Gautam
BANNED
- Joined
- Aug 19, 2011
- Messages
- 2,197
- Reaction score
- -21
- Country
- Location
By Razi Syed
KARACHI: Pakistan will not come out
from the current account deficit
without going to international donors,
experts said on Thursday.
The deficit during July-September
2011 grew to $1.209 billion from $
597 million in the same period last
year, they added.
The move by Pakistan government to
choose short-term gains over long-
term economic stability is risky.
The total liquid foreign reserves held
by the country stood at $16,678.9
million as of December 2, 2011.
Foreign reserves held by the State
Bank of Pakistan stood at $12.86
billion while net foreign reserves held
by banks (other than SBP) stood at $
3.81 billion with total liquid foreign
reserves to $16,67 billion.
The International Monetary Fund
(IMF) loan repayments are also due to
start from early next year but Federal
Finance Minister Hafeez Shaikh said
Pakistan would have no trouble
repaying a loan of the IMF.
The two teams met in Dubai for Article
IV consultations referring to annual
talks the fund holds with each member
government to assess the health of
the economy from Nov 9-16, 2011.
The outcome of the meeting remained
flat as the donors asked Pakistan to
meet the demands laid down for the
release of funds.
Pakistan had opted out of an extension
of a three-year IMF $11 billion
emergency loan programme. Pakistan
asked the extension of the $11 billion
loan programme and a new loan
programme.
Pakistani officials repeated their
request to the IMF officials to grant
Pakistan two years grace period to
pay back instalments of loans and
principle amount by 2012.
The IMF has been steadfast on its
stance and succeeded pressing
Pakistan to meet its conditions for
levying tax on the agriculture sector,
enhance energy price and ensure
implementation of general sales tax.
IMF had also indicated that the
conditions for release of last tranche of
$1.85 billion bailout package for
Pakistan would be tougher, agriculture
expert and Karachi Chamber of
Commerce and Industry member
Shakeel Ahmad said.
The IMF also put a proposal before the
Pakistan that surplus cash crops would
be kept under the IMF supervision, he
added.
This will be done in case Pakistan fails
to follow the dictation of IMF for
levying different type of taxes and
increasing cost of utilities, he added.
Pakistan will start paying $8 billion
loan by 2012 and the process will
continue till the next three years.
He said due to the continuous increase
in energy prices, IMF agreed for
releasing funds otherwise the donor
would stop releasing remaining loan
amount besides it was determined to
start audit of the loans accounts.
The rulers on the behest of the IMF
reviewed the domestic economy on
many occasions by levying taxes and
in case of failure the IMF would put
tougher conditions for the release of
loans, Ahmad maintained.
The IMF has also sought amendments
to the State Bank of Pakistans act in
order to provide the central bank with
operational independence.
The IMF wants Pakistan to raise tax
revenue from the present 10 percent
of gross domestic product (GDP) to 15
percent by 2013, which is peril for our
economy. The countrys foreign debt
now stands at more than Rs 6,500
billion and in only two years 2008-09
alone, swelled to Rs 9,600 billion.
The countrys debt was recorded at Rs
10.890 trillion by August 2011 from
Rs 5.799 trillion by March 2008,
showing a net increase of Rs 5.091
trillion or 87.79 percent since
formation of the current government.
As the government revenue is less
than its expenditure, therefore
borrowing of money from both sources
would be a continuous phenomenon
until revenue increases more than the
expenditure.
The government was forced to
intervene in the energy and
commodity markets to keep prices
from getting completely out of reach of
the public. This burden of subsidies
along with higher security-related
expenditures exerted continuing
pressure on the fiscal system and
adjustment path was affected.
---------- Post added at 11:35 AM ---------- Previous post was at 11:33 AM ----------
Daily Times - Leading News Resource of Pakistan
KARACHI: Pakistan will not come out
from the current account deficit
without going to international donors,
experts said on Thursday.
The deficit during July-September
2011 grew to $1.209 billion from $
597 million in the same period last
year, they added.
The move by Pakistan government to
choose short-term gains over long-
term economic stability is risky.
The total liquid foreign reserves held
by the country stood at $16,678.9
million as of December 2, 2011.
Foreign reserves held by the State
Bank of Pakistan stood at $12.86
billion while net foreign reserves held
by banks (other than SBP) stood at $
3.81 billion with total liquid foreign
reserves to $16,67 billion.
The International Monetary Fund
(IMF) loan repayments are also due to
start from early next year but Federal
Finance Minister Hafeez Shaikh said
Pakistan would have no trouble
repaying a loan of the IMF.
The two teams met in Dubai for Article
IV consultations referring to annual
talks the fund holds with each member
government to assess the health of
the economy from Nov 9-16, 2011.
The outcome of the meeting remained
flat as the donors asked Pakistan to
meet the demands laid down for the
release of funds.
Pakistan had opted out of an extension
of a three-year IMF $11 billion
emergency loan programme. Pakistan
asked the extension of the $11 billion
loan programme and a new loan
programme.
Pakistani officials repeated their
request to the IMF officials to grant
Pakistan two years grace period to
pay back instalments of loans and
principle amount by 2012.
The IMF has been steadfast on its
stance and succeeded pressing
Pakistan to meet its conditions for
levying tax on the agriculture sector,
enhance energy price and ensure
implementation of general sales tax.
IMF had also indicated that the
conditions for release of last tranche of
$1.85 billion bailout package for
Pakistan would be tougher, agriculture
expert and Karachi Chamber of
Commerce and Industry member
Shakeel Ahmad said.
The IMF also put a proposal before the
Pakistan that surplus cash crops would
be kept under the IMF supervision, he
added.
This will be done in case Pakistan fails
to follow the dictation of IMF for
levying different type of taxes and
increasing cost of utilities, he added.
Pakistan will start paying $8 billion
loan by 2012 and the process will
continue till the next three years.
He said due to the continuous increase
in energy prices, IMF agreed for
releasing funds otherwise the donor
would stop releasing remaining loan
amount besides it was determined to
start audit of the loans accounts.
The rulers on the behest of the IMF
reviewed the domestic economy on
many occasions by levying taxes and
in case of failure the IMF would put
tougher conditions for the release of
loans, Ahmad maintained.
The IMF has also sought amendments
to the State Bank of Pakistans act in
order to provide the central bank with
operational independence.
The IMF wants Pakistan to raise tax
revenue from the present 10 percent
of gross domestic product (GDP) to 15
percent by 2013, which is peril for our
economy. The countrys foreign debt
now stands at more than Rs 6,500
billion and in only two years 2008-09
alone, swelled to Rs 9,600 billion.
The countrys debt was recorded at Rs
10.890 trillion by August 2011 from
Rs 5.799 trillion by March 2008,
showing a net increase of Rs 5.091
trillion or 87.79 percent since
formation of the current government.
As the government revenue is less
than its expenditure, therefore
borrowing of money from both sources
would be a continuous phenomenon
until revenue increases more than the
expenditure.
The government was forced to
intervene in the energy and
commodity markets to keep prices
from getting completely out of reach of
the public. This burden of subsidies
along with higher security-related
expenditures exerted continuing
pressure on the fiscal system and
adjustment path was affected.
---------- Post added at 11:35 AM ---------- Previous post was at 11:33 AM ----------
Daily Times - Leading News Resource of Pakistan
