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Pakistan Daily Economy Update - 23 September

IM Insights
By IM Insights
1 week ago
Pakistan Daily Economy Update - 23 September


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  1. September 23 , 2022 KCCI - eBulletin FDI dips 26% in July-August FDI dropped 26% to $ 169.5Mn during 2MFY23, the SBP reported. FDI during Jul-Aug’22 fell to $ 169.5Mn compared to $ 229.5Mn in JulAug’21. When compared to Aug’21, FDI inflows fell by 12% to $ 110.7Mn in Aug’22. China continued to lead in terms of FDI with $32.7Mn, while UAE came in 2nd with $ 25.7Mn invested in 2MFY23. Other significant investments were from Switzerland, with $ 23.3Mn and the Netherlands, with $16Mn. Dawn. Unit Value Change Daily 22-Sep PKR PKR 239.71 242.90 0.03% -0.31% KSE-100 index FIPI 22-Sep 22-Sep Pts. $ Mn 40,928 0.14 -0.09% NM** Crude Oil 22-Sep $/bbl 83.64 0.92% Gold 22-Sep $/oz 1,681.0 0.32% Gold (10g) Local 22-Sep PKR 132,460 -0.20% Silver 22-Sep $/oz 19.71 1.16% Cotton(KHI)-40 kg 22-Sep PKR 24,113 -0.88% Kibor-6M 22-Sep % 16.11 -0.01% Massive fire erupts at towel factory A massive fire caused due to a short circuit, erupted at a towel factory in Korangi Sector 27, Bilal Chowrangi, in the limits of Awami Colony police station, the police said. No casualty was reported till the filing of this report. BR. Forex Reserves 12-Aug $ Bn 13.61 WoW 0.38% Jul-Aug 22 $ Bn 5.25 -2.18% Tobacco: new excise regime unveiled To control tax evasion in tobacco sector, govt. has increased the adjustable FED on unmanufactured tobacco from PKR 10/kg to PKR 390/kg, applicable at the Green Leaf Threshing (GLT) stage. The officials of the Pakistan Tobacco Company have reiterated that this adjustable excise is applicable to the cigarette manufacturers and not the farmers. BR. Exports* Jul-22 $ Bn 2.22 -4.76% Imports* Jul-22 $ Bn 4.86 -10.48% Jul-22 $ Bn -2.64 14.77% Jul-Aug 22 Jul-Aug 22 $ Bn $ Bn -1.92 0.17 16.24% -16.54% July LSMI output slumps 16.5% MoM, 1.4% YoY LSMI output has declined by 16.5% on a MoM basis in Jul’22 compared to Jun’22 and by 1.4% on a YoY basis when compared to Jul’21, says the PBS. The LSM data released by the PBS with the base year 2015-16 showed that the main contributors towards the overall growth of -1.4% are, garments (4.4%), iron and steel products (0.6%), furniture (2.2%), chemical products (0.6%), cigarettes (-1.7%), cement (-2.8%), and fertilizers (-0.7%). The production in Jul’22 as compared to Jul’21 has increased in wearing apparel, paper and board, iron and steel products, and furniture, while it decreased in food, textile, tobacco, fertilizers, pharmaceuticals, non-metallic mineral products, and automobiles. The sectors showing growth during Jul’22 compared to Jul’21 include beverages (0.02%), wearing apparel (4.4%), leather products (0.1%), wood products (0%), paper and board (0.5%), iron and steel products (0.6%), furniture (2.2%), and other manufacturing (football) (0.1%). BR. Seizure of vehicles across country: FTO asks FBR to prepare policy with inputs from LEAs FTO has directed FBR to direct the Chief Enforcement, FBR Customs (focal person) to collaborate with Inspector Generals of other LEAs/Police, entrusted to perform functions under the Customs Act, 1969, and to chalk out a plan to seize all smuggled vehicles, plying countrywide. FTO also directed all chief collectors to ensure that tight border controls are in place so that smuggling of vehicles is prevented at the time of entry into Pakistan and that vehicles, crossing border, are effectively seized by the LEAs, confiscated accordingly and timely auctioned as per the law and the rules. BR. Hybrid working model envisaged: Energy conservation plan readied Federal govt. has reportedly prepared an energy conservation plan including hybrid-working model that includes four-day work from office and one-day work from home. Govt. has estimated saving $ 1.5Bn/annum through implementation of immediate proposed measures and $ 2.730Bn in medium term measures. Awareness campaign of water and energy conservation will also be launched. According to preliminary estimates, by adopting hybrid-working model, annual saving would be $ 535Mn, as this mechanism will save 348Mn liters of petrol and 291Mn units of electricity. BR. World Bank confirms fears of growing food insecurity The flooding in Pakistan has exacerbated previously high levels of food insecurity, the World Bank said in its latest report “Food Security Update”. Communities in Baluchistan and Sindh that ACTED’s teams have assessed have reported no access to food and, in some cases, no access to local markets. In addition, the OCHA Humanitarian Advisory Team in Pakistan estimates that 73% of households in flooded have inadequate resources to buy food. FAO has reported that over 1.2Mn hectares of agricultural land in Sindh