Pakistan Daily Economy Update - 23 June

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1. Jun . 23, 2016 KCCI - eBulletin Budget approved by National Assembly The National Assembly has approved the federal budget, including the Finance Bill, incorporating some amendments of the govt. and recommendations of the Senate for FY17. The govt. will withdraw the amendment about withholding tax regarding the provinces through an Ordinance if the matter of receivables and payables is settled amicably by Jun. 30, 2016. The volume of re-appropriations and supplementary grants was PKR 1.44Tn in FY13 which has been reduced to PKR 261Bn in FY16. BR. CPEC: Gilgit-Baltistan to be declared free trade zone, says Dastgir The federal govt. has decided to declare Gilgit-Baltistan (G-B) as a free trade zone to promote business activity in the area, according to Minister for Commerce Khurram Dastgir. He said G-B had paramount importance in making the CPEC project a success due to its geographical location and in that regard, the govt. had decided to declare the area as a free trade zone. He also said the free trade zone status would attract local and foreign investment in the area and the project will change the fate of the area and its resources will be tapped once investments start coming to that area. Tribune. Off to Switzerland FBR to investigate wealth of Pakistanis stashed in Swiss banks A Federal Board of Revenue (FBR) team would leave for Switzerland on June 23, 2016 to hold talks with Swiss authorities for reaching an agreement on information sharing about the money stashed by Pakistanis in Swiss banks. FBR member and spokesman Dr Iqbal said that the FBR team would move to Bern for a second round of talks with Swiss tax authorities to amend the existing double taxation avoidance agreement. Daily Times. Swiss accounts: NAB terms FBR 'major hurdle' The National Accountability Bureau (NAB) has accused FBR of being the major hurdle in bringing $ 200Bn back to the country, which is lying in Swiss banks. In this regard, foreign affairs standing committee has asked the FBR and the NAB to explore the legal perspective to co-ordinate with each other in the matters involving double taxation treaties of Pakistan with other countries. BR. NEPRA gives nod to power import at 9.41 cents per unit Pakistan is expected to start importing electricity from 2019 as the estimated time for laying power transmission lines from the exporting countries to Pakistan is 40 months. Nepra has allowed the import of 1,300MW of electricity from Central Asian states under the Casa-1,000 power project at a tariff of 9.41 cents per kWh. The lines will be laid over 1,200 KM and electricity will be imported from the beginning of May to the end of September every year. The project cost excluding the interest during construction (IDC) is estimated at $ 873Mn. Tribune. July-May: Govt. outpaces private sector in bank credit uptake The govt. sector continued to dampen the private-sector credit uptake in 11MFY16, according to the SBP. Banks’ credit to the govt. sector amounted to PKR 6.3Tn at the end of May, up 19.3% from the beginning of FY16. In contrast, growth in bank loans to private-sector businesses stood at just 7.9% over the same period. However, outstanding loans to private-sector businesses amounted to PKR 3.2Tn at the end of May. This equals to only 25.7% of total outstanding credit in the economy. Tribune. Jul.-May non-oil imports increased considerably Pakistan's non-oil imports have increased considerably during 11MFY16 with a huge rise of 132.87% in imports of raw cotton. According to the Pakistan Bureau of Statistics, imports of textile group increased by 26 % during Jul.-May.’16 to $ 2.92Bn from $ 2.32Bn a year ago. Within food group, dry fruits and nuts imports increased by 43.20% to $ 151Mn from $ 105Mn. Similarly, the machinery group imports also increased by 16.77% to $ 7.796Bn during the period under review from $ 6.68Bn a year earlier. BR. Non-textile exports fall 19% Exports of non-textile products dropped 19% to $ 7.68Bn in the first 11 months (July to May) of the current fiscal year from $ 9.48Bn a year earlier as per the data released by Pakistan Bureau of Statistics. Overall food exports fell 13% year-on-year during the period. Exports of rice went down by 10% in value despite a growth of 9% in terms of quantity. Fruit exports fell 4% in value and 3% in quantity, while that of vegetables decreased 8% in value and 6% in quantity. Exports of meat and its products, however, grew 13% in value and 5% in quantity during July-May 2015-16 on the back of government’s initiatives and incentives provided to the livestock sector. Petroleum crude also registered a negative growth of 65% in value and 41% in quantity during the period under review. Dawn. SECP launches swift incorporation scheme SECP has launched swift incorporation scheme with the aim at ensuring ease in doing business in the country and facilitate entrepreneurs for registration of companies. Under the scheme, the documents for the incorporation of a company would be processed on the same day as against two working days if applied online with short Memorandum and Articles of Association placed on the SECP’s website and the documents are received by 10am. This facility will be available from June 24 onwards. Tribune. World FDI flows expected to fall this year With FDI inflows surpassing half a trillion dollars in 2015, developing Asia remained the largest FDI recipient region in the world, says the World Investment Report 2015 published on June 22, 2016. The report says that developing Asia saw FDI inflows increase by 16 % to $ 541Bn – a new record. Inflows to Pakistan declined to $ 865Mn, whereas inflows to Bangladesh jumped by 44% to $ 2.2Bn. Dawn. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank List of Indicators 22-Jun PKR 104.73 0.01% USD-Open MKT 22-Jun PKR 105.20 0.46% KSE-100 index FIPI 22-Jun 22-Jun Pts. $ Mn 38,149 -2.66 -0.69% NM** Crude (JU'16) 22-Jun $/bbl 49.03 -2.58% Gold (MY'16) 22-Jun $/oz 1,267.5 -0.05% Gold (10g) Local 22-Jun PKR 42,171 -0.20% Silver (MY'16) 22-Jun $/oz 17.26 -0.15% Cotton(KHI)-40 kg 22-Jun PKR 6,147 1.79% Kibor-6M 22-Jun % 6.10% 0.00% Forex Reserves 10-Jun $ Bn 21.42 0.75% Remittances Jul-May 16 $ Bn 17.84 5.58% Exports* Jul-May 16 $ Bn 19.15 -12.39% Imports* Jul-May 16 $ Bn 40.32 -2.74% Trade Balance* Jul-May 16 $ Bn -21.17 -7.28% Current Account Avg. CPI-FY16* Jul-Apr 16 Jul-May 16 $ Mn % -1,519 2.82 17.71% WoW 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 GBP, 22-Jun-16, 154.8 165 155 145 EUR, 22-Jun-16, 118.9 135 125 115 105 USD, 22-Jun-16, 105.4 95 85 75 Jun-15 Sep-15 USD GBP Dec-15 Mar-16 EUR Jun-16 Source: KCCI Research ; Oanda.com Quote of the Day "The man who will use his skill and constructive imagination to see how much he can give for a dollar, instead of how little he can give for a dollar, is bound to succeed. " Henry Ford Chart of the Day Pakistan's Export of Oil Products (Mn Tons) 11MFY16 0.67 FY15 0.97 FY14 0.85 FY13 0.65 FY12 0.73 FY11 0.79 FY10 0.67 FY09 0.73 0.04 FY08 0.95 0.08 FY07 0.92 FY06 0.83 FY05 0.73 - 0.2 0.4 Mogas 0.6 Naptha 0.8 1.0 1.2 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