Pakistan Daily Economy Update - 25 September

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1. Sep . 24 - 25, 2017 KCCI - eBulletin Muffasar Atta elected KCCI chief Muffasar Atta Malik, Abdul Basit Abdul Razzak and M. Rehan Hanif have been elected unopposed as President, Senior Vice President and Vice President of Karachi Chamber of Commerce and Industry for the year 2017-18 respectively. Muffasar Atta Malik has become the 25th President of KCCI. The Managing Committee of KCCI, in its meeting held on Sep. 23, 2017, unanimously elected office bearers for year 201718. Chairman BMG & former president KCCI, Siraj Kassam Teli, vice chairmen BMG Tahir Khaliq, Zubair Motiwala, Haroon Farooki and Anjum Nisar have congratulated the newly elected office bearers and hoped that they will strive hard to further improve the KCCI functioning and work diligently to resolve the issues being faced by business and industrial community. The newly elected office bearers will assume charge on Wednesday, Sep. 27, 2017 at the 56th Annual General Meeting. BR - Sun. Ministry removes director general DGTO The Commerce Ministry has taken notice of repeated complaints in Directorate General of Trade Organizations (DGTO) and removed its Director General, ordering an inquiry against him. The Ministry was reportedly irked by purported corruption in DGTO as parliamentarians, top officials and top businessmen have shared evidences with the Minister and Secretary. Most of the positions in DGTO comprises the officers of Commerce and Trade (C&T) Group. BR – Sun. New textile package on cards as government seeks more proposals Federal minister for commerce and textile informed that the new textile package will soon be announced to give the country's exports a much needed upward thrust. Meanwhile, state minister of commerce and textile has said that the ministry seeks concrete and comprehensive proposals from the representatives of all the textile associations, especially from the value-added sub-sector, for strengthening textile industry and boost its exports. The News-Sun. Dealing with export slide challenge: revised package to be announced soon: minister Commerce and Textile Minister Pervaiz Malik has said that a revised package for exporters would be announced soon to enhance the country's exports, clarifying that there will be no relief in tariffs of electricity and gas as well as taxation. Minister has further said that Ministry is not going to increase tax incentives but will simplify procedure and improve liquidity to give advantage to exporters in stabilizing cost of production. The Minister informed that intensive meetings have been held with the FBR and the govt. would curtail non-essential imports. BR – Sun. FBR ought to extend deadline for returns filing Tax experts have said that the FBR has to extend the deadline for filing of tax returns for ty17 as wealth statement form is yet to be finalized and uploaded on its e-filing system. On 20th Sep, FBR issued a draft of wealth statement form through and SRO and asked the stakeholders to give their inputs within seven days to finalize the return form for the tax year 2017. The last date for filing of returns for TY17 by salaried and business individuals is 30th Sep’17. The News-Sun. FBR begins collecting individuals’ account details for OECD members Tax authorities have kicked off a planned program under which they will share foreign individuals’ financial-account information with the member countries of the Organization for Economic Cooperation and Development (OECD). The financial institutions will provide details of all new accounts of foreign nationals opened on or after July 1, 2017 by September 2018,” the FBR said. FBR has issued a notification regarding the schedule for exchange of information, will share the details of financial accounts of foreigners, opened after 1st Jul’17, with the OECD countries. The News-Sun. Finance ministry says complying with debt-to-GDP limit in FRDL Act 2005 Finance ministry has said that the government is complying with the benchmark of debt-to-GDP ratio set in the Fiscal Responsibility and Debt Limitation (FRDL) Act 2005 with total debt and liabilities standing at PKR 19.6Tn as of June end. Finance ministry claimed that the limit of 60% of debt to GDP will be applicable by end Jun’18 as per the Fiscal Responsibility and Debt Limitation Act, therefore, the government is not presently in violation of this threshold of FRDLA. The News-Sun. Share of short-term public debt rises to mammoth PKR 6.6Tn The share of short-term public debt in total domestic debt has spiked to 44.2% of total domestic debt or PKR 6.6Tn by Jun’17, increasing rollover and re-financing risks for Pakistan. The development comes as commercial banks discourage the federal government from seeking long-term loans due to uncertain economic conditions in the future. The government’s overall domestic debt has consequently swelled to PKR 14.9Tn, up 9% as compared to FY16, according to data released by SBP. Tribune-Sun Finance ministry hits back at critics Ministry of Finance has reiterated its position that Pakistan’s economic indicators were performing