Pakistan Daily Economy Update - 4 July

Transcription

1. Jul . 4, 2017 KCCI - eBulletin Average inflation rate recorded at 4.16% Pakistan's average inflation rate for the just ended FY17 has been recorded at 4.16%. CPI noted an increase of 0.41% in Jun.’17 over previous month and 3.93% in Jun.’17 over the same month a year ago. An increase of 3.05% has been observed in the prices of food & non-alcoholic beverages, 2% in non-perishable food items, 9.21% in perishable food items, 3.77% in clothing & footwear, 5.10% in housing, water, electricity, gas and other fuels, 2.40% in furnishing and household equipment maintenance on year-on-year basis. BR. Tariq Mahmood Pasha appointed new FBR chairman The federal government has appointed Tariq Mahmood Pasha as the new chairman of the FBR. Pasha, a grade 22 officer belonging to Inland Revenue Service, will also be the Secretary Revenue Division. Before his appointment as FBR chairman, Pasha was serving as Special Assistant to Finance Minister, Secretary Economic Affairs Division and Secretary Statistics Division. Tribune. FTA 2006: China urged to restore margin of preference In a meeting between Pakistan’s readymade garments’ exporters and China Chamber of Commerce for Import and Export of Textile and Apparel (CCCT), Commerce Minister Khurram Dastagir has urged China to restore the margin of preference that the country had originally agreed in FTA 2006, to minimize the trade imbalance between the two countries. The meeting decided to give a practical shape to the MoU signed between Pakistani exporters and CCCT in Mar.’16 to promote and expand cooperation between Pakistan and Chinese textile and apparel companies. BR. PKR 180Bn package fails to arrest export slide The govt.'s PKR 180Bn export incentive package has failed to arrest declining trend in exports. Under the package, duty draw back rates were reduced for textile garments to 7%, textile made ups 6%, processed fabric 5%, Yarn and grey fabric 4%, sports goods, and leather and footwear 7%. However, govt. has not allocated funds in budget FY18 due to which exporters are not taking it seriously, or calculating the rebate in their cost, or going for aggressive marketing. The country's trade deficit rose to $ 29.99Bn in 11MFY17 42.12% higher than in the comparable period of the year before which registered $ 21.107Bn - with serious ramifications on the balance of payment position of the country. BR. Price, institutional distortions contribute to power crisis: WB World Bank (WB) in its working paper, "Impact of Electricity Shortages on Firm Productivity, Evidence from Pakistan," has stated that Pakistan has the most severe power shortages in South Asia where firms report 2.5 outages each day with an average duration of 13.2 hours. Using a sample of 4,500 manufacturing firms for 2011, the paper estimates that in some areas of Pakistan summertime load shedding of 8 to 10 hours per day is typical, and in some areas up to 18 to 20 hours of load shedding happens on a regular basis. BR. Govt approves coal supply deal with any Thar developer As the 660MW coal-based power plant planned by Lucky Cement at Bin Qasim, Karachi, suffers a delay following reluctance of Sindh Engro Coal Mining Company (SECMC) to sign a supply agreement, the government has allowed all power companies interested in setting up coal-based power plants to enter into a supply deal with any developer of coal mines in Thar, instead of binding them to a particular mine. The power plant by Lucky Electric Power Company Limited will be the first plant to use Thar coal as fuel, 350km from the mine’s mouth. Lucky Electric’s tariff will be marginally lower compared to the mine-mouth project despite the transportation cost because of a lower rate of return, higher plant efficiency and no water cost. Tribune. PSDP disbursement characterized by discrepancy A discrepancy of PKR 29Bn is evident in the disbursement of PSDP for FY17 as noted in the FY18 budget documents (PKR 715Bn) and data uploaded on the website of Planning Ministry (PKR 744Bn). The Planning Ministry’s website reveals that the govt. released 93% of PKR 800Bn budgeted for FY17 including PKR 199Bn for foreign aid. The govt. released PKR 205.6Bn (85.74% of total budgeted amount), including PKR 8Bn foreign aid, for development projects of various federal ministries against the total budgeted allocation of PKR 239.8Bn. BR. \ Transport department lags behind in deliverables despite months of promises Sindh Transport Minister has said that as many as 635 new buses in the first phase would be operational on Karachi’s roads