioner further said that both countries can enhance their trade and investment cooperation in sectors including agriculture, renewable energy, oil & gas, mining and infrastructure etc, particularly in Karachi and also in Sindh. President KCCI Shamim Ahmed Firpo stated that Pakistan and Canada share longstanding economic and political relations by working together in various fields. The Nation. Forex reserves fall to $ 24.15Bn Pakistan’s foreign exchange reserves declined $ 36Mn to $ 24.15Bn during the week ended 4th Nov, 2016, as compared to $ 24.18Bn in the previous week. The foreign exchange reserves held by the SBP fell to $ 19.07Bn from $ 19.13Bn a week ago. The forex reserves of commercial banks amounted to $ 5.07Bn. The News. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank List of Indicators 10-Nov PKR 104.71 0.00% USD-Open MKT 10-Nov PKR 106.00 0.09% KSE-100 index FIPI 10-Nov 10-Nov Pts. $ Mn 42,704 -3.71 1.19% NM** Crude (DE'16) 10-Nov $/bbl 44.52 -1.68% Gold (NO'16) 10-Nov $/oz 1,256 -1.48% Gold (10g) Local 10-Nov PKR 44,742 0.97% Silver (NO'16) 10-Nov $/oz 18.56 1.00% Cotton(KHI)-40 kg 10-Nov PKR 6,522 0.00% Kibor-6M 10-Nov % 6.07% 0.01% 4-Nov $ Bn 24.15 -0.15% Remittances Jul-Oct 16 $ Bn 6.26 -3.82% Exports* Jul-Oct 16 $ Bn 6.43 -6.60% Imports* Jul-Oct 16 $ Bn 15.75 8.01% Trade Balance* Jul-Oct 16 $ Bn -9.32 -21.07% Current Account Avg. CPI-FY17* Jul-Sep 16 Jul-Oct 16 $ Mn % -1,368 3.95 -136.27% WoW Forex Reserves YoY Oct-16 Discount Rate % 5.75 Sources: KCCI Research, PMEX (2 AM) , NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year Major Currencies 175 165 Circular debt in power sector: Govt. could not repay bank loans of PKR 136.5Bn Govt. has failed to return loans of PKR 136.5Bn that it had obtained from banks to retire circular debt in the power sector, which forced the ECC of the cabinet to roll over the debt for 2 more years. According to the MoF, the main reason for the failure to repay the loans was the postponement of privatisation process of power distribution companies. Tribune. 155 FTA with China helped exports tremendously, says Dastgir Commerce Minister Khurram Dastgir has said that the FTA with China has helped Pakistan’s exports tremendously. According to the commerce minister, Pakistan’s FTA with China signed in 2006 resulted in concessions on the import of raw material for exportable products. He further assured business representatives there is no threat of the rollback of Pakistan’s GSP+ status granted by the European Union following Brexit. Dawn. 115 WB urges Pakistan, India to agree on mediation The World Bank has urged India and Pakistan to agree to mediation in order to settle on a mechanism to resolve issues regarding two dams under construction along the Indus river system. The Bank released a statement in which it appealed both the countries that it was responding to their separate proceedings initiated under the Indus Water Treaty 1960. The News. Tractor industry: Govt. asked to clear refunds of PKR 3Bn The Pakistan tractor industry has urged the govt. that the piling up of sales tax refunds has become a major concern for tractor manufacturers as it continues to nullify the impact of supportive measures taken by the govt. to improve financial health of the farming community. Tractor manufacturers are charging a reduced 5% sales tax on the sale of tractors against 17% input tax being paid on the purchase of components both at domestic and import stages so the input tax is much higher than output tax therefore, refunds are consistently mounting. Tribune. Power bills: MoF opposes PKR 50Bn waiver to Sindh govt. Finance Ministry has opposed waiving off PKR 50Bn to Sindh govt. through an agreement tailored by the Water and Power