Pakistan Daily Economy Update - 2 March

Transcription

1. Apr 01-02 , 2018 KCCI - eBulletin Finalization of CPFTA-II now in sight A Chinese team headed by China’s Vice Minister of Commerce, Wang Shouwen will hold formal talks with Pakistani side on Apr. 2, 2018 (today). Commerce Division has reportedly been directed from the highest level to finalize the CPFTA-II during the 10th round so that the agreement is inked during the forthcoming visit of PM Abbassi to China. According to the under consideration Tariff Reduction Modalities (TRM), 75% tariff lines will be duty free whereas 20% items will remain in negative list while 5% tariff lines will fall in Margin of Preference (MoP) mechanism. Pakistani technical team is yet to firm up its negative list. The tariff elimination on 75% tariff lines will be divided in three stages, i.e., category 1: EIF, category II, 0-7 years, category III, 3-15 years. BR – Sun. Prices of petrol and diesel reduced The govt. has reduced prices of petrol and High Speed Diesel (HSD) by PKR 2.07/liter to PKR 86/liter and PKR 2/liter to PKR 96.45/liter, respectively for Apr.’18. However, it decided to maintain the prices of kerosene oil and Light Diesel Oil (LDO) at PKR 76.46/liter and PKR 65.30/liter, respectively. The sales tax on motor spirit has also been increased from 17% to 21.5% from Apr.’18, reflecting an increase of 4.5% while sales tax on HSD has been increased by 2% to 27.5% from 25.5% in Mar.’18. Sales tax on kerosene would remain at 17% during Apr.18. Sales tax on LDO has been decreased from 17% to 16.5%. BR – Sun. FBR allows rectification on tax payment receipts The FBR has allowed rectification on payment receipts to facilitate taxpayers and has decentralized the correction-related approval to relevant chief commissioners. Now taxpayers would contact relevant LTUs and RTOs for instant rectification instead of going through a long procedure of approval from the board. The new procedure has been devised in order to facilitate taxpayers, who by mistake have recorded incorrect tax period or cases where due to mistake of attorney or bank officials, the name/ NTN of taxpayers has been recorded incorrectly. The News-Sun. FBR collects PKR 2.6Tn in 9MFY18 FBR has provisionally collected net revenue of over PKR 2.62Tn during 9MFY18 as against PKR 2.26Tn collected during 9MFY7, reflecting an increase of around 16%. The required growth in revenue collection is 19.5% for meeting the monthly revenue collection in ongoing FY18. The provisional collection for Mar.’18 is PKR 361Bn, excluding collection on account of book adjustments. BR – Sun. Textile imports: FBR seeks to levy uniform rate of 1% WHT FBR is considering a major budget proposal of textile sector for upcoming FY19 about charging a uniform rate of 1% Withholding Tax (WHT) on imports made by commercial importers and manufacturers under SRO 1125(I)2011. Under SRO 1125(I)2011, commercial importers are subject to 3% WHT whereas manufacturers are only subject to 1% WHT. Currently duty is 12% and the last increase of 1% in 2016 was imposed without consulting stakeholders. Prior to SRO 1125(I)2011 and SRO 1125(I)2011 and SRO-212(1) 2013, withholding tax was being charged at a uniform rate of 1% for more than five years. FBR has also referred the proposal to Ministry of Textile Industries for comments. BR – Sun. Gas supply to K-E: Sindh CM seeks PM’s intervention Sindh CM Murad Ali Shah, through letter to the PM, has taken up the issue of sudden reduced natural gas supply to K-Electric by SSGC, urging him to direct SSGCL to ensure uninterrupted supply of 276MMCFD natural gas to KE. Quoting KE, the CM says that it is receiving only 90MMCFD gas, which is insufficient to optimally run gas-based power plants that require at least 190MMCFD. The result is shortfall of further 500MW in addition to existing shortage of 400MW. KE has further claimed that SSGC is reluctant to sign the General Security Agreement (GSA) in the light of ECC decision i.e. allocation of 276MMCFD for KE power plants whereas KE is regularly paying the current bills of SSGC. BR – Sun. Rupee value to increase due to CPEC: Ahsan Iqbal Federal Interior Minister Ahsan Iqbal has said that a new middle class market will emerge in Pakistan as the country achieves GDP growth of 6%. He added that the value of the PKR, which recently plunged over 9% against the USD due to a bulging \ current account deficit, is likely to increase due to investments in CPEC. While addressing a summit, he said investors from Europe, Middle