Pakistan Daily Economy Update - 17 April

Transcription

1. Apr . 17, 2018 KCCI - eBulletin Govt. sets growth target at 6.2% for 2018/19 The govt. has set 6.2% as growth target for FY19. A meeting of the Annual Plan Coordination Committee (APCC), headed by Minister for Planning Ahsan Iqbal, has forecasted average inflation for FY19 at around 6% as against the projected inflationary pressure of 4% for outgoing FY18. The govt. has projected the current account deficit (CAD) at $ 12.5Bn, equivalent to 3.8% of GDP, for FY19. The CAD was kept on the lower side with assumptions that the PKR would be hovering around 117 against the USD and imports would be curtailed after reduction in CPEC related imports. CAD for FY18 is expected to settle at $ 13.7Bn or 4.4% of GDP. Pakistan’s economy size is expected to touch PKR 38.31Tn in FY19 as against PKR 34.39Tn for FY18. The APCC fixed exports target at $ 27.3Bn for FY19 as against $ 24.5Bn in FY18. Imports are expected to go up to $ 56.5Bn in FY19, indicating that the trade deficit would widen to $ 29.2Bn. It set growth target for agriculture sector at 3.8%, industry 7.6% and services at 6.5%. Cash crops are expected to grow 3% and livestock by3.8%. Manufacturing sector is estimated to grow at 7.8% and LSM by 8.1% to materialize the industrial growth target of 7.6%. Moreover, the APCC has envisaged investment to GDP ratio at 17.2% in FY19, savings to GDP ratio is expected at 13.3% and foreign savings to GDP ratio is targeted at 3.8%. The News. Pakistan’s National Development portfolio faces cut of PKR 350Bn Pakistan’s National Development portfolio for FY19 faces an allocation cut of PKR 350Bn or nearly 17% due to shrinking fiscal space and approval of a new armed forces development plan. The APCC has recommended PKR 1.76Tn National Development Budget for FY18, as against PKR 2.11Tn for FY18. The federal govt.’s proposed development budget is Rs750Bn and combined development budget of the four provinces has been estimated at PKR 1.01Tn. Of the total amount, PKR 291Bn will be arranged from foreign lenders to finance the country’s development needs. The provincial Annual Development Plans of PKR 1.01Tn is PKR 99Bn or 8.9% less than FY18 while the proposed federal PSDP of PKR 750Bn is also PKR 251Bn or 25% less than FY18. However, the National Economic Council (NEC), which is headed by the PM, has the authority to increase the federal Public Sector Development Programme (PSDP). Tribune. Payment of tax and repatriation of liquid assets: Procedure announced The SBP has announced the procedure for payment and deposit of tax in US dollars and repatriation of liquid assets to Pakistan under the Foreign Assets Declaration and Repatriation Ordinance 2018. The procedure will be deemed to have come into force from 10th Apr’18. For taxpayers’ information and record, SBP will electronically send the confirmation of investment of the funds in govt. securities. Similarly, the taxpayer will get confirmation for the amount, if any, credited to his/her PKR account. BR. Non-filers will not be able to purchase property, says Miftah More stringent conditions are on the cards in the upcoming budget for non-taxpayers as the govt. has already imposed restrictions under which non-filers will not be able to purchase property from 1st Jul’18, PM’s Adviser on Finance Miftah Ismail said. He said that the outlay of the federal budget would be hovering around PKR 5.5Tn for FY19 and he would himself present the budget speech in the parliament. He said it is the moral and constitutional responsibility of the govt. to present the budget for the whole fiscal year as increase in salary, pension, defence allocation, FBR target and others budgetary issues could not be unveiled on four-month basis. The incoming govt. will have the power to amend anything as mini budget can be introduced if it wished to bring any change. The News. Miftah heads to Washington amidst strained ties Adviser to PM on Finance, Miftah Ismail will arrive in Washington on Apr.18, 2018 to attend spring meetings of the IMF and World Bank Group but is also likely to hold bilateral meeting with American officials. During his three-day stay in Washington, he is expected to make efforts to prevent Pakistan from being placed on the grey list of the Financial Action Task Force (FATF), by coming up with a plan that would be formulated and executed by Jun’18. Dawn. Crypto currencies: SBP bar credit positive: Moody’s Moody's Investors Service has said that the SBP’s decision to prohibit Pakistan's banks from dealing in virtual currencies or facilitating customers is credit