Pakistan Daily Economy Update - 24 May

Transcription

1. May . 24, 2017 KCCI - eBulletin $ 10.4Bn current account deficit projected The govt. has projected a $ 10.4Bn current account deficit for the upcoming FY18 largely due to a $ 26.9Bn trade deficit with exports projected to grow by 6.3% while imports by 9.5%. The govt. has projected net factor income from abroad at PKR 1.99Tn and external resources inflows at PKR 951Bn. The total investments as a percentage of GDP is projected at 17.2%, fixed investment at 15.6%, public (including general investment) at 4.5% of the GDP and private investment at 11.2%. The govt. has also projected a 6% growth on the basis of growth of 5.4 % in commodity production sector with 3.5% growth in the agriculture sector on the basis of 2% growth in important crops. The growth of 7.3% is projected in industry while in manufacturing sector, 6.4% growth is projected with LSM at 6.3%. The services sector's growth is estimated at 6.4% for the upcoming FY18. BR. Budget preparations in full swing For the announcement of the federal budget FY18, preparations continue in full swing in accordance with the prescribed timelines. In this regard, upcoming budget measures would focus on employment generation and achieving higher, sustainable and inclusive economic growth. On revenue side, govt. would also introduce measures for bringing improvement in the system of tax collection, broadening the tax base, and facilitation to tax-payers. The budget is being prepared in close coordination between all govt. departments and ministries after extensive consultations with all stakeholders including the business community, traders, chambers of commerce and industries. The Nation. MoF reviewing dairy sector proposals Finance Ministry is reviewing a number of budget proposals (2017-18) of dairy sector which are expected to be incorporated in Finance Bill 2017 including abolition of regulatory duty on the import of whey/milk powders, exemption of withholding tax on milk, adjustable 7% sales tax on agricultural machinery import and extension of zero rating of inputs to other direct and indirect material, including capital goods. BR. Builders demand continuation of fixed tax regime Builders and Developers of Pakistan have expressed concerns about the reported move of the FBR to abolish the fixed tax regime (FTR), saying it will hurt the construction industry and promote corruption. They demand that the government should increase the deputy commissioner (DC) and FBR rates to the market rates and that the tax rate for the realty sector should be 1% only. Dawn. Leather industry demands duty free imports The Pakistan’s leather industry has urged the govt. to abolish customs duty on the import of basic raw materials in the upcoming federal budget of FY18. In its budget proposals, it ask the govt. to allow duty-free import of raw and wet-blue hides/skins, all tanning machineries, accessories, particularly the stamping foils used by the industry for up gradation of leather; upgraded leather is in great demand in Europe. It also recommend that the govt. should continue the sales tax zero-rating facility to the export-oriented leather industry in true letter and spirit with all inputs to be zero-rated including packing materials, fuels, and spares etc. The News. Next budget to meet people’s expectations: CM Sindh CM Mr. Shah has said that the budget of FY18 is being prepared to meet the expectations of the people of the province by completing hundreds of uplift schemes launched during the past four years. Directing the departments concerned to finalize the ‘Karachi Package’ for the next financial year, he said that Karachi is one of the best cities of the world and he would make it a city worth visiting. His plans includes improvement in tourism facilities, particularly at the seaside of the city. Dawn. Exporters urged to avail benefits of Pakistan-Malaysia FTA Commerce Minister Khurram Dastagir has urged Pakistani exporters to avail maximum advantage of Pak-Malaysia Free Trade Agreement (FTA). In a briefing on Pak-Malaysia FTA, the minister said that govt. is working to include more items in the FTA but principal export items such as textile, surgical and leather, which already enjoy zero tariff rates in Malaysia, are