well and had been acknowledged \ internationally, resulting in an improvement in the country’s credit rating. The statement came in the wake of mounting criticism in the Economic Indicators List of Indicators Date / Period Unit Value Change Daily Crude (NO'17) Gold (OC'17) Gold (10g) Local Silver (OC'17) Cotton(KHI)-40 kg Kibor-6M 22-Sep 22-Sep 22-Sep 22-Sep 22-Sep 22-Sep 22-Sep 22-Sep 22-Sep 22-Sep PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 105.42 105.90 42,750 -1.02 50.65 1,295.8 44,700 16.95 6,537 6.17% Forex Reserves 15-Sep $ Bn 20.10 0.00% -0.09% -0.06% NM** -0.14% -0.24% 0.19% -0.94% 0.82% 0.00% WoW -2.36% YoY 13.18% 11.80% 24.85% -33.52% -102.10% 154.74% USD-Interbank USD-Open MKT KSE-100 index FIPI Jul-Aug 17 Remittances $ Bn 3.50 Jul-Aug 17 Exports* $ Bn 3.50 Jul-Aug 17 Imports* $ Bn 9.79 Jul-Aug 17 Trade Balance* $ Bn -6.29 Jul-Aug 17 Current Account $ Mn -2,601 Foreign Direct Inv. $ Bn 0.46 Jul-Aug 17 Jul-17 LSM Growth* % 12.98 % 3.41 Jul-Aug 17 Avg. CPI-FY18* Discount Rate % 5.75 Jul-17 WoW= week Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Major Currencies 155 GBP, 24-Sep-17, 142.4 145 135 125 EUR, 24-Sep-17, 125.7 115 105 95 Sep-16 USD Dec-16 GBP EUR Mar-17 Regional trade mostly in favour of Pakistan Pakistan maintained a trade surplus with all neighboring countries, except India, in 2MFY18. The annual increase in Pakistan’s overall exports in July-August was 11.8%. Indian exports to Pakistan in the period under review rose 12% to $ 216Mn. In contrast, Pakistan’s exports to India declined 35.3% to $ 58Mn, resulting in a bilateral trade deficit of $ 158Mn. Dawn-Sun. KCR one step closer to completion under CPEC The Karachi Circular Railway (KCR) being granted approval by the CPEC joint working group is a great victory for the people of the city, said Sindh CM Murad Ali Shah. Shah said an important meeting of the joint working group discussed the three projects the Sindh government had proposed to be included in CPEC. These are the KCR, Keti Bunder and special economic zone at Dhabeji. The meeting approved the projects and recommended them to CPEC’s joint coordination committee for implementation under the CPEC framework. Tribune-Sun. LNG deal with Qatar has placed Pakistan in unfavorable position A large portion of the 89-page LNG contract uploaded on the PSO website has been blacked out due to a confidentiality clause (25.1) and have not been shared with the public. The sensitive information that has been kept secret pertains to the contract price, adjusted annual contract quantity, annual upward flexibility quantity, downward flexibility quantity, annual make good quantity, buyers obligation to take or pay, net proceeds, take or pay or make up LNG by buyer, and payment schedule. The specific information has not been shared even with the media, the parliament, or the senate standing committee in spite of repeated requests. The document blocked out contain several objectionable clauses and says that the price review notice to renegotiate the contract price cannot be earlier than 2026 according to the LNG agreement signed on Feb. 10, 2016 between PSO and Qatargas. BR – Mon. Sep-17 Source: KCCI Research ; Oanda.com Quote of the Day "People who lose their relevance get stuck in the past because they’re no longer in the present moment." Marc Benioff press about the state of the economy. Dawn-Sun. CPEC body approves KCR plan implementation Sindh CM has said that the Karachi Circular Railway project had been approved by the Joint Working Group of CPEC, which, he said, is a big success of the people of Karachi. He claimed that two other projects, also approved, would require certain formalities to complete before being implemented. Mr. Shah said the CPEC would help build a robust and stable economy in Sindh together with generating sound prospect for the province to revive and expand its road connectivity. Dawn-Sun. USD, 24-Sep-17, 105.5 Jun-17 Chart of the Day Pakistan's Economic Indicators (2MFY18 Vs. 2MFY17) 9.79 10.00 9.00 7.84 8.00 7.00 5.75 6.00 5.00 4.00 3.09 3.50 3.13 3.84 3.50 5.75 3.16 3.00 2.00 0.18 0.46 1.00 0.00 Remittance ($ Bn) FDI ($ Bn) Exports ($ Bn) Imports ($ Bn) 2MFY17 2MFY18 Average CPI (%) Policy Rate (%) Source: KCCI Research, SBP, PBS Disclaimer This report has been prepared by KCCI Research & Development Cell. The information Arbitration in favour of IPPs: NTDC laxity behind PKR 10.9Bn decree contained herein have been compiled or arrived at based upon information obtained from Lackluster performance of the NTDC has provided grounds to the London Court of International Arbitration (LCIA) for issuance of an interim sources believed to be reliable and in good faith. Such information has not been independently award against the NTDC to pay immediately outstanding amount of PKR 10.98Bn to nine IPPs. IPPs invoked the apex court's jurisdiction in verified. 2012 under Article 184(3) of the Constitution as there were differences between the IPPs and NTDC with respect to non-payment and 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 delayed payment of the amounts due against the NTDC. BR – Sun. accuracy. Contact: res@kcci.com.pk