has been damaged. Although more accurate estimates of the extent of the damage are forthcoming, a recent study used remote sensing technology to estimate production losses in the Sindh region of 193 tons of rice (80% of total production), 3.1Mn bales of cotton (88% of total production), and 10.5Mn tons of sugarcane (66% of total production). BR. Flood damage reassessed at $ 30Bn Ministry of Planning, Development and Special Initiatives Secretary said that according to a preliminary estimate, the GDP growth rate may remain 2% in FY23 and damage reassessment including reconstruction may be $ 30Bn due to floods in the country. The teams of govt. and 10 international development partners including the WB, ADB, UN, and others are jointly working on the preparation of the preliminary report for the damage assessment of floods in the country. BR. \ Pak-Qatar to launch mutual funds After receiving a license to operate as an asset management company and investment adviser, Pak-Qatar Asset Management Company Ltd has announced that has obtained approval to launch three Shariah-compliant funds along with six investment plans catering to the needs of the masses. Dawn. List of Indicators Date / Period USD-Interbank USD-Open MKT 22-Sep YoY Remittances Trade Balance* Current Account Foreign Direct Inv. Jul 22 LSM Growth* % 11.70 % 24.93 Jul-22 Avg. CPI Discount Rate % 15.00 Jul-22 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful, WoW= week on week; YoY=Year on Year Major Currencies 305 295 285 275 265 255 245 235 225 215 205 195 185 175 165 155 145 Sep-21 GBP, 22-Sep-… EUR, 22-Sep-22, 238.8 USD, 22-Sep-… Dec-21 GBP USD Mar-22 EUR Jun-22 Sep-22 Source: KCCI Research Quote of the Day “Concentrate all your thoughts upon the work in hand. The sun's rays do not burn until brought to a focus. “ Alexander Graham Bell Flood-hit areas: Sindh govt. to launch damage assessment survey Sindh govt. decided to conduct a comprehensive joint survey of flood affected areas from 26th Sept’22 for assessment of damages to life, property and crops. Chief Secretary Sindh said that the survey would be conducted to assess the damage in the flood affected areas by District administration, NDMA, PDMA and army personnel. BR. Outstanding Domestic Debt of Public Sector Enterprises (PSEs) Paracetamol subsidy to help flood-hit people Federal govt. has decided to provide subsidy to paracetamol manufacturers as the demand for the painkiller witnessed a significant spike amid floods in the country, resulting in the outbreak of waterborne diseases, particularly dengue and diarrhea, in flood-hit regions. Dawn. OGDC Cash-strapped PSO’s receivables hit PKR 583.2Bn mark Faced with serious financial constraints, PSO has repeatedly approached the federal govt. for getting PKR 583Bn receivables cleared against SNGPL, GENCOs and PIA. Sharing details of PSO’s receivables position, sources said that SNGPL is the top defaulter and is required to pay PKR 347Bn, while the power sector, owes PKR 179.4Bn. Similarly, PIA has emerged as the third biggest defaulter that owes PKR 23.5Bn. The govt. is to pay Price Differential Claims (PDC) amounting to PKR 8.934Bn for the period 1996-2014 and PKR 24.2Bn under the head of exchange rate differential on the FE 25 loan. BR. Flood victims: PM directs distribution of PKR 45Bn from BISP funds PM Shahbaz Sharif has directed the authorities to ensure distribution of PKR 45Bn from BISP funds in next 10 days amongst flood victims in addition to the already distributed PKR 25Bn and intimate further progress on registration of beneficiaries. BR. Local industry in a shambles The local tyre industry is going through a difficult time as the total estimated value of smuggled tyres soars to over PKR 300Bn, providing over PKR 50Bn financial shocks to the national exchequer. BR. Pakistan, Iraq agree to start ferry service between Karachi and Basra Pakistan and Iraq have agreed to start a ferry service between Basra and Karachi to help Pakistani zaireen (pilgrims) visiting Iraq. The agreement was reached during a meeting between Interior Minister Rana Sanaullah and Iraqi Ambassador Hamid Abbas Lafta. Dawn. PTCL Group, PRCS team up to provide drinking water to flood-hit families In order to prevent serious health hazards, PTCL and Ufone have joined hands with the Pakistan Red Crescent Society (PRCS) to provide 72,000 liters of safe drinking water per day to families in districts of Sindh and Baluchistan respectively. BR. Steel Mills Corp. WAPDA PIA 6.6 6.3 5.7 42.5 43.2 43.2 72.5 63.6 67.4 182.1 153.3 141.8 1,089.70 1,170.40 1,232.50 Other PSEs Jun'22 Jun'21 Jun'20 Source: KCCI Research, SBP Note If any member is facing any issues pertaining to PakistanAfghanistan investment and trade policies or has project proposals is requested to share the information at for forwarding to the Board of Investment.