ISLAMABAD: The State Bank of Pakistan (SBP) has reportedly said that achieving the budgeted 4.7 percent fiscal deficit target in the prevailing situation is a Herculean task and deficit is unlikely to be contained below 6 percent for the current fiscal year, it is learnt.
Sources in the Finance Ministry quoted a senior official of the SBP as stating that achieving 4.7 percent fiscal deficit is simply impossible because there are bleak chances for disbursement of foreign inflows on various accounts. Officials of Finance Ministry and SBP began a mid-year review of budgetary projections on Friday.
The officials of SBP have reportedly expressed skepticism on the estimated foreign inflows particularly $500 million on account of euro bonds, $850 million from Etisalat as part of the deal for PTCL privatisation and $800 million from the auction of 3G license. This is the premise on which the SBP officials based their assessment of the fiscal deficit by the end of the current year. International Monetary Fund staff concurs with these sentiments as stated by Advisor to Finance Ministry Rana Asad Amin during a meeting of the Senate standing committee.
Another official revealed to this correspondent that the country has paid in interest and principle to the tune of $1 billion in October 2012 and some more payments are due by the end of December 2012 and January 2013, which would further reduce the foreign exchange reserves considerably.
According to sources remittances and reimbursement of Coalition Support Fund (CSF) have provided support to the external account. And yet advisor to Finance Ministry did not agree with the evaluation that there is a need for panic with respect to the external account in next few months. He said that overseas Pakistanis are going to lend a helping hand to the economy through remittances which are showing a robust growth and are projected to go over $14.8 billion in the current fiscal year. In reply to a question that the IMF has reportedly projected 6.1 percent fiscal deficit for the current fiscal year, the official remained tight-lipped.