Current account deficit increases by 100pc
- Thread starter Ryuzaki
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I think it clearly shows that the government is serious about putting on additional burden on the comman man and ruin export competitiveness which is a result of the governments gross ineptitude. No structural reforms are initiated to curb transmission and distribution losses. New projects are setup on the basis on High ROE, which results in high tariff.
VCheng
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The additional burden on the common man is not important compared to getting the best possible loan terms for the coming financial crunch. This is just another step in the tango leading up to the finale.
And the crunch is coming fast.
Pakistan reserves decrease $137 mln to $13,541 mln week ending Nov 17.
And the crunch is coming fast. The forex reserves are in a terminal decline even after taking more than a billion dollars in short term borrowing during the first quarter this fiscal. Obviously the burden is for the comman man to bear by way way increased direct tax/indirect taxes and increase in cost of daily necessities including food,water and electricity.
VCheng
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I am sure that another package will be cobbled together in time to avert a crisis. The burden of the common man will get just a little heavier that's all, but the average Pakistani Joe - er, I mean the average Pakistan Chaudhary Sahib - is known the world over for great forbearance.
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Tim Archer
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@UnitedPak The only thing you proved by giving me negative point was that you are a muslim. Probably a sunni. That's it.
I will stick with my comment. I am yet to see a pakistani talk numbers when it comes to macro economics.
@Chak Bamu might be an exception but he is not a resident pakistani my bet !
They do not know what to ask ! Sad state of the country !
That incompetent fool should be gunned down for systematically making sure one after another ( PIA / Steel Mills / Textile ) has gone to gutters !
He aint my finance minister but still my blood boils looking at such an idiot at the helm and that too purely from a academic perspective.
I will stick with my comment. I am yet to see a pakistani talk numbers when it comes to macro economics.
@Chak Bamu might be an exception but he is not a resident pakistani my bet !
They do not know what to ask ! Sad state of the country !
That incompetent fool should be gunned down for systematically making sure one after another ( PIA / Steel Mills / Textile ) has gone to gutters !
He aint my finance minister but still my blood boils looking at such an idiot at the helm and that too purely from a academic perspective.
UnitedPak
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Yet another brilliant post by Tim "the Economist" Archer, that just insults a large group without remotely adding anything in value. Didn't see any numbers in your post either. Pathetic.
The road show for selling Sukuk/euro bonds are taking place now. The bonds were to be floated on 29/11/2017. With all the political turmoil, what will be their fate? They wont get the best rate now. Not with the headline BBC is carrying on Pakistan.Also, what happens on PSX on monday? Anyone predicting capital flight and the rupee plunging on Monday when the markets reopen? As a Pakistani business man or even a comman citizen I would want to convert my savings to dollars. Not only does it ensure safety but also ensures a nice lil profit. Maybe they will keep the market and money exchangers shut!
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In a largest-ever transaction, Pakistan on Wednesday raised $2.5 billion from global capital markets by issuing the five-year Sukuk (Islamic bond) and the 10-year Eurobond at relatively lower rates, suggesting that foreign investors are still confident about the country’s $300 billion economy.
The deal was signed off at rates which were even lower than indicative rates Pakistan offered to global investors. Pakistan offered the 10-year Eurobond bond in the low 7% range and the 5-year Sukuk at an initial price tag of 6%.
The government raised $1 billion through the 5-year Sukuk at the rate of 5.625%, which near lowest-ever rate of 5.5% that Pakistan paid in September last year.
The rest of $1.5 billion were generated through the 10-year Eurobond at a fixed rate of 6.875%, which is 455 basis points above the corresponding 10-year US Treasury benchmark rate, matching the lowest-ever rate of 6.875% that Pakistan paid in 2007 on its 10-year Eurobond.
Seems like a good deal which Pakistan got despite the recent political turmoil. Although the Govt has now taken atleast 3.5 billion dollars in the first 4 months of the current fiscal.
The deal was signed off at rates which were even lower than indicative rates Pakistan offered to global investors. Pakistan offered the 10-year Eurobond bond in the low 7% range and the 5-year Sukuk at an initial price tag of 6%.
The government raised $1 billion through the 5-year Sukuk at the rate of 5.625%, which near lowest-ever rate of 5.5% that Pakistan paid in September last year.
The rest of $1.5 billion were generated through the 10-year Eurobond at a fixed rate of 6.875%, which is 455 basis points above the corresponding 10-year US Treasury benchmark rate, matching the lowest-ever rate of 6.875% that Pakistan paid in 2007 on its 10-year Eurobond.
