Pakistan Daily Economy Update - 24 November
- November 24 , 2022 KCCI - eBulletin Malaysia wants FTA review to boost trade Consul General of Malaysia Herman Hardynata Bin Ahmad has said that the FTA, signed in 2008, needs to be reviewed to boost the existing trade between Pakistan and Malaysia, while addressing the members of KCCI on 23rd Nov’22. Malaysia is currently facing a dire shortage of manpower and is ready to welcome more workforce from Pakistan as currently out of a total assigned quota of 100,000 only 3,000 workers are present Source:in Malaysia, he disclosed. President KCCI Tariq Yousuf said Pakistan’s exports to Malaysia remained at $ 432.69Mn while the imports stood at $ 1.15Bn in FY22, showing two-way trade in favor of Malaysia. He also mentioned that Sindh govt. has decided to reserve 3,000 acres of forestland in the Thatta district near the coastal belt for the plantation of palm oil trees, to which the consul general said was a good investment opportunity for Malaysian companies. President KCCI asked the Malaysian govt. to review tariffs on palm oil products and facilitate crude oil refiners’ tariffs in addition to negotiating prices or quotas in the form of forward contracting to help Pakistan develop this industry. Dawn. Tenure of chambers’ office-bearers: NA panel approves new amendment to TOA NA Standing Committee on Commerce has “scrapped” amendment on the commencement of tenure of elected office-bearers of Chambers. The Committee approved an amendment to “The Trade Organization Act (amendment Bill), 2022 (Govt. Bill)”, to increase the tenure of officebearers of Chambers to 2-years (from 1-year), to be effective from 1st Jan’23, implying prospective affectivity of amendment. The Committee also approved “The Trade Dispute Resolution, Bill 2022,” which has already been approved by the Cabinet Committee on disposal of Legislative Cases (CCLC) and the Federal Cabinet. BR. SBP makes account opening mandatory for buying $ 2,000 or above In a major move to restrict dollar outflows, the SBP has made it mandatory to open an account before buying $ 2,000 or above. Previously, SBP had already the total amount for buying dollars by 50% from $ 10,000 to $ 5,000. Dawn. PKR 965Bn revenue collection target set for Dec Revenue collection target of FBR for Dec’22 has been fixed at PKR 965Bn requiring enormous growth of 61% in the last month of 2QFY23, only if tax projection of PKR 537Bn in Nov’22 are met, or else it would exceed 61%. Breakup of the monthly tax collection target for Dec’22 revealed that the income tax target has been set at PKR 546Bn showing a growth of 113%, GST target has been set at PKR 273Bn (20%), FED has been projected at PKR 41Bn (64%), and customs duty has been estimated at PKR 104Bn (14%). BR. Construction of freight terminal at Port Qasim: Special sub-body formed to finalise terms of reference NA Standing Committee on Railways has constituted a special sub-committee to finalize Terms of Reference (ToRs) on the construction of the freight terminal at Port Qasim, Karachi. BR. Minister launches ‘smartphone for all’ initiative Global System for Mobile Communications Association (GSMA) and Qistpay in collaboration with the Ministry of IT and Telecom have launched the ‘Smartphone for All’ initiative to facilitate affordable smartphone ownership for low- and middle-income consumers in Pakistan on easy installments. According to the details, Qistpay enables Shariah Compliant Smartphone Financing on leading smartphone brands with plans ranging from 3-12 months with the fastest application approval process. Customers can avail the financing facility via the retail network, telecom partners, the Qistpay website and the Kistpay Whatsapp channel. Smartphones will be available through Qistpay in the price range of PKR 10,000 to PKR 100,000. BR. FBR concedes collecting significant amount of revenue thru power bills FBR has conceded before a parliamentary panel of collecting a significant amount of revenue through electricity bills, as effective tax rate is 58%/unit on commercial consumer and 29% on domestic consumers. FBR official admitted before the finance committee that there are various taxes on electricity bills including 17% General Sales Tax (GST) as well as other taxes and added that the impact of taxes on per unit electricity for commercial consumers is between 40 to 58%. BR. 40% fall in rice exports likely Due to severe damage caused to the rice crop by the floods in Sindh, rice exports are expected to decline by 40% this year, resulting in Pakistan losing over $ 500Mn in forex. Tribune. Flood recovery plan critical to supporting discussions: IMF IMF Resident Representative in Pakistan Esther Perez Ruiz told that IMF staff continued discussions with the Pakistani