Finance minister-in-waiting given dossiers to tackle economic challenges

ISLAMABAD: The incumbent Minister of Finance has given important dossiers to the finance minister-in-waiting in the coming PTI-led government, Asad Umar, regarding tackling the economic challenges facing the country.

Sources told this scribe that the ministry of finance on Wednesday during an informal meeting told Asad Umar about the current economic challenges especially the financial needs of the country in the next few years.

The officials informed Umar about circular debt, current account deficit (CAD), trade deficit and the current situation on the Financial Action Task Force (FATF).

The CAD of country has reached to all time high to 18 billion dollar in last fiscal year while the target of 2017-18 was $9 billon.

In addition, the trade deficit of country surged to $37 billion in the last fiscal year due to mounting imports. The total imports recorded around $60 billion against the target of $48.8 billion.

Pakistan’s foreign reserves with the help of $1 billion Chinese help reached $10349.7 million. On the other hand, Pakistan needs $12 to $14 billion for repayment of loans.

Ministry of finance officials also briefed about the finance minister-in-waiting about the current position on FATF.

Sources told that incumbent FM in its dossier has given different options to repayment of these loans whether to approach to IMF immediately or other financial institutions to solve this crisis.

It is pertinent to mention here that Asad Umer on Tuesday while talking to media had stated that all options are under consideration, including getting borrowings from commercial, bilateral creditors and seeking the IMF support, but its exact size will be worked out after getting the latest estimates of the Ministry of Finance.

In addition to this, FM has given the reform agenda of Federal Board of Revenue (FBR), PIA, Steel Mills and Railways.

The deficit of PIA and PR has accumulated to Rs41 billion and Rs40 billion respectively. Meanwhile, the government is paying Rs400 million to banks as interest payment for Pakistan Steel Mills (PSM).

Sources further told that the losses of power distribution companies have surged to Rs280 billion as incumbent FM informed the Asad Umer how the government solves these issues.

Documents available with Pakistan Today stated that the overall budget deficit to the Gross Domestic Product (GDP) including provinces remained 6.8 per cent in the last fiscal year. The target of BD was 4.1 per cent of GDP in 2017-18.

Total revenue including FBR, pol levy, GIDC, GDS and provinces was estimated at 14.7 per cent of GDP against the target of 17.2 per cent.

The provincial estimates of public expenditure rigidities crossed the 2017-18 budget targets by 4.9 (from 48.1 to 53 per cent of GDP).

Consolidated public expenditure to GDP ratio exceed 21.5 per cent of GDP from the 2017-18 budget target of 21.3 per cent, the document added.

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Shahzad Paracha
The writer is a member of Pakistan Today's Islamabad bureau. He can be reached at [email protected]
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