Pakistan Daily Economy Update - 2 May

Transcription

1. Apr . 30 - May. 2, 2017 KCCI - eBulletin Zero-rating facility may be withdrawn: export-oriented sectors face grim prospect The govt. is likely to withdraw sales tax zero-rating facility granted to five export-oriented sectors in upcoming budget FY18, as revenue loss has been calculated at PKR 15Bn during 9MFY17. The govt. had issued revised sales tax zero-rating from Jul. 1, 2016 under which 5% sales tax is chargeable on supplies of locally-made finished articles of textile and leather products. The facility has been misused as volume of claims is same as it was during 9MFY16 which is very serious and sales tax refunds volume has not been reduced as promised by textile sector during FY17. BR – Mon. Budget to be based on 7th NFC award Annual budget for the upcoming FY18 would be based on 7th National Finance Commission (NFC) award, as the federal govt. has failed to constitute new formula on center-provincial revenue sharing. Under the 7th NFC Award, the federal govt. is bound to transfer 57.5% resources to all the four provinces from federal divisible pool where Punjab gets 51.74% share, Sindh 24.55%, KP 14.62% and Balochistan 9.09% under the divisible pool. The Nation – Tue. FBR eyes PKR 900Bn in May-June to meet annual revenue collection target Tax authorities are confident about meeting the revenue collection target of PKR 3.62Tn, set for FY17, as they are expecting recovery of hundreds of billions rupees in court cases. FBR will be optimistic that it would be able to collect around PKR 900bn during the last two months, which would be sufficient to meet the collection target for fy17. It has managed to collect PKR 2,25bn in revenue during 9MFY17, up 7.88% over the same period a year ago. The News – Sun. FBR says tracing offshore companies a difficult task The first annual report by the DG Intelligence and Investigation, FBR highlights the inability of the tax authorities to trace the investors in offshore companies. The report has highlighted that names and addresses of 70 such investors mentioned in Panama papers have been identified, but they could not be traced by the FBR. Dawn-Tue. 'Pakistan not producing goods China needs' Chinese Ambassador to Pakistan Sun Weidong has emphasized that Pakistan is not producing the goods needed in China, which is a reason behind the trade imbalance, but the situation will change when Chinese companies start producing such products in Pakistan. He clarified that not a single Chinese company would be allowed to install used machinery in Pakistan and transfer of technology would be a prerequisite. Tribune – Sun. Pakistan, China finalising long-term plan for CPEC Pakistan and China are working towards early finalization of a Long-Term Plan (LTP) for the CPEC. There are expectations that it could be finalized during the Belt and Road summit being hosted by China on 14th May’17. The LTP, which covers the projects to be undertaken till 2030, has been behind the timeline set for its adoption. Dawn-Tue. FIPI outflow recorded at $ 198.67Mn in Jan.-Apr.’17 Despite better than expected financial results of listed companies and expectations of healthy returns, foreign investors are continuously withdrawing their investment from Pakistan capital market. The foreign investors remained net sellers of shares worth $ 36.28Mn during Apr.’17. According to National Clearing Company of Pakistan Limited (NCCPL), cumulative outflow of Foreign Investors' Portfolio Investment (FIPI) was recorded at $ 198.67Mn in 4MCY17. During CY16, foreign investors had withdrawn $ 361Mn from Pakistan’s capital market. BR – Tue. K-Electric plans to install 900MW LNG power plant K-Electric (KE) has planned to install a 900MW LNG based electricity generation plant in place of an outdated oil-run 420MW plant at its Bin Qasim site. The News – Sun. Finance ministry agrees to release PKR 104Bn for power subsidy The Ministry of Finance has agreed to release PKR 104Bn out of PKR 118Bn allocation in subsidy for power consumers, which was 0.3% of Gross Domestic Product (GDP). This is markedly lower than the PKR 676Bn, or 2.4% of GDP, earmarked for subsidy in 2012-13. Tribune – Sun. IMF warns Pakistan, others of 30% hike in oil import bill IMF, in its May 2017 Regional Economic Outlook, has warmed Pakistan and other oil importers that because of an increase in global prices, oil bills for 2017 will be almost 30% higher than the last year. Any further increases could undermine consumption, increase fiscal risks, and worsen external imbalances. But the report also says that this downside risk would be partly offset by higher remittances