authorities over policies to reprioritize and better target support toward humanitarian and rehabilitation needs, while also accelerating reform efforts to preserve macroeconomic and fiscal sustainability. The timely finalization of the flood recovery plan is essential to support the discussions, along with continuing financial support from multilateral and bilateral partners, she added. However, the Fund and Finance Division have yet to agree on \ the starting date for negotiations on the 9th review under the EFF program. BR. OMCs’ HSD premium: ECC directs PD to develop certification mechanism ECC of the Cabinet has directed the Petroleum Division to develop a mechanism for certifying the premium of OMCs on imported HSD. However, oil industry expressed serious concerns on procurement of HSD, as the product molecule was either not available in the Gulf market (due to increased demand of the product in the western and European market) or higher premiums were being charged in view of country specific risk in relation to supplies to Pakistan. Meanwhile, PSO’s spot tender opened on 16th Nov’22, for HSD delivery during 26th Nov- 5th Dec’22, turned out to be non-responsive, as no valid bid was received. BR. NHA seeks details of ‘misappropriated’ motorway funds from Sindh NHA sought details about the extent of funds released for land procurement for the motorway project, from Sindh govt., allegedly misappropriated in a mega scam, on 23rd Nov’22. A fact-finding committee of NHA held meetings with the real owners of the land and sought details of the matter from them. NHA has also demanded of the provincial govt. to hand over the matter to the NAB and FIA for inquiry into the scam. BR. List of Indicators Date / Period Unit Value Change Daily USD-Interbank USD-Open MKT 23-Nov 23-Nov PKR PKR 223.81 231.00 0.18% 0.49% KSE-100 index FIPI 23-Nov 23-Nov Pts. $ Mn 42,880 3.07 -0.11% NM** Crude Oil 23-Nov $/bbl 77.52 -4.66% Gold 23-Nov $/oz 1,753.0 0.64% Gold (10g) Local 23-Nov PKR 136,410 0.26% Silver 23-Nov $/oz 21.63 2.45% Cotton(KHI)-40 kg 23-Nov PKR 17,897 -1.77% Kibor-6M 23-Nov % 15.87 0.00% Forex Reserves 11-Nov $ Bn 7.96 WoW 0.03% Remittances Jul-Oct 22 $ Bn 9.90 -6.18% Exports* Jul-Oct 22 $ Bn 9.55 1.11% Imports* Jul-Oct 22 $ Bn 21.02 -16.14% Trade Balance* Jul-Oct 22 $ Bn -11.47 26.57% Current Account Foreign Direct Inv. Jul-Oct 22 Jul-Oct 22 $ Bn $ Bn -2.82 0.35 44.51% -52.06% YoY Jul-Sep 22 LSM Growth* % -0.40 % 25.49 Jul-Oct 22 Avg. CPI Discount Rate % 15.00 Oct-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 Nov-21 GBP, 23-Nov-22, 282.6 EUR, 23-Nov-22, 245.3 USD, 23-Nov-22, 229.9 Feb-22 GBP USD May-22 EUR Aug-22 Nov-22 Source: KCCI Research Quote of the Day “Success is getting what you want, happiness is wanting what you get.” W. P. Kinsella Current Account Balance ($ Mn) Jul-Oct'21 Jul-Oct'22 Oct'22 -567 Govt. to set up lab to ensure good governance Ministry of Planning Development has decided to establish governance innovation lab (GIL) that will aim to deliver good and transparent governance through civic engagement. Dawn. -2821 Sugar cane price fixed at PKR 302/40kg Provincial govt. has fixed the price of 40 kilograms of sugar cane at PKR 302. Chief Minister’s Adviser on Agriculture Manzoor Wassan told that a notification to this effect had been issued. Dawn. Minister seeks firms’ input on energy deals with Russia A “breakthrough” between Pakistan and Russia on the projects agreed between the two countries in the energy sector is expected in Dec’22. In this regard, State Minister for Petroleum has sought suggestions from the petroleum companies for the strategic meeting, and have directed firms to complete the paperwork and submit it in the session. Tribune. SBP ponders digital currency launch While addressing the Pakistan Fintech Forum 2022 on 23rd Nov’22, SBP Governor, said, “The central bank is researching central bank digital currencies (CBDCs) and is doing a ‘cost versus benefits’ analysis of issuing its own CBDC to harness the potential of distributed ledger technologies (DLT).” Tribune. Industry slams delay in effluent treatment plant Industrialists of the SITE Association have denounced the repeated cancellation of meetings of the project steering committee for the combined effluent treatment plant (CETP) and have called for swift initiation of the project, which is necessary for getting export orders. Tribune. -5305 Source: KCCI Research, SBP Note **Green-colored change in indicators depicts Improvement, whereas Red demonstrates Deterioration **If any member is interested in the procurement of high-tech products in the field of off-shore drilling and recording of siesmic waves, they may contact email@example.com or SRC “Progress” JSC (a Russian Company) at (https://en.samspace.ru/).