Pakistan Daily Economy Update - 15 November

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1. Nov . 15, 2016 KCCI - eBulletin World Bank economist lists factors behind un-competitiveness As per the World Bank report on “Pakistan Development Update”, lead country economist has said that Pakistan's decline in competitiveness has been driven by poor trade facilitation, infrastructure gaps, inefficient logistics and a poor investment climate. He further stated that Pakistan revenue collection as percentage to GDP is one of the lowest in the world. However, it is hoped that inflation will remain in single digit, growth would accelerate while there are little or no chances in remittances fall. The WB official stated that falling exports and stagnant investment rates are still challenges to the economy. After achieving macroeconomic stability, the govt's structural reforms program is progressing but there is much more to do. BR. Refunds being paid to all claimants: Dar Finance Minister Ishaq Dar has inaugurated the "Module for Direct Electronic Transfer of Refunds" for payment of Refund Payment Orders (RPOs) issued up to Jun. 30, 2016, amounting to PKR 25Bn. Addressing a ceremony, Finance Minister said that the refunds are being paid to all claimants whether they are exporters or belong to any other sector while any restrictions on the limits of the refunds have also been removed. For the first time, the refunds are being paid through direct electronic transfer through the SBP's RTGS system. It will not only ensure credit of refunds within 24 hours, sometimes even on the same day, but also will eliminate human interaction through online payments. FBR has cleared the sales tax refund claims worth PKR 21Bn, which will be electronically transferred into the accounts of taxpayers within the next 24 hours. Moreover, PKR 25Bn worth of refund claims were pending from Jun’15 to 30th Jun’16. Claims for PKR 21Bn had been processed, while those of around PKR 3.5Bn would be transferred into the accounts of respective taxpayers within a week by addressing all the issues and modalities. BR/The News. Supply of 92 RON gasoline starts today Since the new specifications for the import of motor gasoline has been set at 92 research octane number (RON) from 87, Hascol's first ship carrying 25,000 metric tonnes of 92 RON would be berthing at the Karachi Port today (15th Nov’16). The category would be marketed under the brand name of 'Super Tiger XT'. Daily Times. Budget 2016-17: decision against proposed gas tariff raise could pose challenge The govt. may have to adjust as much as PKR 60Bn in the budget for FY17 if it decides against the proposed 12% increase in tariff as determined by the OGRA. As per law, the govt. is required to give reasons along with details of financing to the regulator if it chooses not to implement the determination of the regulator. Under the license contracts, one clause stipulates that Ogra; from time to time and in accordance with the rules; determines total revenue requirement of the Licensee to ensure a 17% return for SSGCL and 17.5% for SNGPL (before financial charges and tax) on the value of its average net fixed asset in the operation of each financial year. BR. Govt not withdrawing PKR 5, 000 banknote: Dar Through a press release, Finance Minister Ishaq Dar has dispelled the impression that the government was considering demonetization of PKR 5, 000 currency notes and withdrawal of PKR 40, 000 prize bonds. Dawn. KCCI seeks extension in filing of income tax returns KCCI President Shamim Ahmed Firpo has requested the FBR to extend the last date for filing of income tax return up to Dec 31st 2016, as many filers would not be able to submit their returns due to slow processing and persisting errors. Daily Times. Process to make electricity cheaper to start in 2017 Minister of State for Water and Power has said that the govt. is fully committed to honor its promise to eliminate load-shedding by 2018, while the process to make it cheaper will start in 2017. He said power production had increased from 13,500 to 17,000MW due to government’s efforts while in Oct’18 another 8,000 to 10,000MW would be added to the system, which would be sufficient to meet the country’s needs. The govt. was not only constructing power plants but a transmission line from Mitiari to Lahore would also be laid. Tribune. Seedless kinnows snatch Pakistan’s market The demand for Pakistani oranges (kinnows) has dropped in overseas markets as India, Turkey and Egypt have started producing seedless kinnows. The demand for seedless kinnows remains high, especially in the West, but unfortunately Pakistan does not produce such varieties. Pakistani farmers must start seedless kinnow production, so that exporters could be able to