Pakistan Daily Economy Update - 5 October

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1. October 05 , 2022 KCCI - eBulletin Polyester filament yarn: DGCV revises customs values Directorate General Customs Valuation (DGCV) has revised the customs values of Polyester Filament Yarn under sub-section (8) and section 25 (9) of section 25 of the Customs Act, 1969, which were earlier determined under section 25A of the Customs Act, 1969 vide Valuation Ruling No.1655 in May’22. BR. Tax on immovable properties: FBR prescribes relevant form for taxpayers FBR has issued SRO.1829(I)/2021 to issue a new form through proposed amendments to Income Tax Rules 2002. According to draft form, FBR has asked taxpayers to specify total value of capital assets taxable under section 7E; deemed income under section 7E and tax on deemed income under section 7E. The form has also prescribed separate columns for the cost/declared value and fair market value of the immovable property. This notification would be applicable for TY22, FBR stated. BR. World Bank extends CASA-1000 closing date World Bank has extended closing date of $ 0.6Mn Grant Agreement of Central Asia-South Asia, Electricity Transmission and Trade Project (CASA1000) retroactively, from 31st Mar’22 to 31st Dec’24. Grant Agreement was signed between Pakistan (recipient) and the International Bank for Reconstruction and Development and International Development Association (together with WB), acting as administrator of the CASA-1000 Multi Donor Trust on 12th Sept’17. BR. Exports contract in Sept on rising input costs According to provisional data by PBS, Pakistan’s merchandise exports shrank slightly in Sept’22 and fell 0.91% to $ 2.38Bn from $ 2.40Bn in Sept’21. MoM decline was noted at 3.8%. In 3MFY23, the total export proceeds stood at $ 7.12Bn against $ 6.99Bn in 3MFY22, indicating a growth of 1.84%. Pakistan’s exports increased 26.6% to $ 31.845Bn in FY22, up from $ 25.160Bn in FY21. Contrary to this, the import bill fell by 19.72% to $ 5.26Bn in Sept’22 from $ 6.56Bn in Sept’21. On MoM basis, import bill declined by 13.21%. The import bill in 3MFY23 stood at $ 16.33Bn against $ 18.71Bn last year, indicating a decline of 21.42%. The import bill increased 43.45% to $ 80.51Bn during FY22, up from $ 56.12Bn in FY21. As a result, the trade deficit in Sept’22 fell by 30.62% to $ 2.88Bn from $ 4.15Bn in Sept’21. In 1QFY23, trade deficit dipped 21.42% to $ 9.20Bn from $ 11.71Bn in 1QFY22. Dawn. Floods destroy 70% kharif crops, inflict PKR 350Bn loss: SAB Sindh Abadgar Board (SAB) has sought 50% fertilizer subsidy for upcoming rabi and kharif crops, claiming that recent monsoon rains and flash floods had destroyed almost 70% of kharif crops in Sindh which was ready to be harvested and inflicted estimated loss of PKR 350Bn to farmers, livestock farm owners. Dawn. Oil demand sinks by 22% to 1.5Mn tons Demand for petroleum products declined by a notable 22% to 1.52Mn tons in Sept’22, compared to Sept’21, as record-high prices and the cataclysmic floods restricted economic activities from resuming. Tribune. KE seeks exemption from ECLs for 2 years KE has sought exemption from Expected Credit Losses (ECLs) from SECP, on financial assets for two years effective from 1st Jul’22, as the balance payable to Govt. of Pakistan and provincial govts and their departments/entities under circular debt accumulated to PKR. 341Bn. BR. EU scales up assistance to PKR 6.7Bn for flood-hit people EU has announced to substantially scale up its financial assistance to PKR 6.7Bn (€30Mn) to the flood-affected people in Pakistan. BR. Russia, CARs, Belarus and Iran: PM forms three ‘thematic working groups’ PM Shehbaz Sharif, has constituted three Thematic Working Groups to finalize strategy for close engagement with Russia, Central Asian Republics (CARs), Belarus and Iran in various sectors pertaining to economic cooperation, connectivity, energy cooperation, trade and investment etc. The Thematic Working Groups comprise of secretaries of concerned Ministries/Divisions, MO Directorate, ISI, Governor SBP, Chairman WAPDA, Inter State Gas System (ISGS) and Information & Broadcasting. BR. Global community told: Pakistan is out of money to spend on flood recovery UN and the govt. of Pakistan have launched the revised flash appeal of an urgent US$ 816Mn to swiftly respond to the needs of people affected by unprecedented climate-induced floods in the country. The revised “2022 Pakistan Floods Response Plan” (FRP) was shared with UN member states and humanitarian organizations on 4th Oct’22 in Geneva. The revised appeal urgently seeks US $ 816Mn to respond to the growing lifesaving needs of the people – a jump of