External financing to reach over $11.6bn in 2018-19

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KARACHI: The total inflows of external financing are expected to the tune of over $11.653 billion during the upcoming fiscal year (2018-19).

“Total inflows of external financing are expected to be $11,653.9 million during 2018-19 with project loans worth $4,835.2 million and programme loans worth $1,818.6 million,” said sources in the Economic Affairs Division.

According to figures, the country would receive financing of $3130.8 million from bilateral sources which may include Germany, China, Japan, America, Saudi Arabia and others.

Another major chunk of inflows of $3523.1 million would come from the multilateral sources while the government is estimated to collect $3 billion from raising bonds and $2 billion from commercial banks, the sources added.

“The government will adhere to the policy of fiscal consolidation during 2018-19 to maintain the fiscal deficit in manageable limits and within the ceilings of Fiscal Responsibility and Debt Limitation Act (FRDLA), 2005,” they added.

On the other hand, the FBR will continue its tax reform programme for broadening the tax net and reforming the tax administration.

The debt management functions would primarily be focused on fulfilling the financing needs at lowest possible costs consistent with prudent degree of risks’ broadening the investor base and a well-functioning domestic debt capital market, lengthening the maturity profile of domestic debt, and mobilization of maximum available soft external financing.

Meanwhile, the sources said that the fiscal performance remained on track during the first half of 2017-18 with a deficit of 2.3 per cent of GDP against the annual target of 4.1 per cent and 2.5 per cent of the comparable period of last year due to higher growth of total revenue and comparatively lower growth of current expenditure.

The analysis of financing-mix of the fiscal deficit during the period under review reveals that the government relied more on domestic than external resources.

Within domestic resources, greater reliance was on bank borrowing to the tune of Rs332 billion.

Pakistan’s gross public debt stock as on 31st December 2017 stood at Rs22,821 billion, registering a growth of 6.6 per cent over the debt stock as on 30th June 2017.

The build-up in public debt was on account of both domestic and external debts which grew by 4 per cent and 12.6 per cent, respectively.

Net government debt stood at Rs20,879 billion during the same period, posting a growth of 6.3 per cent. The gross public debt was 67 per cent during 2016-17 which was slightly below the previous year’s level of 67.7 per cent.