ISLAMABAD: With a whopping increase by $4 billion, the current account deficit in this financial year is feared to reach $15 to 16 billion due to a reduction in exports and a jump in imports.
The Additional Secretary Ministry of Finance, Zafar Hassan briefed a meeting of Nation Assembly Standing Committee on Finance, Revenue and Economic Affairs, which met here on Wednesday with its chairman Qaisar Sheikh in the chair, that the exports in 2017-18 were expected to be around $24.1 billion against projected imports of $53.5 billion in the financial year ending June 2018.
He said that the current deficit was expected to be increased by $4 billion as compared to the previous deficit of $12 billion. The officials of Ministry of Finance (MoF) also claimed that the budget deficit was also expected to be $16 billion in this fiscal year. According to them, foreign loans and cumulative liabilities were at $88.90 billion.
They also admitted that $7 billion will be needed for repayments of loan and meeting deficits. Out of the payables $2 billion will be the interests. The government needed to arrange $8 billion in short term loans.
Reacting to the disclosures of MoF, member of the committee Asad Umar said that the government is needed to revisit the policy of obtaining short term loans. The Committee also recommended that short term borrowing should be eliminated within the next five months to control the current account deficit in the country.
Asad said that during the past four years the foreign loans have been increased by 50 per cent as the total debt in 2013 was $66 billion but the figure has jumped to $93 billion this year.
The Committee recommended that the financial plan presented by the Ministry of Finance and Revenue should be revisited at the earliest.
While considering the implementation status of the recommendations made by the Committee with regard to the criteria under the State Bank of Pakistan, fit and proper test for appointment of President NBP and qualifying of present incumbent against the fit and proper test. The Committee expressed its displeasure for not receiving the reply from SBP in this regard. The committee members asked the SBP representative to telephone Governor SBP for a response.
A Director of State Bank of Pakistan informed the committee that present incumbent (President NBP) was fulfilled the criteria of said post. The Committee decided that in writing a response may be provided to the Committee at the earliest. The Director, SBP ensured the Committee that a response on the said recommendation would be furnished in the next week.
The Committee discussed the Banks Nationalization Amendment Bill, 2018 and unanimously recommended that the same Bill may be passed by the National Assembly with some amendments.
The Committee discussed the remaining projects of Public Sector Development Program (PSDP) of Finance Division and recommended that required funds may be provided according to the project’s details presented by the Finance Division. While considering the Higher Education Commission (HEC) PSDP projects the Committee recommended that the allocation for FATA University should be enhanced to Rs 250 million instead of Rs 150 million. The Committee further recommended that HEC should give priority to KPK, southern Punjab, interior Sindh and Balochistan, when considering the proposals for new projects and early completion of ongoing projects in said areas.
The Committee decided that Securities and Exchange Commission of Pakistan (SECP) would be called in the next meeting to discuss the status/registration of China Overseas Ports Holding Company Pakistan (COPHC-Pakistan). The Committee further recommended that Ministry of Finance should be asked to give a comprehensive briefing on the issue of Financial Action Task Force (FATF), decision with regards to Pakistan in the same meeting.
The meeting was attended by Ms Arifa Khalid Parvez, Dr Shezra Mansab Ali Khan Kharral, Sheikh Fayyaz-ud-Din, Syed Mustafa Mehmud, Mr Asad Umar, Mr Muhammad Ali Rashid, MNAs, and senior officers from MoF, SBP, and HEC.