in the metropolis in a month or two, and illegal transport terminals would be relocated outside the city. He was responding to the legislators’ queries during Question Hour that pertained to the transport department in the Sindh Assembly. Responding to the question regarding buses for the interior of the province, the minister said that 250 new buses would also be launched to connect the provincial capital with the divisional headquarters in the next two months. Dawn. Economic Indicators List of Indicators Misdistribution of water cuts chilli cultivation by half in Sindh Persistent misdistribution-driven shortage of irrigation water in traditional channels has devastated the harvest of chilli , reportedly bringing the cultivation area of this major cash crop down by 50% this year. In Kunri, chilli was grown on around 150,000 acres last year but now it’s standing on only 75,000 acres. Kunri Town, once known as 'chilli capital in Asia', is now being ignored by the government in terms of ensuring water distribution in watercourses. The News. FBR eyes additional PKR 10Bn in revenue from share transactions FBR is expected to raise an additional PKR 10Bn in revenue from taxes on shares trading in the FY18. The government introduced several changes in tax rates and Income Tax Ordinance 2001 for tax year 2018 in order to generate additional revenue from the equity market instead of burdening public ahead of general elections next year. Government, through Finance Act 2017, increased tax on dividend on shares income to 15% from 12.5%. Tax rate on dividend received from mutual funds was raised to 12.5% from 10% earlier, but the increased rate is applicable only if dividend income is above PKR 2.5Mn. The News. Low property tax collection to be blamed for poor city maintenance Keeping cities clean and functional is problematic for local government in Pakistan as the property tax collected is inadequate to cover the costs of the services like roads, streetlights, policing and sanitation. In Karachi, the largest city of the country, the number of property units exceed 875,000 but the residents who pay property tax are a little above 100,000. Since the property values assessed by the deputy commissioners are very low, the tax collection is also very low despite high tax rate. Experts estimate that if the value of the properties was assessed on current market price, and the tax rate was reduced by 50%, it would not be an unbearable burden on the taxpayer. The News. Unit Value Change Daily 3-Jul 3-Jul 3-Jul 3-Jul 3-Jul 3-Jul 3-Jul 3-Jul 3-Jul 3-Jul PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 104.90 104.88 44,665 44,665 47.00 1,219.1 43,114 16.07 6,537 6.15% 23-Jun $ Bn 21.36 0.04% -0.97% -4.08% NM** 4.65% -2.15% 0.40% -3.31% -7.58% 0.00% WoW 4.90% YoY -2.13% -3.13% 20.60% -42.12% -177.56% Crude (AU'17) Gold (JY'17) Gold (10g) Local Silver (JY'17) Cotton(KHI)-40 kg Kibor-6M Forex Reserves Jul-May 17 Remittances $ Bn 17.46 Jul-May 17 Exports* $ Bn 18.54 Jul-May 17 Imports* $ Bn 48.54 Jul-May 17 Trade Balance* $ Bn -30.00 Jul-May 17 Current Account $ Mn -8,929 % 4.16 Avg. CPI-FY17* Jul-Jun 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 Jul-16 GBP, 3-Jul-17, 136.0 EUR, 3-Jul-17, 119.4 USD, 3-Jul-17, 104.8 Oct-16 USD GBP Jan-17 Apr-17 Jul-17 Source: KCCI Research ; Oanda.com EUR Quote of the Day "Genius ain't anything more than elegant common sense." MCC Gwadar exceeds collection target by 18% The Model Customs Collectorate (MCC) Gwadar has collected PKR 3.94Bn more in duty and taxes over the target of PKR 22.49Bn during FY17. The growth of 18% in revenue collection over the target was mainly contributed by sales tax collection of PKR 16.95Bn, followed by customs duty PKR 6.93Bn, withholding tax PKR 2.52Bn and FED PKR 24.04Mn. Dawn. Stocks wipe over 4% off on political anguish The benchmark KSE 100-Index of Pakistan Stock Exchange (PSX) shed 4.08% or 1,899.88 points to close at 44,665.41 points on the first trading day of FY18. KSE 30-Index also fell 4.49% or 1,088.32 points to end at 23,162.52 points. As many as 359 shares were active of which 21 increased, 326 decreased and 12 remained unchanged. The ready market volumes stood at 156.48Mn shares as compared to 235.70Mn shares a day earlier. The News. Date / Period USD-Interbank USD-Open MKT KSE-100 index FIPI Josh Billings Chart of the Day 300 250 Top Profit Repatriating Sectors Based on FDI For 11MFY17 265.86 219.12 200 150 100 150.64 142.96 94.41 85.29 50 82.14 61.43 51.14 50.88 0 Source: KCCI Research, SBP Mn in US$ 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