Pakistan Daily Economy Update - 13 April

Transcription

1. Apr . 13, 2018 KCCI - eBulletin Moody’s optimistic about Amnesty’s prospects Moody's Investors Service has said that if Pakistan's tax-amnesty scheme remains successful, it would increase the govt.'s revenue base and alleviate fiscal pressure from its low revenue generation capacity and increasing capital expenditures for the CPEC. In its latest report about Pakistan, Moody's stated that the amnesty scheme is part of the govt.'s broader tax reform package. It further states that capital inflows resulting from the repatriation of liquid foreign assets would also ease balance-of-payment pressure in the last few months of the FY18, which ends in Jun.’18. BR. CJP hints at reviewing new amnesty scheme The Supreme Court has hinted at reviewing the recently announced tax amnesty scheme which seeks to regularize Pakistanis' properties and money stashed abroad. Chief Justice Mian Saqib Nisar, heading a three-judge bench hearing a property dispute case, said that the court is seriously considering the matter of Pakistanis' properties and bank accounts in foreign counties and will examine the amnesty scheme. BR. SBP bars remittances in forex accounts of non-filers The SBP has directed banks not to receive remittances into the foreign currency accounts of non-filers of returns under a new law unveiled early this week to nail tax evaders. In a statement, it said that the foreign currency account of a citizen of Pakistan, resident in Pakistan, can be fed with cash foreign currency only if the accountholder is a filer as defined in Income Tax Ordinance 2001. The decision has been taken in line with the recently promulgated Protection of Economic Reforms (Amendment) Ordinance 2018. The News. Pakistan’s salaried class exempted from tax audit The govt. has announced that the salaried class would be completely exempted from tax audit and companies would be picked only once in three years provided they fall on the risk parameters determined for selecting audit cases. While selecting about 45,000 new cases for audit through computer balloting, Assistant to the PM on Revenue Haroon Akhtar announced that those taxpayers would also be exempt from audit who came under the final and presumptive tax regime. The balloting was held for TY16. Against the govt.’s decision to pick 7.5% of return filers for tax audit, the FBR selected less than 4%. With the selection of new audit cases, total outstanding cases have inched closer to 1Mn, a staggering number as the FBR does not have the capacity to handle this backlog. Tribune. Presentation of budget hangs in the balance Presentation of the federal budget for FY19 hangs in balance after the opposition parties conveyed to the govt. that either it should not present the budget or get authorization for four month budget from the Parliament. This implies that whatever party comes in power after the general elections, it will have the choice to present a new budget or make amendments in the existing one. BR. Budget 2018-19: PKR 219Bn subsidy on the cards The govt. is likely to allocate PKR 219Bn subsidy for FY19 with PKR 119.4Bn earmarked for power sector. The Finance Ministry has also proposed a subsidy ceiling of PKR 6Bn for govt. equity in DISCOs through Power Holding Pakistan Limited (PHPL). BR. Sale of KES stake in KE: Cabinet ratifies CCoP decision The federal cabinet has ratified the decision of Cabinet Committee on Privatization (CCoP) for issuance of National Security Certificate (NSC) for sale of KES 66.40% shares in K-Electric to Shanghai Electric Power. BR. Chinese company to set up oil refinery Power China International Group Limited (PCGIL), a Chinese state owned company, is to set up an upcountry deep conversion oil refinery with an investment of $ 7Bn - 8Bn under PPP model. A meeting of the cabinet approved signing of MoU between PSO and PCGIL for the establishment the refinery with capacity of 250,000-300,000 bpd to be located in Punjab under PPP model. BR. Power sector receivables cross PKR 805Bn mark The country's power sector receivables crossed PKR 805Bn as of Jan. 31, 2018 compared to PKR 730Bn as on Jun. 30, 2017, showing an increase of over 10% in 7MFY18. Discos' collection registered a 10.3% decline to PKR 655.94Bn against billing of PKR 731.71Bn. The volume of receivables against provinces has increased to PKR 139.38Bn as compared to PKR 115Bn on Jun. 30, 2017. BR. \ Privatization of PIA: Don’t do it