Tag Archives: Deficit

Tax imposition imperative to reduce budget deficit

Tax imposition imperative to reduce budget deficit

KARACHI – The time has come for the government to display resolve rather than mumble on new taxation measures in order to reduce the probability of a greater budget deficit, triggered by a lower resource basket.
Income tax surcharge of 15 percent on salaried income, GST imposition on fertiliser, withdrawal of GST exemption on plant, machinery and enhancement of SED to 2.5 percent from one percent are likely to enhance taxation revenue by Rs 53 billion, while ambitious cost

Pakistan, IMF agree on budget deficit of 5.3% for FY 10/11

KARACHI – The government and the International Monetary Fund have agreed on a budget deficit of 5.3 percent of the gross domestic product (GDP) in the fiscal year 2010/11 (July-June), and are forecasting a growth of around 2.75 percent, sources said on Monday. This is more than a revised budget deficit of 4.7 percent of GDP made following the devastating 2010 floods that caused around $10 billion in damages. “We agreed to a target budget deficit at 5.3 percent of GDP, GDP growth

IMF stresses tax reforms, cut in subsidies, budget deficit

ISLAMABAD – The International Monetary Fund (IMF) on Friday presented a bleak picture of the economic situation in Pakistan and recommended a complete overhaul of the economy to put the country back on the path of recovery without disengaging itself to facilitate reforms.
Upon conclusion of its extended talks with Pakistan’s economic managers, the IMF issued a statement of its assessment, cautiously appreciating the proposed plan of the government but at the same time candidly

Pak-China negotiations to focus on trade deficit reduction

ISLAMABAD – Pakistan and China, on Thursday, started negotiations on the second phase of the Free Trade Agreement (FTA), with the aim of reducing Pakistan’s trade deficit in bilateral trade and tariff concessions. The first phase of the FTA would conclude on December 31, 2012 and respective organisations of the two governments have started talks to finalise modalities for the second phase – to be implemented from January 2013. The current discussion would focus on devising a

Punjab facing record budget deficit of Rs 136b: Kaira

LAHORE – The Punjab government is facing a deficit of Rs 136 billion owing to gross financial indiscipline in the province. “Of the outstanding amount, Rs 51 billion have been converted into a loan, while another Rs 37 billion have been obtained from the State Bank of Pakistan to run the government’s affairs,” PPP’s former Punjab finance minister Tanvir Ashraf Kaira said on Thursday while exposing the ill practices of the Punjab government during the last three years.
Talking to

Pakistan aims to keep deficit at 5pc of GDP, says Shaikh

KARACHI – Pakistan will aim to keep its budget deficit at five percent of gross domestic product (GDP) in the fiscal year 2010-11, Federal Finance Minister Hafiz Shaikh said on Saturday. “For this (fiscal) year, we will try to not let the fiscal deficit go beyond five percent,” Shaikh said after launching a margin trading system at the country’s main stock exchange. The 2010-11 fiscal year runs from July to June.
“This might not be possible but we will try our best.” The budget

Trust deficit major hurdle in formation of anti-govt alliance

ISLAMABAD – Lack of trust in one another remained a major hurdle, as the opposition parties, which gathered at a dinner hosted by JUI-F chief Fazlur Rehman on Friday night, failed to chalk out a clear strategy against the PPP-led government despite agreeing that it had not been able to resolve any of the several crises faced by the country. The MQM’s presence in the brain-storming session was considered a significant development, but other parties suspected the sincerity of the PPP’s

Government maintains budget deficit at 2.9 percent

ISLAMABAD – The government has managed to curtail the budget deficit at 2.9 percent of the Gross Domestic Product (GDP) or Rs 490.3 billion during the first six months of the current fiscal year.
According to fiscal operations data for the first half, July-December, of the current financial year (FY 2010-11) released by the Ministry of Finance on Monday, total expenditure rose 8.6 percent of GDP or Rs 1480 billion compared to a total revenue growth of 5.8 percent of GDP or Rs

