Pakistan Daily Economy Update - 3 April

Transcription

1. Apr . 03, 2018 KCCI - eBulletin CPFTA-II talks hit a snag Pakistan and China have failed to evolve consensus on CPFTA-II as both sides refused to accept each other’s offer. In a 10th round of meeting, Pakistan urged for concessions for its textile sector but China did not agree for its proposal, which led to a deadlock-like situation. In a meeting, China expressed its willingness to allow duty-free access of 57 items from Pakistan immediately and 100% Electronic Data Exchange (EDE) but it is not ready on claw back of 5 items. Meanwhile, Commerce Minister, Haroon Akhtar and other stakeholders have also opposed the signing of FTA-II until local industry is not satisfied. The Chinese side was represented by Vice Minister for Commerce Wang Shouwen, whereas Secretary Commerce Younus Dagha. BR. Pakistan, China working out ways to counter CPEC bottlenecks In the wake of emerging bottlenecks for finalizing financing mechanism of the multiBn dollars projects to be included in CPEC, both China and Pakistan countries are striving to come up with new mechanism for ensuring completion of projects without any delays. From Pakistani prospective, there has been increased recognition that the financing agreements should be thoroughly checked before signing any future agreement as current account deficit is bound to increase when repartition of investments and loan repayment would start from FY19. The Chinese side has complained that there are duplication of forums in the approval process that might take more time, so it needs to be streamlined for CPEC specific projects. The News. 2% further tax to be charged on supply of finished fabrics: FBR According to a recent notification, FBR has clarified the chargeability of further tax on goods under SRO 1125(1)/2011 and a condition has been added under sub-section (1A) of section 3 of the Sales Tax Act, 1990 through SRO 584(1)/2017. The clarification says that further tax @ 2% shall be charged on supply of finished fabrics which have undergone all industrial processes like calendaring, dying, bleaching and printing and are ready for use by the general public irrespective of the fact whether they have to undergo such processes like cutting, stitching etc. BR. Inflation falls to 3.2% in Mar.'18 Inflation decreased to 3.2% in Mar.’18 from 3.8% in Feb.’18 following a marginal decline in the prices of perishable food items and food & non-alcoholic beverages. Average inflation for 8MFY18 was decreased to 3.78% from 4.01% for 8MFY17. BR. Govt. eyes fiscal deficit at 4.5% for FY2019; PSDP cut on cards The ministry of finance is likely to keep fiscal deficit target at 4.5% of GDP for FY19 as compared to the projected deficit of 5.5% for the outgoing FY18 by tightening development expenditures. Keeping in view financing constraints, the ministry has slashed down the PSDP (Public Sector Development Program) size to the tune of PKR 750Bn for FY19 as against the allocation of PKR 1,001Bn for FY18. During the priorities committee’s meetings to finalize details of the budget, the ministries were asked to tighten their belts so they could seek increased allocation on the basis of proposed salary increase and inflationary pressures. The News. Planning ministry wants PKR 1.1Tn as development budget As budget meetings begin in earnest to assess financial needs of various arms of the government, the Planning Ministry has demanded allocation of PKR 1.1Tn for FY19, which is 37.5% higher than the ceiling indicated to it. As it is not satisfied with the finance ministry’s decision to allocate only PKR 800Bn for PSDP for FY19, it has sent a communiqué to the finance ministry, demanding PKR 1.1Tn instead. The finance ministry is of the view that the outgoing government should not allocate funds for new development schemes and this should be left to the next government. On the contrary, the planning ministry wants at least PKR 200Bn should be reserved in the new budget so that the next government may finance projects of its choice. Tribune. PKR 607Bn released for development projects under PSDP 2017-18 The govt. has so far released over PKR 607.44Bn under PSDP for FY18 for various ongoing and new schemes against the total allocation of PKR 1,001Bn. Out of these allocations, the govt. has released PKR 243.25Bn for National Highway Authority, \ whereas for WAPDA, an amount of PKR 35.77Bn has been released. Daily Times. