IA
ISLAMABAD:- The Premier Shehbaz led Federal Government will likely to miss some major targets of including budget deficit, inflation, foreign reserves, foreign investment, releases of PSDP, exports and non-tax revenue during the current fiscal year.
The Finance Ministry has issued Monthly Economic Outlook of Dec 2022 on Friday. According to the report, the country showed poor performance in different economic indicators due to devastation of floods and IMF stabilization performance.
The government showed deteriorated performance in fiscal side during the first five months of the current fiscal year. The budget deficit was swelled by two times during the first five months of the current fiscal year due to flood related expenditures and heavy payments of public debt servicing. The budget deficit was increased to Rs1266 billion from Rs587 billion during the five years of the current fiscal year as compared to the same period of the last fiscal year.
The Government has released only Rs98 billion development expenditures during the five months of current fiscal year as compared to Rs206 billion during the same period of the last fiscal year.
The non-tax revenue was also dropped from Rs452 billion to Rs.346 billion and primary balance was reduced from Rs206 billion to Rs136 billion during the first five months of the current fiscal year as compared to the same period of the last fiscal year.
The Finance Ministry said that the inflation has been surged to 25 percent during the first five months of the current fiscal year as compared to 9.3 percent during the same period of the last fiscal year.
However, the Finance Ministry claims that the inflationary pressure has started easing out mainly due to government’s decisions and low prices of different products in international markets. “It is expected that CPI inflation will remain in the range of 21-23 percent”, the report said.
The standing water due to recent floods in the agricultural lands in different parts of the country may create problem in achieving the assigned wheat sowing target, the report further said.
According to the report, the remittances were also down by 9.6 percent during the period. The report shows that the remittances were reduced by $1.3 billion (9.6 percent) to $12 billion from $13.3 billion during the five months of the current fiscal year as compared to the same period of the last fiscal year.
The exports were decreased by 2 percent to $12.1 billion from $12.3 billion, imports decreased by 16 percent from $29.7 billion to $24.9 billion, FDI fell by 51 percent from $885 million to $430 million during the first five months of the current fiscal year as compared to the same period of the last fiscal year.
The total forex reserves of the country were also depreciating day by day due to low inflows and high outflows during the current fiscal year. According to the report, the foreign exchange reserves were decreased from $24 billion to $11.5 billion during the last one year.
The report shows that the credit to private sector was also in decreasing trend during the first five months of the current fiscal year. According to the report the credit to private sector was decreased from Rs454 billion to Rs90 billion during the current fiscal year. However, the policy rate was increased from 8.75 percent to 16 percent during the last one year which makes expensive and costly to the production cost for business and industrial sector.