penetrate EU markets. By introducing other varieties Pakistan could generate over $ 1Bn through exports every year. Tribune. Economic Indicators Date / Period Unit Value USD-Interbank List of Indicators 14-Nov PKR 104.82 0.11% USD-Open MKT 14-Nov PKR 104.30 -1.61% KSE-100 index FIPI 14-Nov 14-Nov Pts. $ Mn 42,526 6.76 -0.75% NM** Crude (DE'16) 14-Nov $/bbl 44.10 -3.23% Gold (DE'16) 14-Nov $/oz 1,219 -0.41% Gold (10g) Local 14-Nov PKR 43,542 -2.21% Silver (DE'16) 14-Nov $/oz 16.84 -2.88% Cotton(KHI)-40 kg 14-Nov PKR 6,522 0.00% Kibor-6M 14-Nov % 6.07% 0.00% 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 (02:00 am) , NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year Major Currencies 175 165 155 145 GBP, 14-Nov-16, 131.5 135 125 115 EUR, 14-Nov-16, 113.1 USD, 14-Nov-16, 105.0 105 95 85 75 Nov-15 Feb-16 USD NA body to settle tiff over pricing, shortage of drugs As the controversy relating to pricing of drugs refuses to die down, causing serious shortages of essential drugs in the country, the National Assembly’s standing committee on health services will act as a mediator among drug manufacturers, the health ministry and DRAP to resolve the issue. A number of drugs, including some life-saving ones, are running in short supply as manufacturers say stagnant, low prices have rendered their local production unfeasible. These medicines are prescribed for treating epilepsy, thyroid disease, neurological disorders, etc. Some of the drugs in shortage are Actifed P, Cafcol, Panadol CF, Benadryl and Benatus syrups, Ventolin tablets (40mg), Flagyl, Freccium, Nicotex, etc. Dawn. Fraudsters manipulating share prices by misusing social media Taking advantage of China's flagship investment projects in Pakistan, tricksters are misleading equity investors by spreading false news on social media about probable heavy investment or acquisition of Pakistani ventures by Chinese investors, it is learnt. As a result, in the local equity markets, share prices of some companies have been rising rapidly without any concrete developments that might impact on the share prices. In this regard, SECP has cautioned general public yet again that fraudsters are manipulating share prices by spreading false and misleading information through social media, SMS and emails. Daily Times. May-16 GBP Aug-16 Nov-16 Source: KCCI Research ; Oanda.com EUR Quote of the Day “The ultimate aim of the ego is not to see something, but to be something. “ Real estate tax amnesty to discourage law-abiding citizens A parliamentary body has proposed the govt. to grant one-time tax amnesty to real sector’s investors. Under the proposal, a fixed 3% tax on the difference of declared value and valuation table of the FBR will be introduced. However, the tax amnesty scheme as proposed by the lawmakers to bring of multibillion dollars of informal property transactions into the tax net will set a wrong trend and discourage law-abiding citizens. The News. Audi AG expresses intent to assemble vehicles in Pakistan In the latest development, German carmaker Audi AG has expressed its interest in setting up an assembly plant in Pakistan and, through its authorized importer in the country, submitted a letter of intent to the Board of Investment (BoI) for consideration. Land for the plant has been purchased in Korangi, near one of Pakistan’s biggest industrial estates, and would mean a fresh investment of over $ 30Mn. Tribune. Change Daily Muhammad Iqbal Chart of the Day QUATERLY DEBT SNAPSHOT OF PAKISTAN (1QFY12 -1QFY17) 5.52 1QFY17 1QFY16 4.95 1QFY15 4.84 1QFY14 4.84 12.71 11.10 10.15 4.63 1QFY13 8.12 4.23 1QFY12 0.00 14.39 2.00 4.00 6.22 6.00 8.00 External Debt (PKR Tn) 10.00 12.00 14.00 16.00 Domestic Debt (PKR Tn) Source: KCCI Research, SBP Disclaimer This report has been prepared by KCCI Research & Development Cell. The information contained Jul.-Sept.’16 PKR 38.6Bn statistical discrepancy in budgetary operation herein have been compiled or arrived at based upon information obtained from sources believed Finance Ministry has reported a PKR 38.56Bn statistical discrepancy in budgetary operation for 1QFY17. A summary of consolidated to be reliable and in good faith. Such information has not been independently verified. federal and provincial budgetary operation shows that a budget deficit of 1.3% has been recorded during the period under review. The provinces provided a budget surplus of PKR 80Bn to the federal govt. with Punjab adding PKR 49Bn followed by Sindh with PKR 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 31Bn, and PKR 24Bn by Balochistan. The govt. of KPK has exceeded its expenditure by PKR 25Bn during 1QFY17 with highest accuracy. Contact: res@kcci.com.pk development spending of over PKR 24Bn after Punjab during the first quarter. BR.