Pakistan Daily Economy Update - 2 June

Transcription

1. Jun . 2, 2016 KCCI - eBulletin Dar to launch Economic Survey for FY16 today Federal Minister for Finance Ishaq Dar is going to launch Economic Survey for 2015-16 today afternoon in which he will throw light on macroeconomic performance achieved by the country in outgoing financial year. The Economic Survey for FY16 will incorporate poverty level at 29% population in accordance with recently adopted new methodology by Pakistan in complete consultation and validation of the World Bank. Although, the govt. missed out GDP growth, investment and savings targets but the country achieved 4.7% growth in outgoing fiscal year, which was highest in last eight years. Pakistan’s per capita income has gone up to $ 1,561 in FY16 as against $ 1,517 per person last year, registering an increase by just 2.9% in outgoing financial year ending on June 30, 2016. The News. Finance bill to bestow special powers to ECC The Finance Bill 2016 will reveal special powers to the Economic Co-ordination Committee (ECC) to grant tax exemptions in matters relating to International Financial Institutions or Foreign Government Owned Financial Institutions. Presently, Section 13 of the Sales Tax Act, 1990 and Section 16 of the Federal Excise Act, 2005 empower ECC to grant exemption in matters relating to national security, natural disaster, national food security in emergency situations, protection of national economic interests, etc. It is also proposed to amend the Sales Tax Act, 1990 and Federal Excise Act, 2005 to ensure confidentiality of information obtained in pursuance of bilateral and multilateral agreement for exchange of information, sources added. BR. Imported items massive changes in duty structure proposed by NTC The National Tariff Commission (NTC) has proposed massive changes in duty structure on different imported items including duty reduction from 20% to 10% on the import of carbon, reduction from 20% to 5% on petroleum resin, reduction from 20% to 0% on tubes/pipes and imposition of 25% regulatory duty on the import of capacitors. NTC has further proposed duty changes on the import of printed books, brochures, leaflets & similar printed matter- in single sheets, whether or not folded. BR. Banking transactions of non-filers: reduced rate of 0.4% WHT to continue till Jun. 30, 2016 The reduced rate of 0.4% withholding tax on banking transactions of non-filers would continue till Jun. 30, 2016. According to SRO 472(I)/2016, in exercise of powers conferred by proviso under Division XXI of Part IV of the First Schedule to the Income Tax Ordinance, 2001 (XLIX of 2001), the following amendments shall be made namely:- In the aforesaid notification, for the words "first day of May, 2016 to thirty first day of May, 2016", the words "first day of Jun.’16 to thirtieth day of Jun.’16" shall be substituted. BR. Income tax exemption limit to be increased. Govt. has decided to enhance the basic income tax exemption limit to PKR 500,000 from the existing PKR 400,000 for the salaried class in the budget for the FY17. Last time, the exemption threshold was increased to PKR 400,000 from PKR 350,000 in the 2012-13 budget. Govt. was also considering to present two new laws for declaration of foreign assets and control of foreign exchange. Dawn. Food price fall pulls inflation down to 3.17% Pakistan’s annual consumer inflation dropped to 3.17% in May from 4.17% in the preceding month, mainly on the back of fall in prices of food items, according to PBS. On a MOM basis, prices fell by 0.2% in May from April. Average inflation for the July-May 2015-16 period now stands at 2.82% compared to 4.65% a year earlier. Dawn. Weak monetary expansion despite low interest rate. Despite historically low interest rate and inflation, the monetary expansion remained less than the previous year at the end of the current fiscal year. The State Bank’s latest report issued on 31st May 