Seems like a good deal which Pakistan got despite the recent political turmoil. Although the Govt has now taken atleast 3.5 billion dollars in the first 4 months of the current fiscal.
Defence, interest payments consume over three-fourths of tax revenue
ISLAMABAD: Defence spending and interest payments on domestic and foreign loans ate up Rs627.5 billion or more than three-fourths of the federal government’s tax revenues in the first quarter of this fiscal year, leaving very little fiscal space for any other functions of the state.
However, the more worrying bit was that barring Federal Board of Revenue’s (FBR) tax revenue, the other two sources witnessed negative growth in collection during July-September.
Debt servicing alone consumed Rs445.4 billion, which was 54% of the Rs824.5 billion revenues of the federal government during July-September period, according to the fiscal operations summary the finance ministry released on Wednesday.
A significant chunk of the federal development spending has gone to parliamentarian schemes.
Resultantly, the federal government’s budget deficit widened to Rs488.4 billion or 1.4% of the GDP in the first quarter. Due to Rs51.5 billion cash surpluses generated by the four provinces, the overall budget deficit stood at Rs440.8 billion or 1.2% of the GDP in the first quarter, according to the fiscal operations summary.
The government’s total tax revenues stood at Rs824.5 billion in the first quarter – up by Rs138 billion or 20.1% over the same period of the previous fiscal year. The entire increase came on account of FBR’s tax collection that surged to Rs764.8 billion in the first quarter.
Collection of other taxes stood at Rs60 billion in the first quarter – down by 2.5% over the same period of the previous fiscal year. Collection was about one-fifth of the annual budgetary estimates.
Non-tax revenue collection stood at only Rs90 billion in the first quarter – down by almost one-tenth. It was only 9% of the annual budgetary estimates of Rs980 billion, suggesting that the government will not be able to achieve this target, primarily because of non-disbursements of the Coalition Support Fund by the United States.
The trend suggests that the annual budget deficit target of 4.1% of the GDP or Rs1.480 trillion has already become unrealistic in the first quarter.
The total federal government’s expenditures during the first quarter stood at Rs974.1 billion – up by Rs125 billion or 14.7%.
The pace of increase in spending was far higher than what the finance ministry had assumed while making the fiscal year 2017-18 budget. The total outlay of this fiscal year budget is only 4.3% higher than the previous year’s budget.
The current expenditures were 11.3% higher than the previous fiscal year, standing at Rs851.8 billion in the first quarter of this fiscal year.
ISLAMABAD: Defence spending and interest payments on domestic and foreign loans ate up Rs627.5 billion or more than three-fourths of the federal government’s tax revenues in the first quarter of this fiscal year, leaving very little fiscal space for any other functions of the state.
However, the more worrying bit was that barring Federal Board of Revenue’s (FBR) tax revenue, the other two sources witnessed negative growth in collection during July-September.
Debt servicing alone consumed Rs445.4 billion, which was 54% of the Rs824.5 billion revenues of the federal government during July-September period, according to the fiscal operations summary the finance ministry released on Wednesday.
A significant chunk of the federal development spending has gone to parliamentarian schemes.
Resultantly, the federal government’s budget deficit widened to Rs488.4 billion or 1.4% of the GDP in the first quarter. Due to Rs51.5 billion cash surpluses generated by the four provinces, the overall budget deficit stood at Rs440.8 billion or 1.2% of the GDP in the first quarter, according to the fiscal operations summary.
The government’s total tax revenues stood at Rs824.5 billion in the first quarter – up by Rs138 billion or 20.1% over the same period of the previous fiscal year. The entire increase came on account of FBR’s tax collection that surged to Rs764.8 billion in the first quarter.
Collection of other taxes stood at Rs60 billion in the first quarter – down by 2.5% over the same period of the previous fiscal year. Collection was about one-fifth of the annual budgetary estimates.
Non-tax revenue collection stood at only Rs90 billion in the first quarter – down by almost one-tenth. It was only 9% of the annual budgetary estimates of Rs980 billion, suggesting that the government will not be able to achieve this target, primarily because of non-disbursements of the Coalition Support Fund by the United States.
The trend suggests that the annual budget deficit target of 4.1% of the GDP or Rs1.480 trillion has already become unrealistic in the first quarter.
The total federal government’s expenditures during the first quarter stood at Rs974.1 billion – up by Rs125 billion or 14.7%.
The pace of increase in spending was far higher than what the finance ministry had assumed while making the fiscal year 2017-18 budget. The total outlay of this fiscal year budget is only 4.3% higher than the previous year’s budget.
The current expenditures were 11.3% higher than the previous fiscal year, standing at Rs851.8 billion in the first quarter of this fiscal year.
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