News
Friday, April 23, 2010
Budget deficit to overshoot targetKARACHI: Pakistan’s budget deficit may reach 5.5 percent of gross domestic product this fiscal year, overshooting a 5.1 percent target agreed with the International Monetary Fund (IMF), officials said on Thursday. The IMF board is scheduled to meet on May 3 to discuss the approval of a fifth tranche of a $1.2 billion loan for Islamabad. “There is now fear that the budget deficit for the current fiscal year may go beyond 5.2 percent and may touch 5.5 percent,” said a senior official of the Planning Commission of Pakistan. Big security-related spending and a shortfall in aid promised by allies were the main reasons for the growing deficit, the official said. The government’s original budget deficit target for fiscal year 2009-10 was 4.9 percent of the Gross Domestic Product (GDP). Analysts and officials have also identified low revenue collection as another reason for the widening deficit. Exacerbating the problem, the government was still paying out subsidies in the power sector, said Asif Qureshi, director at Invisor Securities. The government had targeted an increase of 19.2 percent year-on-year in revenue collection for fiscal year 2009-10, but only managed 11 percent in the first eight months of the current fiscal year. reuters
Courtesy www.dailytimes.com.pk