Pakistan Daily Economy Update - 30 August

Transcription

1. Aug . 30, 2016 KCCI - eBulletin Pakistan unveils long-term CPEC cooperation plan Pakistan has unveiled the synopsis of CPEC long-term plan that envisaged cooperation in the job-intensive sectors with words of caution from Chinese experts who spoke about risks to smooth implementation of the partnership framework. The govt. shed light on draft of the long-term plan for the period 2025-30 during the CPEC summit held in Islamabad on 29th Aug, 2016. The plan identifies key areas and major projects including the development of an integrated transport system, IT connectivity, energy cooperation, industrial parks, agricultural development and poverty alleviation which are expected to be completed between 2018 and 2025. The other areas of cooperation will cover livelihood, water resources, livestock, people-to-people communications and financial matters. Tribune. FY16 external debt, liabilities hit record $ 73Bn level The country's external debt and liabilities rose to historic level of $ 73Bn in FY16 compared to $ 65.14Bn in FY15 mainly due to IMF inflows and massive increase in public debt. The total stocks of debt and liabilities comprise public debt, Paris Club, Euro Sukuk Global Bond, IMF loan, foreign exchange liabilities, Public Sector Enterprises (PSE) guaranteed debt and non- guaranteed debt, bank borrowing, nonresidential deposits, and private sector guaranteed debt, non-guaranteed debt and debt liabilities to direct investors. However, public debt has major share in the external debt and liabilities which amounted to $ 61.36Bn, up by $ 6.68Bn in FY16. Similarly, IMF debt, also included in public debt, surged by 47% to $ 6.04Bn at the end of Jun.’16 compared to $ 4.10Bn in Jun.’15, depicting an increase of $ 1.94Bn. BR. Import of wheat: ECC decides to increase RD to 60% The Economic Coordination Committee (ECC) has decided to increase regulatory duty on wheat import from 40% to 60% on the proposal of National Food Security and Research Ministry in order to discourage wheat import. The decision was taken to protect local farmers from the impact of falling international wheat prices. As sufficient quantity of Calcium Ammonium Nitrate (CAN) is available, the ECC allowed its export subject to the condition that manufacturers would not increase domestic price and would provide an end user certificate that CAN would be used for agriculture purposes only. The ECC also approved extension of reduced withholding tax rate of 0.4% for non- filers up to 31 Dec.’16. BR. Cross verification of input tax adjustment: FBR uploads MIS reports for registered taxpayer FBR has uploaded Management Information System (MIS) reports pertaining to cross verification of input tax adjustment for all sales tax registered taxpayers under new return filing system where discrepancies would now be available to the taxpayers under the said reports. Taxpayers, who have filed their returns under the new module recently introduced by the FBR, would be able to see the MIS report, electronically. For the returns filed for tax period of Jul.’16 in Aug.’16, the MIS reports have been uploaded for taxpayers, containing discrepancies or information about the transactions taking place in supply chain. BR. Restoration of input tax adjustment: Ordinance may be applicable retrospectively The Ordinance expected to be approved by the federal cabinet meeting, to be held on Aug. 31, 2016 for restoration of input tax adjustment to provinces, may be applicable retrospectively from Jul. 1, 2016. The disallowing of input tax adjustment to the provinces was applicable from Jul. 1, 2016 under the Finance Act 2016. If the federal cabinet would grant approval of the amendment in the Finance Act 2016, it would help the FBR in avoiding unnecessary litigation in courts. BR. Economic Indicators Date / Period Unit Value USD-Interbank List of Indicators 29-Aug PKR 104.83 Change Daily 0.01% USD-Open MKT 29-Aug PKR 104.84 -1.19% KSE-100 index FIPI 29-Aug 29-Aug Pts. $ Mn 40,023 1.25 0.24% NM** Crude (JU'16) 29-Aug $/bbl 46.98 -0.82% Gold (MY'16) 29-Aug $/oz 1,322.0 0.03% Gold (10g) Local 29-Aug PKR 44,485 -0.39% Silver (MY'16) 29-Aug $/oz 18.83 0.63% Cotton(KHI)-40 kg 29-Aug PKR 7,272 0.00% Kibor-6M 29-Aug % 6.04% 0.00% Forex Reserves 19-Aug $ Bn 23.08 2.02% Remittances Jul-16 $ Bn 13.28 -20.14% Exports* Jul-16 $ Bn 1.48 -7.45% Imports* Jul-16 $ Bn 3.56 5.52% Trade Balance* Jul-16 $ Bn -2.08 -17.20% Current Account Avg. CPI-FY17* Jul-16 Jul-16 $ Mn % -591 4.12 -152.56% WoW YoY Jul-16 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 WAPDA signs PKR 10.8Bn contract with Alstom Wapda has signed a contract worth PKR 10.81Bn with Alstom Hydro France for the refurbishment and upgrading of 6 power generating units installed at the Mangla Hydel Power Station. The Mangla refurbishment project, envisaging additional power production of 310MW, will be implemented in phases. The first 2 units will be refurbished by 2018, the next two by 2019 and the other two by 2020. The approved cost of the project is PKR 52.22Bn.Whereas, USAID is providing $ 150Mn as grant for the project while rest of the amount will be arranged by Wapda through loans. Tribune. 