East and other parts of the world would start businesses in Pakistan, which will create a positive impact of CPEC on the economy. Tribune-Sun. Ministry seeks budget proposals to safeguard dairy farmers The Ministry of Food Security and Research has sought budget proposals from stakeholders on regulation of milk powder imports, as it adversely affects domestic production of fresh milk. It has sought the proposals to safeguard the interest of the dairy farmers, which will be presented in a meeting scheduled to be held on 3rd Apr’18. Import of milk and whey powders has been on the rise for the last several years at the cost of local dairy farmers, who are unable to sell fresh milk due to availability of low-cost competing commodities. The News-Sun. Transfers to provinces from divisible pool climb 50% in four years Transfers to provinces from the federal government’s divisible revenue pool soared around 50% during the tenure of the incumbent govt. despite the fact that a new resource distribution formula is yet to be finalized for the last three years. During FY17, the centre transferred PKR 1.99Tn to provinces from divisible pool as compared to PKR 1.29Tn during FY13, when the current govt. took the helm of affairs. The 7th National Finance Commission award expired in FY15 after completing its fiveyear life. Since then, the award has been extended for interim periods through Presidential Ordinances. The News-Sun. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 30-Mar 115.30 116.05 0.00% -0.17% Crude (MY'18) 30-Mar 30-Mar 30-Mar 30-Mar PKR PKR Pts. $ Mn $/bbl 45,560 -1.39 64.52 0.16% NM** -0.25% Gold (MY'18) Gold (10g) Local 30-Mar 30-Mar $/oz PKR 1,329.0 50,442 -1.12% 0.08% Silver (MY'18) Cotton(KHI)-40 kg 28-Mar 30-Mar $/oz PKR 16.27 8,038 -1.15% 1.35% Kibor-6M 30-Mar % 6.61 $ Bn 17.95 -0.01% WoW -0.72% Remittances 22-Mar FY18 Jul-Feb 18 $ Bn 12.83 YoY 3.41% Exports* Imports* Jul-Feb 18 Jul-Feb 18 $ Bn $ Bn 14.85 39.13 11.66% 17.19% USD-Interbank USD-Open MKT KSE-100 index FIPI Forex Reserves Jul-Feb 18 Trade Balance* $ Bn -24.28 Jul-Feb 18 Current Account $ Mn -10,826 Foreign Direct Inv. $ Bn 1.94 Jul-Feb 18 Jul-Jan 18 LSM Growth* % 6.33 % 3.84 Jul-Feb 18 Avg. CPI Discount Rate % 6.00 Jan-18 WoW= Sources: KCCI Research, PMEXweek , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; -20.85% -50.03% 15.64% Major Currencies 175 GBP, 1-Apr-18, 162.0 165 155 145 EUR, 1-Apr-18, 142.4 135 125 115 USD, 1-Apr-18, 115.6 105 95 Apr-17 Jul-17 GBP USD EUR Oct-17 Jan-18 Source: KCCI Research ; Oanda.com Quote of the Day "Doubt kills more dreams than failure ever will." Suzy Kassem Chart of the Day FEDERAL EXPENDITURES AS % OF GDP (1HFY13-1HFY18) 8.90% 9.00% 8.80% 8.80% 8.80% 8.50% 8.60% 8.30% 8.40% 8.20% 8.20% Bulk clinker exports resume after 14 years Bulk clinker exports will resume after over a decade as Attock Cement Ltd. has received export order from West African countries and Kenya. The company would export 150,000 tons of clinker from Pakistan International Bulk Terminal Ltd (PIBTL), where a ship carrying clinker would sail out next week. Another major southern player is also in the process of finalizing the export of clinker. The same company had last exported 105,000 tons of the product in 2003 to the growing market of UAE. Dawn – Sun. 8.00% 7.80% 1HFY13 1HFY14 1HFY15 1HFY16 1HFY17 1HFY18 Source: KCCI Research, MoF BankIslami, KASB Bank merger caused PKR 3.5Bn loss: AGP Disclaimer The irregular amalgamation of KASB Bank with BankIslami had caused roughly PKR 3.5Bn in losses to the exchequer in This report has been prepared by KCCI Research & Development Cell. The information contained addition to PKR 6.6Bn as losses to sponsors of the defunct bank, affirms a new report of the Auditor General of Pakistan herein have been compiled or arrived at based upon information obtained from sources believed to (AGP). It is the second time that the office of the AGP has framed allegations against the SBP in the case of amalgamation of be reliable and in good faith. Such information has not been independently verified. the defunct KASB Bank into BankIslami. On 7th May’15, the SBP merged KASB Bank into BankIslami at a token price of PKR icon represents the sole viewpoint of the KCCI R&D Cell, and is stated to enrich the readers' 1,000 after the former could not meet the statutory paid-up capital requirement of PKR 10Bn. Tribune-Sun. understanding of the news item. The R&D Dept. bears no responsibility for its correctness or accuracy. Contact: res@kcci.com.pk