Bangladesh trade deficit widens sharply

DHAKA – Bangladesh’s overall trade deficit in the first half of the current fiscal year (July 2010- June 2011) widened to over $3.447 billion, official statistics showed on Tuesday.
Statistics of the Bangladesh Bank (BB) showed that the country exported $10.294 billion of goods while it imported items worth $13.741 billion in the July-December period. The overall trade deficit in the same period of the previous fiscal year (July 2009-June 2010) was nearly $2.753 billion when

Exports, remittances help current account deficit dwindle 97.34pc

KARACHI – Pakistan’s current account deficit has dwindled 97.34 percent to $81 million in the first seven months of the current fiscal year. This decline, analysts cited, is spurred by healthy dollar inflows from exports and worker remittances.
However, analysts believe that an expected rise in prices of oil on the back of political unrest in Middle Eastern countries might take Pakistan’s current account deficit to $4.0 billion during 2010-11.
“The overall deficit may swell

Government to borrow from market to bridge fiscal deficit

ISLAMABAD – The government has reached an understanding with the State Bank of Pakistan (SBP) that it would borrow from the market to bridge fiscal deficit if the projected external inflows did not materialise during the current fiscal year. An official source said that decision was finalised after the central bank expressed concerns over the government borrowing if projected external inflows did not materialise during the current fiscal years.
Worries were related to the

Government looking at ‘other options’ to bridge fiscal deficit

ISLAMABAD – Following a refusal by the International Monetary Fund (IMF) to revive the suspended $11.3 billion standby arrangement until economic reforms are implemented, the government has started looking at other options to meet its rising fiscal deficit.
An official source said that at present, the government was in a stable position, as exports were expected to increase to $22 billion and remittances of $10 billion were estimated during the current financial year. “With these

Domestic borrowing 79.4pc of deficit

KARACHI – The State Bank of Pakistan (SBP) has said that the domestic borrowings financed 79.4 percent of the budgetary deficit that amounted to Rs 276 billion in the first quarter of FY11. Given the lack of adequate external assistance, domestic sources contributed a hefty 79.4 percent share in deficit financing during the July-September period of FY11.
Specifically, a little less than half of total financing requirements were met through deficit monetisation during the first

Fiscal deficit mounts to Rs 491b, NA told

ISLAMABAD – The National Assembly was told on Friday that the overall fiscal deficit of the country during the first half of the current fiscal year (July -December 2010) has mounted to Rs 491 billion. In a written reply, the Finance Ministry also informed the house that the government from March 2008 to December 2010 had borrowed Rs 1.1 trillion from the State Bank and other scheduled banks.
“The interest paid by government on loans (borrowing from banks) during the year 2010-11

Deficit to touch 8% if reforms delayed: Shaikh

ISLAMABAD – Stressing the need for economic reforms, Finance Minister Dr Abdul Hafeez Shaikh on Tuesday said that if appropriate reform measures are not taken in time to contain the fiscal deficit then it might go up to 8 percent of the GDP during the current fiscal year.
However, he said, the government will not allow it to happen and will take appropriate measures. “Some of the measures taken by the government have reduced the fiscal deficit below 3 percent of GDP for the first

Centre blames provinces for fiscal deficit

KARACHI – The federal government, which is again haunted by soaring international oil prices that would increase the country’s woes on the inflation and balance-of-payment fronts, has held the provinces responsible for the widening fiscal deficit.
The country is also faced with a longstanding challenge of circular debts which, the economic managers said, have again ballooned to Rs 300 billion due to power tariff differentials. The federal government in a bid to protect the

CA deficit may exceed $7b in FY11

KARACHI – The current account (CA) deficit of the country is likely to widen to beyond $7.0 billion in 2010-11 because of nonpayment of two tranches on the part of the IMF, rising world oil prices and a hike in the yield of Eurobonds.
The IMF has withheld $3.40 billion, to have been paid in two tranches, to Pakistan with the government postponing the enforcement of the reformed GST along with a reversal of an original decision to ramp up the prices of POL products because of