Ministry; saying that the proposed settlement will create a precedent for other provinces. As per the decision of Council of Common Interests (CCI), at source deduction of reconciled bills of Discos and govt. receipts has to be made by the Federal Adjuster which is being implemented. The current arrangement agreed with Sindh govt. is a deviation from the decision of the CCI and thus is not legally tenable. The rationale of the proposed settlement has not been clearly spelt out, and neither any rule nor policy suggests writing off PKR 50.18Bn out of arrear amount of PKR 77.54Bn or 65% of the due amount. BR. PKR 3.62Tn collection target unrealistic: FBR chief briefs Senate body Chairman FBR Nisar Muhammad Khan, while terming the revenue collection target of PKR 3.62Bn as unrealistic, has informed the Finance Standing Committee that the FBR has so far no plan to enhance customs duty on the import items during the ongoing FY17. During the proceedings of the Committee, the FBR Chairman dropped a hint that FBR might like to see increased sales tax rate on petroleum (POL) products as its revenue collection declined because of one-fourth reduction in tax collection on petrol and diesel. The FBR's collection stood at PKR 625Bn during 1QFY17, achieving growth of 6% against desired target of over 18%. BR. NAB recovers PKR 3.59Bn from 9 RPPs: PAC panel told The National Accountability Bureau (NAB) has so far made a recovery of PKR 3.59Bn from nine Rental Power Projects (RPPs). However, the NAB failed to recover outstanding mobilization advance from three companies, including Karkey, Piranghaib and Sharaqpur Rental Power Projects, according to a NAB report submitted to a sub-committee of the Public Accounts Committee (PAC). Around PKR 985Mn have been recovered in RPP Naudero-I case; PKR 785 Mn from RPP Sahiwal; PKR 1,283 Mn from Samundri RPP; PKR 69.26Mn from Guddu RPP; PKR 47.78Mn from Naudero-II; PKR 279.85Mn from M/s Reshma Power RPP; PKR 142.23Mn from Bhikki RPP; PKR 225Mn from Gulf Rental; and PKR 50 Mn from M/s Young Gen. BR. 7,500MW add’l power from private sector by ‘18 Private Power and Infrastructure Board (PPIB) Managing Director has disclosed that electricity generation from private sector in Pakistan constitutes around 47% of the total installed capacity and 31 IPPs of 9,048MW are currently supplying power to the national grid. Currently PPIB is processing 29 projects with the capacity of 17,550MW which will be coming online during 2017–2024. As per commitment of the present government, projects are now being processed on cheaper fuels like hydro, coal and RLNG. The Nation. 500-point rally tosses index to new peak As the fears over the Trump Triumph and its immediate impact subsided, global stock markets rebounded. The relief rally at the PSX on Nov 10th 2016 was outstanding with the KSE-100 index posting gains of 500.34 points (1.19%) to close at new all-time high 42,703.99. Regarding major contributions to the KSE-100 index gains UBL jumped 3.69%, HBL 2.12%, POL 3.37%, MLCF 5% and LUCK 1.76%, together added 228 points to the index. Dawn. 145 GBP, 10-Nov-16, 131.4 135 125 EUR, 10-Nov-16, 115.1 105 USD, 10-Nov-16, 105.5 95 85 75 Nov-15 Feb-16 USD May-16 GBP Aug-16 Nov-16 Source: KCCI Research ; Oanda.com EUR Quote of the Day “The highest stage of man's ethical progress is reached when he becomes absolutely free from fear and grief.” Muhammad Iqbal Chart of the Day Pakistan's Trade Snapshot 20.00 15.00 10.00 14.64 16.79 14.46 8.58 8.20 7.97 14.56 6.88 15.75 6.43 5.00 0.00 -5.00 -10.00 -6.44 -5.88 -8.81 -7.68 -9.32 -15.00 4MFY13 4MFY14 Exports 4MFY15 4MFY16 Imports Trade Deficit 4MFY17 Source: KCCI Research, PBS Value in $ Bn 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