Hi, just please read the first couple of paragraphs, that is all you need. Is there any fiscal responsibility or accountablity in this nation?
Govt borrows Rs247bn from banks in Q1 | Business | DAWN.COM
Govt borrows Rs247bn from banks in Q1By Shahid Iqbal | From the Newspaper
(9 hours ago) Today
Analysts said if the economy does not perform with a reasonable growth of 5 to 6 per cent, the fiscal deficit could be again 6 per cent of GDP, which means a deficit of about Rs1.2 trillion.
KARACHI: The first quarter of the current fiscal ended with rampant government borrowing from the banking system, which was totally unmatched with the borrowing it made during the same quarter of the pervious year.
Last year, the government made record borrowing of Rs598 billion but in the first quarter it had borrowed only Rs7 billion.However, the State Bank reported on Tuesday that the government borrowing rose to Rs247 billion in the first quarter of this fiscal reflecting the increasing dependence of the government on banking system.
The latest figures revealed recently that fiscal deficit was over 6 per cent in 2011, while the current fiscal might face even higher deficit due to the shrinking external resources and repayment of the IMF loan from the beginning of next calendar year.
The poor economic growth did not allow improvement in the revenue generation last year and the tax-to-GDP ratio remained below 10 per cent, a sign of low revenue growth.
This heavy government borrowing has deteriorated the entire banking functions and alienated the private sector from these basic financial institutions.
“The advances of schedule banks have increased merely by 6 per cent in FY11 and 4.5 per cent in FY10 compared to the main inflation CPI of 13.66 per cent and 10.10 per cent, respectively.
This is alarming as lower investments points towards lower prospect of growth in the years to follow,” said a research report of JS Research.
The State Bank report shows that monetary growth during the first quarter was less than the growth recorded during the same period of last year. The monetary growth (M2) at the end of the quarter was minus 0.72 per cent against a positive 0.15 per cent growth in the same period of last fiscal.
Higher monetary growth is a sign of better economic activities, but in case of Pakistan it is a negative sign since bulk of the money is used by the government and mostly for non-productive purposes.
Analysts said the banking system might see more pressure of the government borrowing in next quarter since the external inflows have almost been insignificant.
The government has projected just 1 per cent of the budget from external sources for the current fiscal that shows how much the government needs borrowing to meet its expenses.
Analysts said if the economy does not perform with a reasonable growth of 5 to 6 per cent, the fiscal deficit could be again 6 per cent of GDP, which means a deficit of about Rs1.2 trillion.
Govt borrows Rs247bn from banks in Q1 | Business | DAWN.COM
Govt borrows Rs247bn from banks in Q1By Shahid Iqbal | From the Newspaper
(9 hours ago) Today
Analysts said if the economy does not perform with a reasonable growth of 5 to 6 per cent, the fiscal deficit could be again 6 per cent of GDP, which means a deficit of about Rs1.2 trillion.
KARACHI: The first quarter of the current fiscal ended with rampant government borrowing from the banking system, which was totally unmatched with the borrowing it made during the same quarter of the pervious year.
Last year, the government made record borrowing of Rs598 billion but in the first quarter it had borrowed only Rs7 billion.However, the State Bank reported on Tuesday that the government borrowing rose to Rs247 billion in the first quarter of this fiscal reflecting the increasing dependence of the government on banking system.
The latest figures revealed recently that fiscal deficit was over 6 per cent in 2011, while the current fiscal might face even higher deficit due to the shrinking external resources and repayment of the IMF loan from the beginning of next calendar year.
The poor economic growth did not allow improvement in the revenue generation last year and the tax-to-GDP ratio remained below 10 per cent, a sign of low revenue growth.
This heavy government borrowing has deteriorated the entire banking functions and alienated the private sector from these basic financial institutions.
“The advances of schedule banks have increased merely by 6 per cent in FY11 and 4.5 per cent in FY10 compared to the main inflation CPI of 13.66 per cent and 10.10 per cent, respectively.
This is alarming as lower investments points towards lower prospect of growth in the years to follow,” said a research report of JS Research.
The State Bank report shows that monetary growth during the first quarter was less than the growth recorded during the same period of last year. The monetary growth (M2) at the end of the quarter was minus 0.72 per cent against a positive 0.15 per cent growth in the same period of last fiscal.
Higher monetary growth is a sign of better economic activities, but in case of Pakistan it is a negative sign since bulk of the money is used by the government and mostly for non-productive purposes.
Analysts said the banking system might see more pressure of the government borrowing in next quarter since the external inflows have almost been insignificant.
The government has projected just 1 per cent of the budget from external sources for the current fiscal that shows how much the government needs borrowing to meet its expenses.
Analysts said if the economy does not perform with a reasonable growth of 5 to 6 per cent, the fiscal deficit could be again 6 per cent of GDP, which means a deficit of about Rs1.2 trillion.
