Pakistan Daily Economy Update - 24 December

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1. Dec 24 , 2020 KCCI - eBulletin Pak-Iran border: KCCI suggests duty-free common trading zone, industrial park Vice President KCCI Shamsul Islam Khan, while sharing his views at a webinar, has suggested that Pakistan and Iran must look into the possibility of setting up duty free Common Trading Zone and an Industrial Park at Pak-Iran border, in order to improve the existing meager trade volume between the two countries and effectively curb the menace of smuggling which terribly hampers the legal trade between the two brotherly countries. President TCCIMA Masoud Khansari, in his remarks, said that the volume of trade is not satisfactory as compared to the potential which requires attention from both sides. Although the Iranian trade delegation visited Pakistan before the outbreak of COVID-19 pandemic which proved very fruitful but trade suffered due to extraordinary situation triggered by the pandemic. Linking Chabahar Port with Gwadar Port and the FTA between the two countries would surely pave way for improved trade ties. BR. Restoration of stalled IMF loan program: Power tariff likely to be increased by PKR 3.30 from next week Govt. is most likely to take the masses into confidence about the inevitable increase in power tariff by PKR 3.30 per unit before 31st Dec’20 to qualify for restoration of the stalled $ 6 Bn IMF loan program. The News. Industry running close to 100% capacity, says Razaq Dawood Adviser on Commerce Razak Dawood has said that Pakistan’s industry is now running close to its 100% capacity and more importantly the process to expand the industrial base has kick-started which is quite visible by increasing imports of machinery. The govt. has provided PKR 100Bn worth TERF (temporary economic refinance facility) to the business community for import of machinery to achieve sustainable industrialization and in a welcoming development, many industrialists have started importing machinery under that initiative. Industrialists can avail TERF initiative till 31st Mar’21. The News. FBR files references against PKR 7.4Bn benami transactions FBR has filed references against benami transactions worth PKR 7.4Bn before the adjudicating authority to take its nod on confirmation or revocation of assets attachment. The references have been filed by anti-banami zones of Islamabad, Lahore and Karachi. The News. FBR registers 119 FIRs under the Anti Money Laundering Act 2010 In its bid to comply with FATF conditions, FBR has so far registered 119 FIRs under the Anti-Money Laundering Act 2010, involving revenues of more than PKR 88.4Bn. FBR has so far recovered PKR 6.22Bn tax amount under this head. The News. FBR tells power, gas utilities: Concessionary tariff only for those listed on ATL FBR has directed power/gas distribution companies to allow concessionary utility tariff to only those manufacturers/ exporters whose names appear on the FBR's Active Taxpayers List (ATL) while issuing monthly electricity/gas bills. The FBR has also announced that the Board would also grant concessionary rate of sales tax on supply of electricity/gas to 4,084 units of export sectors appearing on the FBR's ATL. BR. SECP approves Pakistan’s first peer-to-peer lending platform SECP has approved the launch of the country’s first peer-to-peer lending platform that will improve access of small businesses to finance. Finja has introduced lending services with a focus to provide digital credit to micro small and medium enterprises. So far, Finja has digitally processed loans with a throughput of $ 10Mn to MSMEs and their employees. The News. ECC to approve funds for gas projects ECC is set to approve a funding plan for gas import projects, mainly for laying a gas pipeline in collaboration with Russia for the transmission of imported gas. Supreme Court had earlier given directive for implementing a LNG pipeline project from Karachi to Lahore by utilizing funds collected as gas infrastructure development cess. Tribune. ECC to take up mega Karachi plan, other items today ECC has been convened today (24th Dec’20) to take up as many as nine agenda items of different ministries, including the twice-deferred Karachi Transformation Plan. The ECC would consider the Cabinet Division’s proposal for reallocation of lapsed funds through supplementary/technical supplementary grant under the Sustainable Development Goals Achievement Programme (SAP). BR. Sindh govt. starts ADB- funded SPRIP The Sindh govt. has started Sindh Provincial Roads Improvement Project (SPRIP) funded by ADB. In this project 1,800 engineers were being trained and initially engineers were completed their trainings in Karachi, Hyderabad and Sukkur. Project Director SPRIP Mushtaq Ahmad said that in first phase nine roads of Sindh has been improved and experts also saved PKR 6,160Mn and added that the technical team further is trying hard to save PKR 2,880Mn. He said that other roads would also be improved in future under this project. BR. Due payments to IPPs: Govt shares no concrete plan \ The federal govt. has shared no concrete plan of due payments to IPPs, in lieu of agreements, saying that the country is passing through difficult times with debt and the IMF obligations having to be kept in mind. The Secretary Finance, however, reassure all IPPs not to worry, telling them that the govt. is serious and honour the commitments but did not share the how and when with IPPs. BR. Tax arbitration case: Cairn Energy wins over $ 1.2Bn from India Cairn Energy has said that it had won an international arbitration case against the Indian govt. over a tax dispute that had caused concern among investors over retrospective tax claims on companies. The tribunal ruled unanimously that India had breached its obligations to Cairn under the U.K.