US $ 656Mn from the initial appeal of US $160Mn. BR. \ List of Indicators Date / Period Unit Value Change Daily USD-Interbank USD-Open MKT 4-Oct 4-Oct PKR PKR 225.64 227.75 -0.73% -0.76% KSE-100 index FIPI 4-Oct 4-Oct Pts. $ Mn 41,350 0.82 0.34% NM** Crude Oil 4-Oct $/bbl 86.52 3.77% Gold 4-Oct $/oz 1,730.5 1.19% Gold (10g) Local 4-Oct PKR 127,920 2.97% Silver 4-Oct $/oz 21.10 1.17% Cotton(KHI)-40 kg 4-Oct PKR 20,362 0.00% Kibor-6M 4-Oct % 15.89 15.89% 23-Sep $ Bn 13.76 WoW -2.19% Jul-Aug 22 $ Bn 5.25 -2.18% Exports* Jul-22 $ Bn 2.22 -4.76% Imports* Jul-22 $ Bn 4.86 -10.48% Jul-22 $ Bn -2.64 14.77% Jul-Aug 22 Jul-Aug 22 $ Bn $ Bn -1.92 0.17 16.24% -16.54% Forex Reserves YoY Remittances Trade Balance* Current Account Foreign Direct Inv. Jul 22 LSM Growth* % 11.70 % 24.93 Jul-22 Avg. CPI Discount Rate % 15.00 Jul-22 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful, WoW= week on week; YoY=Year on Year Major Currencies 305 295 285 275 265 255 245 235 225 215 205 195 185 175 165 155 145 Oct-21 GBP, 4-Oct-… EUR, 4-Oct-22, 224.3 USD, 4-Oct-22,… USD Jan-22 GBP Apr-22 EUR Google accelerator for startups Google is launching Google for Startups Accelerator: circular economy for startups and non-profit organizations in Pakistan, Asia-Pacific and North America. The program will select organizations that use technology to solve circularity challenges, including reuse, refill, recycling, composting, fashion, food, safe and circular materials, and the built environment. Dawn. “Opportunity is missed by most people because it is dressed in overalls and looks like work.” Thomas Edison Grosss External Debt Position by Sector (As of 30th Jun'22) ($ Bn) Monetary Authorities Banks Stakeholders say solar panel policy is ‘bound to fail’ Stakeholders from the private sector have expressed concerns over the govt.’s new policy on solar panels and said it was bound to fail. Speaking at the closing session of the workshop on the policy, entrepreneurs and industrialists said the govt.’s policies were promoting the import of solar panels as opposed to local manufacturing, as the govt. has allowed duty free import of solar panels whereas 17% sales tax has been imposed on components and raw material. Dawn. UBL, NayaPay partner for fast remittances As the demand for fast, secure and simple digital payments across borders continues to grow, UBL and NayaPay have collaborated to enable users in Pakistan to receive international remittances from over 100 money transfer agents directly in their NayaPay accounts. NayaPay, a leading EMoney Institution in Pakistan, enables users to open e-money accounts on their smartphones in a few simple steps and take control of their finances. UBL will further expand its reach by facilitating real-time cross-border transactions into NayaPay accountholders. Tribune. NTDC handed PKR 10Mn fine Nepra has imposed a fine of PKR 10Mn on NTDC because of a partial blackout during Sept’21, when several parts of Karachi plunged into darkness after the entire KE system tripped following a lightning strike on the Jamshoro circuit. Tribune. PSX opens World Investor Week 2022 PSX, along with 78 other exchanges across the world, marked the 6th World Investor Week (WIW) 2022 under the umbrella of the International Organization of Securities Commissions (IOSCO). It is holding the event for the 2nd consecutive year, according to press statement issued by PSX. Tribune. Speculation and volatility of exchange rates: Action to be taken against erring banks, ECs: SBP chief Governor SBP has informed the NA Standing Committee on Finance that action would be taken against banks and forex companies (ECs) involved in volatility in the exchange rate upon finalization of inquiry. BR. Oct-22 Source: KCCI Research Quote of the Day Senate informed China’s investment in Pakistan has decreased by 29.27% in the last two years—mainly due to Covid-19 and conclusion of CPEC Phase-I, the federal govt. informed the Senate. BR. No plans to privatize water board, says new CEO Following the recent appointment of the MD/CEO and CEO in the KWSB, reports have been doing the rounds that the city’s lone water utility would be privatized following the revamp of its system under the WB’s financial assistance program. However, the CEO said that Sindh govt. has no plan or intention to privatize KWSB. Dawn. Jul-22 TOTAL $ 130.192 Bn General Government 66% (86.13) Other Sectors DI: Intercompany Lending 3% (4.43) Source: KCCI Research, SBP Note If any member is facing any issues pertaining to PakistanAfghanistan investment and trade policies or has project proposals is requested to share the information at secretary@kcci.com.pk for forwarding to the Board of Investment.