being ignored by the Pakistani exporters. Under comprehensive FTA, Pakistan has offered tariff concessions to Malaysia in 6,083 tariff lines while Malaysia has offered concession to Pakistan on 10,576 tariff lines and out of the total, 74% (7,914 tariff lines) enjoy zero duty. The Nation. Dutch broadband firm to invest $ 10Mn in Pakistan A Dutch telecom firm, Augere Pakistan, would roll out long-term evolution (LTE) technology in 11 cities across the country with an investment of $ 10Mn becoming the first company in the country to deploy corporate LTE. Currently, LTE service is available to mobile phone users alone, but with the introduction of LTE for corporate sector, businesses would get high-speed uninterrupted bandwidth and connectivity essential to run their business operations. Initially the LTE service is being launched in Sukkur, Hyderabad, Peshawar, Quetta, Sialkot, Sargodha, Faisalabad, Multan, Rahim Yar Khan, Gujranwala and Gujrat. The company plans to upgrade the WIMAX network in Karachi, Lahore, Islamabad and Rawalpindi by the end of 2017.The News. CPEC may create more India-Pakistan tension: UN report According to a United Nations (UN) report CPEC might create geopolitical tensions with India and ignite political instability. The report released by the UN’s Economic and Social Commission for Asia and the Pacific (Escap) feared that Afghanistan’s political instability could limit the potential benefits of transit corridors to population centers near Kabul or Kandahar. Dawn. Economic Indicators List of Indicators Date / Period Unit Value Change Daily Crude (JU'17) Gold (JU'17) Gold (10g) Local Silver (JU'17) Cotton(KHI)-40 kg Kibor-6M 23-May 23-May 23-May 23-May 23-May 23-May 23-May 23-May 23-May 23-May PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 104.87 106.43 52,147 18.90 51.53 1,250.8 42,985 17.03 7,234 6.14% Forex Reserves 12-May $ Bn 20.68 0.01% 0.31% 1.51% NM** 0.96% -0.71% -0.20% -0.51% -0.74% -0.01% WoW -0.54% YoY -2.79% -2.29% 19.88% -40.12% -204.75% USD-Interbank USD-Open MKT KSE-100 index FIPI Jul-Apr 17 Remittances $ Bn 15.60 Jul-Apr 17 Exports* $ Bn 16.92 Jul-Apr 17 Imports* $ Bn 43.47 Jul-Apr 17 Trade Balance* $ Bn -26.56 Jul-Apr 17 Current Account $ Mn -7,247 % 4.09 Avg. CPI-FY17* Jul-Apr 17 May-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 May-16 EUR, 23-May-17, 117.7 USD, 23-May-17, 104.8 Aug-16 USD Nov-16 GBP Feb-17 May-17 Source: KCCI Research ; Oanda.com EUR Quote of the Day “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” Bill Gates Chart of the Day Most Peaceful Countries 2016 5 200 153 4 3 180 160 3.15 1 2 3 4 6 5 7 8 9 10 140 120 100 $5Bn spent on debt servicing in July-March External debt servicing rose to $ 5Bn by the end of 3QFY17. The SBP report indicates that external debt servicing will be 25% higher than a year ago. Debt servicing will be more difficult to manage once the repayment on Chinese loans begins. It can be around $ 5Bn a year for Chinese loans alone by 2021. Dawn. 2 Imports of pulses cross 1Mn tons Pakistan imported more than 1Mn tons of pulses in 10MFY17 due to lower domestic production of chickpeas (gram whole). A total of 1.09Mn tons of various pulses arrived in the country, resulting in the import bill of $ 834Mn. In contrast, 752,172 tons of pulses worth $ 485Mn were imported in the same period last year. Dawn. 0 Ogra allowed laying 18,531km gas pipelines in five years The Oil and Gas Regulatory Authority (Ogra) had allowed Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) to lay 18,531km gas pipelines in their respective operational areas at the cost of PKR 29,37Mn during the last 5 years. As per the procedure, SNGPL and SSGC submit their revenue requirement petitions, including different projects and distribution development schemes under the Ogra Ordinance, 2002, seeking permission to execute them. Accordingly, the authority after thorough evaluation and deliberation allowed SNGPL and SSGC to lay 16,450km and 2,081km pipelines, amounting to PKR 23,42Mn and PKR 5,94Mn, respectively during FY13 to FY16. The News. GBP, 23-May-17, 136.0 1.19 1.25 1.28 1.29 1.36 1.36 1.37 1.39 1 1.40 1.41 80 60 40 20 0 Score Rank (RHS) Source: KCCI research, The Institute for Economics and Peace 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