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 2-Apr 115.60 116.15 0.26% 0.09% Crude (MY'18) 2-Apr 2-Apr 2-Apr 2-Apr PKR PKR Pts. $ Mn $/bbl 45,741 -2.01 63.04 0.40% NM** -2.46% Gold (MY'18) Gold (10g) Local 2-Apr 2-Apr $/oz PKR 1,345.4 50,571 1.00% 0.26% Silver (MY'18) Cotton(KHI)-40 kg 2-Apr 2-Apr $/oz PKR 16.65 8,038 2.31% 0.00% Kibor-6M 2-Apr % 6.51 $ Bn 17.95 -0.10% WoW -0.72% Remittances 22-Mar FY18 Jul-Feb 18 $ Bn 12.83 YoY 3.41% Exports* Imports* Jul-Feb 18 Jul-Feb 18 $ Bn $ Bn 14.85 39.13 11.66% 17.19% USD-Interbank USD-Open MKT KSE-100 index FIPI Forex Reserves Jul-Feb 18 Trade Balance* $ Bn -24.28 Jul-Feb 18 Current Account $ Mn -10,826 Foreign Direct Inv. $ Bn 1.94 Jul-Feb 18 Jul-Jan 18 LSM Growth* % 6.33 % 3.84 Jul-Feb 18 Avg. CPI Discount Rate % 6.00 Jan-18 WoW= Sources: KCCI Research, PMEXweek , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Major Currencies 175 GBP, 2-Apr-18, 162.5 165 155 145 EUR, 2-Apr-18, 142.4 135 125 115 USD, 2-Apr-18, 115.6 105 95 Apr-17 USD Pak-Iran rice trade via Dubai continues despite PTA Rice exporters have said that Pakistan and Iran’s bilateral trade can reach the level of $ 10Bn mark within very short period from the present volume of less than $ 800Mn, as both the countries have been doing their most of trade including rice via Dubai despite inking Preferential Trade Agreement (PTA) since 2006. The rice exporters have requested the Iranian govt. that the access of super basmati rice be facilitated through rational trade measures and technical barriers must be removed. In a ceremony attended by acting Consul-General of Iran, the exporters requested Iran to impose lower duty regime on imports of Pakistani rice in Iran under PTA. The Nation. Jul-17 GBP EUR Oct-17 Jan-18 Source: KCCI Research ; Oanda.com Quote of the Day "To profit from good advice requires more wisdom than to give it." John Churton Collins Sahiwal coal-fired power plants feared closure on non-payment of dues The Sahiwal coal-fired project, having 1,320MW generation capacity, has neared the brink of closure within 9 months of its operation as the govt. could not settle PKR 20Bn in power dues of the project. Against monthly payments of PKR 10Bn, the govt. is only clearing partial payments, which is hampering power production. However, the power ministry has argued 79% of outstanding amount has been paid till 2nd Apr’18. Sahiwal coal power project, the first energy sector initiative under CPEC, was built at a cost of $ 1.6Bn. The project was completed in a record period of 22 months. The News. Sindh demands refund of taxes collected by FBR Sindh govt. has demanded refund of PKR 9.83Bn which FBR deducted from the Provincial Consolidated Fund (PCF), carrying withholding tax and sales tax. Quoting Article 119 of the Constitution, the chief minister said the custody of the PCF and the authority to withdraw money from it rest with the provincial govt. He further added that arbitrary withdrawal of money from the PCF by the FBR is a clear violation of the Constitution. Dawn. -20.85% -50.03% 15.64% Chart of the Day AVERAGE YEARLY INFLATION (9MFY12-9MFY18) 12.0% 10.0% 10.8% 8.0% 8.6% 8.0% 6.0% 4.0% 5.1% 4.0% 3.8% 2.6% 2.0% 0.0% 9MFY12 9MFY13 9MFY14 9MFY15 9MFY16 9MFY17 9MFY18 US-Pakistan discuss economic Cooperation Source: KCCI Research, PBS US Acting Assistant Secretary of State Alice G. Wells and PM’s Financial Adviser Dr Miftah Ismail have discussed economic cooperation and overall security situation. Miftah while welcoming Ms Wells, said that such bilateral visits enhance Disclaimer understanding of each other’s’ point of view on important issues and shared with her the current state of the economy. He This report has been prepared by KCCI Research & Development Cell. The information contained informed her that the growth momentum generated during the last four years is likely to continue during the current year 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. and beyond. Dawn. 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