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Fiscal Policy


Hafeez takes Pakistan on IMF track Following the parliament’s failure to take the much-needed steps, the President has ordered measures to be taken to curtail the mounting fiscal deficit within 5.3 percent of GDP. This can be analogous to the bridge finance facility for fiscal support, availed from the IMF in lieu of the delay in FoDP disbursements. However, its fate beyond a quarter depends upon parliament’s support in the coming budget. Nonetheless, this is a step in the right direction, which comes after a series of long deliberations between the country’s economic managers and the Fund earlier this month. Political leadership of the ruling party has finally been convinced by the finance minister as regards the horrendous consequences of not fulfilling the IMF conditions. Mind you, the conditions of the Fund, old and new, essentially come from domestic policy experts who recommend different measures to the Fund’s officials, and the latter, in turn, make those recommendations as conditions ...

Farming tax It’s nice to see somebody from the government finally speaking up on the failure in taxing farm income so far. Media reports suggest that the federal government, led by finance minister Hafeez Shaikh, has been urging the provinces to tax agricultural income, real estate, and wealth, in order to ensure their respective fiscal balance. The move comes months after the RGST has met a stalemate, amid rising concerns over Pakistan’s failure to tax its elite, a bulk ...
Following lacklustre performance in the first half, the National Savings Schemes pulled up its socks in January. The state-run savings institution raised Rs37 billion (on net basis) in January, compared to an average of Rs14 billion per month in the preceding six months. At a time when the government’s increasing fiscal deficit is forcing it to rely on domestic banking sources, handsome mobilisation from non-banking sources is a pleasant surprise. With Rs119 billion raised in the ...
A one-off high receipt from the Coalition Support Fund ($760 mn), earlier transfers of SBP profits, and possibly some accounting gimmicks to show subsidies of power and other sectors in contingent liabilities, made it possible for fiscal managers to post a budget deficit at 1.3 percent of GDP for the second quarter. Traditionally, fiscal deficit for the first half of a fiscal year turns out to be 40 percent of the full-year deficit. By taking this ...
The finmin’s daydreams The ministry of finance seems to be playing a merry go-round with the IMF, as another round of negotiation resulted in zero concrete conclusions. Till a few weeks back, there were voices within the MoF that fiscal deficit would be as high as 8-8.5 percent. But that could have well been a tactical move by the politically motivated finance minister to pressurise high ups in the party as well as leadership in the opposition and coalition ...
For a country that is suffering from the ‘acute fiscal deficiency syndrome’, playing dilly-dally with a sector that has contributed over 12 percent to total tax revenues for the first seven months of FY11 doesn’t make a lot of sense. This woebegone sector – Customs – has battled with the issue of an automated clearing system, Pakistan Automated Customs Clearing System (PACCS) to be precise, for over a year now. Agility – the company providing the service ...


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Foreign Debt $62.649bn
Per Cap Income $1,512
GDP Growth 4.24%
Average CPI 8.6%
Trade Balance $-2.197 bln
Exports $1.729 bln
Imports $3.926 bln
WeeklyNovember 23, 2015
Reserves $19.713 bln