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Sunday, April 08, 2012

Budget deficit may shoot up to 5pc of GDP

By Sajid Chaudhry

ISLAMABAD: Key foreign inflows such as Coalition Support Fund, proceeds of auction of 3G licences to telecommunication companies and arrears of PTCL privatisation are not likely to fully materialise by June 30, official sources said on Saturday, adding that the fiscal deficit was expected to shoot up to five percent of the GDP.
However, project assistance and grants from donors would increase from expected $3.2 billion to $3.5 billion by June 30, the Economic Advisory Council (EAC) was told at its meeting on budget preparations
Federal Finance Minister Hafeez Shaikh told the meeting that the government had budgeted foreign inflows of $900 million CSF arrears, $800 million PTCL privatisation proceeds and $800 million from auctions of 3G licences. However, the minister added, these inflows were not likely to materialise as expected by June 30. The government had earlier projected containing the fiscal deficit to four percent of the GDP. The projection was later revised to 4.7 percent of the GDP and now it is expected that the deficit might climb to five percent of the GDP by end of the ongoing fiscal year, the sources said.
The EAC was told that out of expected foreign inflows of $3.5 billion, $1.4 billion had been materialised received by end of March. According to details of the project assistance and grants, China has provided Pakistan $370 million and it is expected to disburse $277 million by June 30, making a total of $646 million. The Chinese assistance is being used for the Chasma Nuclear Power Plant, satellite programme and to upgrade Karakoram Highway. The World Bank had committed a $700 million project assistance and Pakistan has so far received $378 million. The remaining sum is expected to be materialised before June 30. The Asian Development Bank (ADB) had committed $566 million to Pakistan during the ongoing fiscal year 2011-12.

Courtesy www.dailytimes.com.pk

 

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