positive because it shields them and other financial service entities from the significant risks that virtual or crypto currencies pose. In its research note entitled "State Bank of Pakistan prohibits banks from dealing in virtual currencies, a credit positive" Moody’s stated that there is no international consensus yet on how to best address the regulatory challenges associated with virtual currencies, and the SBP's actions are in line with those taken by other regulators worldwide. The SBP has not offered any authorization or license to individuals or entities to engage in any activity (issuance, sale, purchase, exchange or investment) in virtual \ currencies. BR. PD seeks additional PKR 200Bn to ensure smooth power supply The Power Division has reportedly sought an additional PKR 200Bn from the Finance Division for smooth power supply to consumers till Sep’18. The Finance Division will arrange this amount from commercial banks. Finance Division has recently released PKR 54Bn to the energy sector against total approved amount of PKR 80Bn. The major chunk of PKR 54Bn has been paid to PSO wither directly or indirectly, while Independent Power Producers (IPPs) which are selling electricity to the Central Power Purchasing Agency (CPPA) are actively seeking payment of remainder of the approved amount of PKR 26Bn. BR. Dry milk powder: KCCI chief for reduction in taxes on import President of the Karachi Chamber of Commerce and Industry (KCCI), Muffasar Atta Malik, has urged the govt. to reduce the exorbitant duties and taxes on the import of dry milk powder to increase import and effectively counter the rising smuggling of this essential household commodity. President KCCI said that dry milk powder is widely being smuggled through Chaman and Torkham borders without any check and balance. The import of dry milk powder is being subjected to 20% customs duty, 25% RD, 1% additional Customs duty, 6% income tax and other expenditures which have to be brought down. He stressed that the unjust regulatory duty on this product must be completely withdrawn as the fresh milk currently being produced in the country simply cannot cater to the overall demand for milk and its allied products, leaving no other choice but to go for importing dry milk from reliable foreign manufacturers. BR. NA body discusses draft Trade Dispute Resolution Act The National Assembly Standing Committee on Commerce and Textile has drafted the Trade Dispute Resolution Act, 2018. The bill is aimed at providing swift and effective resolution of disputes relating to exports as well as imports. Under the law, formation of a Trade Dispute Resolution Commission (TDRC) has been proposed that would work under the administrative control of Ministry of Commerce with same powers as vested in a civil court for swift and effective resolution of disputes relating to the export and import of goods and services including import and export through e-commerce. Under the Act, TDRC will be established with its headquarters at Islamabad and regional offices at provincial capitals. The Nation. National Savings launches scheme The govt. has formally launched a scheme aiming at payment of profit to disabled persons at par with Bahbood Savings Scheme. It had made an announcement about the scheme in budget FY18. Directorate of National Savings was entrusted with the task to frame rules under the guidance of Finance Division, which has been approved by the federal govt. and has been ere notified by the Finance Division on Apr. 16, 2018. It is estimated that around 192,000 disabled persons would benefit from the scheme. The Nation. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 16-Apr 115.61 116.65 0.00% -0.09% Crude (JU'18) 16-Apr 16-Apr 16-Apr 16-Apr PKR PKR Pts. $ Mn $/bbl 45,682 -39.45 66.30 -0.85% NM** -1.50% Gold (MY'18) Gold (10g) Local 16-Apr 16-Apr $/oz PKR 1,345.3 50,828 0.04% 0.42% Silver (MY'18) Cotton(KHI)-40 kg 16-Apr 16-Apr $/oz PKR 16.67 8,038 0.18% 0.00% Kibor-6M 16-Apr % 6.50 $ 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; -17.18% -50.03% 15.64% Major Currencies 175 GBP, 16-Apr-18, 165.4 165 155 145 EUR, 16-Apr-18, 143.0 135 125 115 USD, 16-Apr-18, 115.7 105 95 Apr-17 USD Jul-17 GBP EUR Oct-17 Jan-18 Source: KCCI Research ; Oanda.com Quote of the Day "Opportunities don't happen. You create them." Chris Grosser Chart of the Day PAKISTAN - PRODUCTION OF POL PRODUCTS (9MFY18) JET FUEL, 0.57, 8% KEROSENE & FURNACE OIL, 2.15, 28% MOTOR SPIRIT, 1.39, 18% HIGH SPEED DIESEL, 3.37, 45% *Figs in Mn Tons Source: KCCI Research, OCAC 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