145 FBR raises additional PKR 2.7Bn through laws enforcement The broadening of tax base (BTB) drive of FBR appears to be paying off as the tax authorities managed to collect an additional PKR 2.7Bn through tightening noose around the untaxed and undocumented sector during the last three years. FBR recovered the said amount owing to its ongoing BTB campaign by compelling the non-compliant persons to file their income tax returns and issuing notices. FBR collected PKR 1.77Bn through enforcement of income tax returns and the remaining amount of PKR 921Mn was generated against the demands raised through the notices up to June 30. The News. 85 GBP, 29-Aug-16, 137.9 EUR, 29-Aug-16, 117.8 135 125 115 105 USD, 29-Aug-16, 105.3 95 75 Aug-15 Nov-15 USD Feb-16 GBP May-16 Source: KCCI Research ; Oanda.com EUR Quote of the Day Pakistan, Iran discuss ways to remove trade barriers Pakistan and Iran discussed measures to boost economic relations between the two countries through removing technical barriers to trade. The both sides discussed on potential products which can be exported and imported between the two countries to increase the trade volume which is not so encouraging. The delegation has discussed the ways to increase the bilateral trade through the free trade agreement in practice and expanding the number of free zones in both the countries. The News. “Entrepreneur 'just denotes that you recognize that you're doing things across disciplines and that you're blazing your own path.” IMF finds cigarette taxes’ pass-through incomplete The pass-through of cigarette taxes to retail prices in Pakistan is mostly incomplete in magnitude, according to the IMF. On average, a onerupee tax increase is estimated to lead to an increase of only Re0.8 in retail cigarette prices,” the IMF said in working a paper estimating the magnitude and speed of tax pass-through across tobacco products at different price points in Pakistan. The News. Chart of the Day Deals worth $ 350Mn closed at Textile Asia The three-day 16th International Textile Asia Exhibition 2016, which concluded, witnessed deals worth more than $ 350Mn. Over 500 foreign delegates participated in the mega event and orders worth $ 160Mn were booked on the first day. Dawn. 10% 140 8% 6% 130 4% 120 2% 0% 110 LSM Index Y-o-Y Growth (RHS) May/16 Jan/16 Mar/16 Nov/15 Jul/15 Sep/15 May/15 Jan/15 Mar/15 Nov/14 Jul/14 Sep/14 May/14 Jan/14 Mar/14 Nov/13 Jul/13 Sep/13 May/13 -2% Jan/13 100 Mar/13 Pak industrial sector booms on pro-business policies The industrial sector of Pakistan is expected to grow up to 7.7% during current fiscal year, as compared to the growth of over 6.4% during the FY15-16. This projection is based on surveys and statistics collected by the ministries of finance and industries and the Planning Commission of Pakistan. Government has also granted several tax incentives to domestic and foreign investors. These incentives were offered to sectors ranging from auto to telecom and IT sector. Dailytimes. 12% 150 Nov/12 Domestic laws strengthened against money laundering: Dar Pakistan has strengthened its domestic laws to prevent money laundering and terror financing which are global problems that need to be tackled through mutual cooperation and strict preventive measures, said Finance Minister. He was addressing the 9th National Executive Committee (NEC) meeting on anti-money laundering (AML) and reviewing Pakistan’s preparation for Mutual Evaluation due in 2018. The Mutual Evaluation is an international mechanism to assess AML and combating financing of terrorism (CFT) regime in a country. Dawn. 14% Jul/12 K-Electric confirms acquisition talks K-Electric Ltd (KEL) has confirmed that Dubai-based private equity firm Abraaj Group is evaluating the possibility of divesting (directly or indirectly) its stake in the power utility. Shanghai Electric had affirmed in a statement on the Shanghai Stock Exchange last week that it was not the only company participating in the bidding process. Reports earlier said that Chinese clean-energy group Golden Concord Holdings was also in the run for control of KEL. Dawn. LSM Index & Growth Trajectory (FY13-FY16) 160 Sep/12 China urged to open businesses in Pakistan to cut labor cost Economic and trade experts at the China-Pakistan CEOs Forum urged Chinese companies to open their businesses in Pakistan to overcome the high labor costs they have been facing in China, as Pakistan has huge bulge of youth population that can be utilized for economic development. The experts were participating as panelists in a discussion during the second session of the CPEC Summit and Expo. The summit was organized by the Ministry of Planning, Development and Reforms. Dailytimes. Pharrell Williams -4% Source: PBS Source:KCCI KCCIResearch, Research, PBS 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