without SC permission, govt. told Economic Indicators List of Indicators Date / Period Unit Value Change Daily 12-Apr 115.61 116.55 0.00% 0.17% Crude (JU'18) 12-Apr 12-Apr 12-Apr 12-Apr PKR PKR Pts. $ Mn $/bbl 46,332 6.35 66.98 -0.33% NM** 0.43% Gold (MY'18) Gold (10g) Local 12-Apr 12-Apr $/oz PKR 1,334.6 50,641 -1.41% -0.03% Silver (MY'18) Cotton(KHI)-40 kg 12-Apr 12-Apr $/oz PKR 16.45 8,038 -1.32% 0.00% Kibor-6M 12-Apr % 6.49 $ Bn 17.64 -0.01% WoW -0.88% Remittances 6-Apr FY18 Jul-Mar 18 $ Bn 14.61 YoY 3.55% Exports* Imports* Jul-Mar 18 Jul-Mar 18 $ Bn $ Bn 17.08 44.38 13.08% 15.57% USD-Interbank USD-Open MKT KSE-100 index FIPI Forex Reserves Jul-Mar 18 Trade Balance* $ Bn -27.30 Jul-Feb 18 Current Account $ Mn -10,826 Foreign Direct Inv. $ Bn 1.94 Jul-Feb 18 Jul-Feb 18 LSM Growth* % 6.24 % 3.20 Jul-Mar 18 Avg. CPI Discount Rate % 6.00 Mar-18 WoW= Sources: KCCI Research, PMEXweek , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Major Currencies 175 GBP, 12-Apr-18, 164.3 165 155 145 EUR, 12-Apr-18, 142.8 135 125 115 USD, 12-Apr-18, 115.7 105 95 Apr-17 Jul-17 GBP USD EUR Oct-17 Jan-18 Source: KCCI Research ; Oanda.com Quote of the Day "The road to success and the road to failure are almost exactly the same." Colin R. Davis The Supreme Court has directed the govt. not to privatize PIA without its prior permission. The Attorney General of Pakistan informed the court that no privatization of PIA is taking place and even if that happens then 51% share of national flag carrier will still be with the govt. BR. SBP's reserves dip another $ 164Mn, now stand at $ 11.4Bn Foreign exchange reserves held by the SBP continued to remain under pressure, shrinking 1.4% on a weekly basis. The fall marks the 17th successive week of decline, fuelling concern over Pakistan’s ability to meet future payment obligations and manage a bulging current account deficit. On 6th Apr’18, foreign currency reserves held by the central bank were recorded at $ 11,438.3Mn. Net reserves held by banks amounted to $ 6,201.5Mn. Overall, liquid foreign reserves held by the country stood at $ 17,639.8Mn. Tribune. -17.18% -50.03% 15.64% Chart of the Day Remittances received by Pakistan (9MFY14-9MFY18) 16.00 13.59 14.39 14.11 9MFY16 9MFY17 14.61 14.00 Karachi-Chabahar ferry announced Vowing to increase trade relations through land, sea and air between Pakistan and Iran, Ports and Shipping Minister Hasil Bizenjo has announced the launch of a ferry service between Karachi and the Iranian port city of Chabahar. While Iran is fully prepared, Pakistan will launch the service after clearance from a few departments. Welcoming the ferry between Karachi and Chabahar, Iranian Minister Abbas Akhundi, who is heading 22 members delegation on a three-day official visit to Pakistan, has hoped that the service would include Gwadar, Khorramshahr and other port cities. Dawn. 11.59 12.00 10.00 8.00 6.00 IMF head warns China on exporting debt through “Silk Road” The IMF has warned China about saddling other countries with a problematic increase in debt, and creating balance of payment challenges for them through its ambitious global trade infrastructure projects spanning dozens of countries from Asia to Africa and Europe. Some countries like Sri Lanka have already ended up deeply in debt and have been left with little choice but to turn over crucial assets to Beijing as way to restructure the loans. BR. 4.00 2.00 0.00 9MFY14 Pakistan allows 8 new entrants in auto sector The govt. has approved eight applications of new entrants who want to set up vehicle assembly plants in Pakistan. This was informed by a representative of the Engineering Development Board (EDB) during an open hearing on the Automobile Sector in Pakistan organized by the Competition Commission of Pakistan (CCP). This would result in considerable FDI in the country creating more jobs. However, the CCP noted that it continues to receive concerns and complaints regarding the pricing of locally made cars, safety features, technological issues, delivery of vehicles, payment of premiums, and progress on localization of auto industry and deletion programs. The CEO of Indus Motor Company said that the issue of premium was equally disturbing for his company and they would support all initiatives to curb the practice. Daily Times. 9MFY15 Values in $ Bn 9MFY18 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 R&D Dept. bears no responsibility for its correctness or accuracy. Contact: res@kcci.com.pk