-India Bilateral Investment Treaty and awarded Cairn damages of $ 1.2Bn plus interest and costs, the company said. The amount is nearly equal to London-listed Cairn's market value of $ 1.3Bn. BR. PIA to operate cargo flights to Saudi Arabia PIA has announced its decision to operate cargo flights to Saudi Arabia to boost exports. PIA spokesman Abdullah Hafeez said that fruits, vegetables and meat are exported to Saudi Arabia and the delivery of these products by air would save time. Mr Hafeez said the cargo fares had been kept very attractive and reasonable. The first flight with 42 tonnes of cargo departed for Jeddah, he said. Dawn. Amnesty date for developers, builders may be extended The govt. might extend the last date for availing an amnesty related to developers and builders owing to overwhelming response and hindrances in regulatory approval. The last date for availing amnesty was expiring on 31st Dec’20 for builders and developers to deposit their undeclared money in a separate bank account for completion of projects by 30th Sept’22. The News. Sindh expects to attract $ 1Bn investments in Dhabeji SEZ Expecting to attract $ 1Bn in investments, Sindh govt. have announced 9th Feb’21 as the last day to submit bids for developing $ 120Mn Dhabeji Special Economic Zone (DSEZ). The zone would facilitate potential investors from China and other countries to either start new enterprises or transfer their facilities to Pakistan. The lease period is 50 years and tax holiday is 5 years. The minimum floor price was fixed at PKR 20Mn/acre. The federal govt. has already approved funds of around PKR 4.3Bn to construct a dedicated grid for the SEZ, which would provide up to 250MWs of power at zero point of the project, to be completed by 2023. The News. PM to sign $ 4.5Bn project next week: Railways Minister Federal Minister for Railways Azam Khan has said that PM Imran Khan would sign a new railway project worth $ 4.5Bn at a trilateral meeting to be held next week to link Pakistan with Afghanistan and Azerbaijan. The Nation. British fashion group Boohoo probes Pakistan suppliers over 'underpaid' staff British online fashion group Boohoo has said it was investigating a Guardian newspaper report that its suppliers were underpaying workers in Pakistan, after facing a similar scandal in the UK. The Guardian newspaper reported that workers at two factories in Faisalabad making clothes for Boohoo were earning 10,000 rupees, or £47 ($ 62), a month while the monthly minimum for such work was 17,500 rupees. Tribune. Economic Indicators List of Indicators Date / Period Unit Value Change Daily USD-Interbank USD-Open MKT 23-Dec 23-Dec PKR PKR 160.55 160.60 -0.08% -0.03% KSE-100 index FIPI 23-Dec 23-Dec Pts. $ Mn 43,088 -0.14 0.42% NM** Crude (AP'19) 23-Dec $/bbl 51.69 4.72% Gold (MA'19) 23-Dec $/oz 1,874.5 0.41% Gold (10g) Local 23-Dec PKR 96,493 -0.18% Silver (MA'19) 23-Dec $/oz 25.77 1.50% Cotton(KHI)-40 kg 23-Dec PKR 10,663 0.00% Kibor-6M 23-Dec % 7.35 0.00% Forex Reserves 11-Dec $ Bn 20.38 WoW -0.11% Remittances Jul-Nov 20 $ Bn 11.77 26.58% Exports* Jul-Nov 20 $ Bn 9.74 2.11% Imports* Jul-Nov 20 $ Bn 19.42 1.29% Trade Balance* Jul-Nov 20 $ Bn -9.69 -0.48% Current Account Foreign Direct Inv. Jul-Nov 20 Jul-Nov 20 $ Bn $ Bn 1.64 0.72 193.98% -18.87% YoY Jul-Oct 20 LSM Growth* % 5.46 % 8.76 Jul-Nov 20 Avg. CPI Discount Rate % 7.00 Jul-20 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful, WoW= week on week; YoY=Year on Year Major Currencies 235 GBP, 23-Dec-20, 216.0 225 215 205 195 EUR, 23-Dec-20, 195.7 185 175 165 155 145 USD Dec-19 GBP Mar-20 EUR Jun-20 USD, 23-Dec-20, 160.6 Source: KCCI Research ; Oanda.com Sep-20 Dec-20 Quote of the Day “Change is not a threat, it’s an opportunity. Survival is not the goal, trans-formative success is.” Seth Godin The Global Sustainable Competitiveness Index 2020 Sweden (1st) 62.1 Denmark (2nd) 61 UK (15th) 56.1 USA (32nd) 51.7 Nepal (53rd) 49.4 Bhutan (55th) 49 Iran (93rd) 45.3 Bangladesh (115th) 43.3 India (127th) 42.4 Nigeria (149th) 40.9 Pakistan (174th) 36.1 Iraq (180th) 33.9 0 20 40 60 80 ** The Index measures competitiveness of 116 countries based on 5 subindexes including Natural Capital and Governance Efficiency Source: KCCI Research; solability.com Trade Opportunity : Pak-China Virtual B2B meetings Ecommerce Gateway Pakistan (Pvt.) Ltd (www.ecgateway.net) is organizing PakChina Virtual B2B Meetings which will be held on 4th - 6th Jan’21 on Zoom. The top Chinese manufacturers and suppliers from sanitary ware sector will be attending these meetings. Therefore, members are requested to register themselves by filling the registration form on https://b2b.ecgateway.net/email. They can also contact Mr. Umair Nizam: 0335-3572280 or Mr. Wasi ul Haq: 03000568717 for registration.