2016 said the monetary expansion was 6.7% (PKR 755Bn) during the first 11 months (till May 20, 2016) of the 2015-16 against the expansion of 7.94% (PKR 790Bn) during the same period of the previous year. Dawn. Sales tax on different petroleum products reduced FBR has reduced sales tax on different Petroleum products including Motor Spirit on which sales tax has been brought down from PKR 9.89/liter to PKR 9.36/liter from June 1, 2016. The FBR has issued SRO. 471(I)/2016 to be effective from Jun. 1, 2016. According to the SRO, the sales tax on HOBC has been fixed at PKR 10.58/liter as compared to previous rate of PKR 10.65/liter. Sales tax on Kerosene has been fixed at PKR 5.58/liter against PKR 3.60/liter. Sales tax on High speed diesel oil has been decreased from PKR 25.16/liter to PKR 18.47/liter. Through this SRO, the sales tax on Light diesel oil has been fixed at PKR 1.86/liter as compared to last month rate of PKR 3.38/liter. BR. Bid to encourage investors: Ministry proposes more incentives for tight gas search The govt. is working on a plan to revise the tight gas policy and offer more incentives in an attempt to encourage investors to explore the country’s vast reserves estimated to be in trillions of cubic feet. The Finance Division had argued that though the effective increase in gas price emanating from tight gas reserves appeared to be on the higher side, in order to encourage exploration of such deposits and considering the high risk and capital investment with a longer recovery cycle, the division was endorsing the proposal. Tribune. Food items: Study to be conducted to see ‘actual demand’ The ECC has decided to conduct a study regarding cost of food items to stop the misuse of subsidies. Minister for Planning, Development and Reform Ahsan Iqbal has pointed out that price stabilization of basic food items was essential to help consumers. ECC Chairman Ishaq Dar endorsed the proposal and said that the Ramadan relief package is reviewed in the middle of the month; therefore a summary of the study’s findings should be shared so that a revision could be made. Tribune. Agriculture and industry set to get special packages. Finance Minister Ishaq Dar in his budget speech later this week would announce a special relief package for reduction in input costs for agriculture and industrial sectors to boost exports and economic growth rate. Dawn. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank List of Indicators 1-Jun PKR 104.80 -0.06% USD-Open MKT 1-Jun PKR 105.20 0.05% KSE-100 index FIPI 1-Jun 1-Jun Pts. $ Mn 36,496 -3.44 1.21% NM** Crude (JU'16) 1-Jun $/bbl 48.92 0.04% Gold (MY'16) 1-Jun $/oz 1,213.2 -0.38% Gold (10g) Local 1-Jun PKR 41,057 0.00% Silver (MY'16) 1-Jun $/oz 15.99 -0.14% Cotton(KHI)-40 kg 1-Jun PKR 6,147 1.79% Kibor-6M 1-Jun % 6.14% 0.00% 20-May $ Bn 21.61 1.37% Remittances Jul-Apr 16 $ Bn 16.03 5.18% Exports* Jul-Apr 16 $ Bn 17.32 -12.99% Imports* Jul-Apr 16 $ Bn 36.34 -3.70% Trade Balance* Jul-Apr 16 $ Bn -19.02 -6.68% Current Account Avg. CPI-FY16* Jul-Apr 16 Jul-May 16 $ Mn % -1,519 2.82 17.71% WoW Forex Reserves YoY May-16 Discount Rate % 5.75 Sources: KCCI Research, PMEX, NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year Major Currencies 175 165 GBP, 30-May-16, 153.7 155 145 135 EUR, 30-May-16, 117.0 125 115 105 95 USD, 30-May-16, 105.2 85 75 May-15 Aug-15 USD Nov-15 GBP Feb-16 EUR Source: KCCI Research ; Oanda.com Quote of the Day "The biggest risk is not taking any risk... In a world that's changing really quickly, the only strategy that is guaranteed to fail is not taking risks." Mark Zuckerberg Chart of the Day Sector-Wise Repatriation of Profits from Pakistan on FPI (10MFY16) Transport 29.89 27.24 26.25 14.66 14.61 11.51 10.11 6.88 4.23 2.64 2.63 2.17 Oil & Gas… Others Petroleum Refining Electronics Food Trade 0 20 40 115.45 45.44 60 80 100 120 140 Source: KCCI Research, SBP Value in $ Mn 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