Pakistan Daily Economy Update - 5 January

Transcription

1. Jan . 5, 2018 KCCI - eBulletin Increase, imposition of RD: FBR’s proposal blocked Secretary Commerce Younus Dagha has reportedly blocked FBR’s proposal on increase and imposition of Regulatory Duty (RD), saying that Commerce Ministry has not been taken on board on this plan prior to bringing it before the ECC. In order to improve balance of payment position, ECC had approved increase/ levy of RD after which FBR issued SRO 1035(1)/2017 resulting in the levy of RD on 27 new items (137 tariff lines) and increase of RD on 31 existing items (219 tariff lines). However, a large number of representations were received against levy/increase from different stakeholders. An inter-ministerial committee comprising representatives from FBR and Ministries of Commerce and Finance was constituted. According to Revenue Division, during ensuing discussion, secretary Commerce Division stated that they support the proposals regarding withdrawal of RD and reduction of RD on the items respectively. BR. Date / Period Unit Value Change Daily 4-Jan 110.30 110.75 0.00% -0.76% Crude (FE'18) 4-Jan 4-Jan 4-Jan 4-Jan PKR PKR Pts. $ Mn $/bbl 41,909 8.55 61.89 0.88% NM** 0.16% Gold (FE'18) Gold (10g) Local 4-Jan 4-Jan $/oz PKR 1,324.2 48,257 0.52% -0.26% FBR kicks off FY19: budget preparation exercise FBR has started the budget preparation exercise for upcoming FY19 and announced deadline of Jan. 18, 2018 for submission of income tax budget proposals by all stakeholders. According to the FBR's letters issued to the Pakistan Stock Exchange, chambers, federations, trade bodies, associations, CA firms and tax bar associations, FBR is engaged in formulation of proposals for Finance Bill, 2018. BR. Silver (FE'18) Cotton(KHI)-40 kg 4-Jan 4-Jan $/oz PKR 17.22 8,359 0.31% 0.00% Kibor-6M 4-Jan % 6.16% $ Bn 20.15 0.00% WoW -0.17% Pakistan will meet repayment deadlines: minister In a meeting with Pakistan’s business community, State Finance Minister Rana Muhammad Afzal, has said that Pakistan will make payments to international organizations on time. The Minister also dispelled the notion of govt. facing a financial crunch and he clarified that Pakistan has enough financial resources to not only meet development expenses but also pay off the local and international debts. BR. Remittances 29-Dec FY18 Jul-Nov 17 $ Bn 8.02 YoY 1.29% Exports* Imports* Jul-Nov 17 Jul-Nov 17 $ Bn $ Bn 9.03 24.06 10.49% 21.12% Jul-Nov 17 Trade Balance* $ Bn -15.03 Jul-Nov 17 Current Account $ Mn -6,430 Foreign Direct Inv. $ Bn 1.15 Jul-Nov 17 Jul-Oct 17 LSM Growth* % 9.64 % 3.75 Jul-Dec 17 Avg. CPI Discount Rate % 5.75 Sep-17 WoW= Sources: KCCI Research, PMEXweek , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; -28.56% -90.74% 57.12% Funds meant for tackling poverty mainly spent on salaries, other areas More than three-fourths of PKR 462.7Bn, which is said to be spent by federal and provincial governments on poverty reduction programs, have actually gone to meeting non-development expenditures including salary payments. The Poverty Reduction Strategy Report (PRSP) for 1QFY18 showed that of the spending by the govts, a huge sum of PKR 354.4Bn was spent on meeting current expenditures including salary payments and other recurrent obligations. The finance ministry clubs spending in areas like road building, environment protection, education, health care, agriculture, rural development, law and order, justice administration and subsidies as poverty reduction expenses. Tribune. State Bank governor stresses promotion of SME’s Governor SBP, while chairing a meeting held at SBP (BSC) Sukkur, said that with active support of the business community and the banking sector, the SME finance policy recently launched by the PM will achieve its desired objectives. Highlighting the consultative process adopted while formulating SME finance policy, the governor said that effective communication of this policy at grassroots level will require number of awareness sessions at different locations in Pakistan. SBP will conduct outreach programs to create awareness in collaboration with chambers regarding SME finance policy. Daily Times. Ministry shows willingness to revive ATTLO Commerce Ministry has reportedly expressed willingness to revive its Afghan Transit Trade Liaison Office (ATTLO) at Chaman border to co-ordinate with all the relevant agencies. The Ministry has also shown willingness for removal of Regulatory Duty (RD) on at least four Afghanistan-specific products if Kabul reciprocates in reduction of duty on Pakistani products and removal of unauthorized charges on Pakistani trucks. BR. \ Economic Indicators Cement dispatches rise 12% despite poor exports Total cement dispatches in the 1HFY18 recorded an increase of 12% on the back of robust local demand as dispatches were recorded at 22.24Mn tons with 95% capacity utilization rate. Domestic consumption stood at 19.83Mn tons (YoY 17.41% increase) whereas total 2.41Mn tons (YoY 17.34% decrease) were exported. Exports of the industry continue to fall due to high cost of doing business. Dawn. Centre spars with Sindh as sugar crisis escalates Minister for National Food Security and Research SIkandar Hayat Khan Bosan has denied all allegations of Sindh Government for spurring recent sugar crisis. He said that providing subsidies to the sugarcane farmers is the subject matter of the provincial government along with the fixation of the support price (i.e. PKR 182/ per 40 kg) of sugarcane. Currently, federal government has allowed 1.5Mn tons of sugar in FY18 with PKR 10.7/ per kg subsidy on the back of 2Mn tons inventory. Dawn. List of Indicators USD-Interbank USD-Open MKT KSE-100 index FIPI Forex Reserves Major Currencies 155 GBP, 4-Jan-18, 149.7 145 135 EUR, 4-Jan-18, 133.2 125 115 105 USD, 4-Jan-18, 110.6 95 Jan-17 USD Apr-17 GBP Foreign reserves decline to $ 20Bn The total liquid foreign reserves held by the country stood at $ 20.15Mn on Dec. 29, 2017. The reserves held by the SBP stood at $ 14.11Bn. The net foreign reserves held by commercial banks are $6.05Bn. During the week ending Dec. 29, 2017, SBP’s reserves decreased by $ 26Mn to $ 14.11Bn due to payments on account of external debt servicing. BR. Jul-17 Oct-17 Source: KCCI Research ; Oanda.com Quote of the Day "Gratitude unlocks the fullness of life. It turns what we have into enough." Melodie Beatty Chart of the Day PAKISTAN'S AVERAGE YEARLY INFLATIO N (5MFY14- 5MFY18) 8.89 6.1 Daehan Dewan awarded brownfield status The Ministry of Industries and Production has awarded Daehan Dewan Motor Company/Dewan Farooque Motor Ltd (DFML) with brownfield status under the Auto Development Policy 2016-21. The company has already signed a joint venture agreement with the Kolao Group of Korea for a total joint investment of PKR 700Mn. Under this agreement, DFML will produce light commercial and sports utility vehicles. Production of new vehicles is expected to start in Feb’18. Dawn. Major oil, gas discovery in KP Khyber Pakhtunkhwa Oil and Gas Company (KPOGCL) has announced a major oil discovery in Baratai Block of Kohat. The company said that the new well will produce 700 barrels of crude oil along with 30 mmcfd of gas. This discovery will contribute PKR 1Bn in the KPK government revenues annually. Dawn. EUR 3.88 3.75 2.08 1HFY14 1HFY15 1HFY16 1HFY17 1HFY18 Source: KCCI 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