and other foreign support from oil-exporting countries in the region, principally benefiting Pakistan, Egypt, Jordan and Lebanon. Dawn-Tue. Planning Commission seeks PKR 16.5Bn for 50,000 housing units The Planning Commission has proposed an allocation of PKR 16.5Bn for constructing 50,000 housing units for the low-income group under the Prime Minister’s Home Ownership Program for Everyone (HOPE) in the upcoming budget for FY18. Pakistan is recording the fastest pace of urbanization in South Asia as its annual demand for housing units stands at 700,000, but only 250,000 units were being constructed. Tribune – Tue. Pak companies start business with Ghana Honorary Consul General of Ghana in Pakistan has said that many Pakistani companies have started business with Ghana where the investment policies are as good and liberal as in Pakistan. He said that both the countries are also cooperating in the fields of science, technology and defense production. The News – Tue. Provinces to get full water indent from today: IRSA Indus River System Authority (IRSA) will start releasing full water indent to the provinces from May 1, 2017. According to the Authority, Punjab would get 90,000 cusecs, Sindh 80,000 cusecs, Balochistan 6,000 cusecs and KP would get 3,100 cusecs. The water discharge from Mangla Dam has already been increased. Furthermore, Balochistan has opened its canals first time in Kharif season. BR – Mon. Sindh to seek compensation for water woes Sindh CM has decided to file a compensation case with the federal government for short supply of water to Sindh right from 1991 when the Water Accord was signed. The CM said that Sindh had been receiving short supply of water since long. But since 1991 when the Water Accord was signed, the province has been receiving less water than its allocated share. Dawn-Tue. First direct London-China train finishes 12,000 km run The first freight train linking UK directly to China arrived in the eastern Chinese city of Yiwu after a 12,000-km trip, becoming the world’s second-longest rail route. The journey is the latest effort in China’s drive to strengthen trade links with Western Europe along a modern-day “Silk Road” route. Tribune – Sun. List of Indicators Date / Period Unit Value Change Daily Crude (JU'17) Gold (MY'17) Gold (10g) Local Silver (MY'17) Cotton(KHI)-40 kg Kibor-6M 28-Apr 1-May 28-Apr 28-Apr 1-May 1-May 1-May 1-May 28-Apr 1-May PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 104.81 106.25 49,301 -3.60 48.74 1,258 43,457 16.87 7,180 6.17% Forex Reserves 21-Apr $ Bn 21.15 0.01% 0.09% -0.37% NM** -0.91% -0.89% -0.10% -2.03% 0.00% 0.01% WoW -1.94% YoY -2.29% -3.06% 18.67% -38.80% -160.74% USD-Interbank USD-Open MKT KSE-100 index FIPI Jul-Mar 17 Remittances $ Bn 14.06 Jul-Mar 17 Exports* $ Bn 15.12 Jul-Mar 17 Imports* $ Bn 38.50 Jul-Mar 17 Trade Balance* $ Bn -23.39 Jul-Mar 17 Current Account $ Mn -6,130 % 4.01 Avg. CPI-FY17* Jul-Mar 17 Mar-17 Discount Rate % 5.75 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year Major Currencies 175 165 155 145 135 125 115 105 95 85 75 Apr-16 USD GBP, 28-Apr-17, 135.6 EUR, 28-Apr-17, 114.3 USD, 28-Apr-17, 104.9 Jul-16 Oct-16 GBP Jan-17 Apr-17 Source: KCCI Research ; Oanda.com EUR Quote of the Day “Our labour preserves us from three great evils -- weariness, vice, and want.” Voltaire, Candide Chart of the Day 160 Monthly Large Scale Manufacturing Index & Growth Trajectory (Feb.'14 - Feb.'17) 10% 8% 150 6% 140 4% 130 2% 120 0% 110 -2% 100 -4% Feb/14 Mar/14 Apr/14 May/14 Jun/14 Jul/14 Aug/14 Sep/14 Oct/14 Nov/14 Dec/14 Jan/15 Feb/15 Mar/15 Apr/15 May/15 Jun/15 Jul/15 Aug/15 Sep/15 Oct/15 Nov/15 Dec/15 Jan/16 Feb/16 Mar/16 Apr/16 May/16 Jun/16 Jul/16 Aug/16 Sep/16 Oct/16 Nov/16 Dec/16 Jan/17 Feb/17 Govt. may be unable to implement PM’s export package The govt. may be unable to implement Prime Minister's PKR 180Bn export package due to paucity of funds as it requires release of PKR 7Bn per month to exporters under different incentives. The package was announced on Jan. 10, 2017 where incentives were notified on Jan. 23, 2017 for textile sector and on Feb. 2, 2017 for non-textile sectors. Despite the passage of three and a half months, Finance Ministry has released only PKR 1Bn for duty drawbacks and that too on local taxes collected from garments, home textiles, processed fabric, greige fabric and yarn manufacturing cum-exporter units. Exporters however claim that they are yet to receive any money under the scheme so far. BR – Sun. Economic Indicators LSM Index (LHS) Y-o-Y Growth (RHS) Source: KCCI Research, SBP Source: KCCI Research, PBS 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