Islamabad
\nThe Federation of Pakistan Chambers of Commerce & Industry\u2019s Businessmen Panel has called for keeping check on government expenditure and high cost of debt servicing to contain budget deficit, as the Pakistan\u2019s federal budget deficit projection has been revised to history\u2019s highest to over Rs4 trillion, highlighting the unending fiscal woes that have pushed the country into a debt trap despite putting additional burden of billions of rupees on industry in the current fiscal year.
\nThe FPCCI former president and BMP chairman Mian Anjum Nisar has warned the high cost of doing business has been hurting the economic growth, hurting the trade and industry the most, which faced the brunt of a staggering increase in gas and power prices.
\nThe FPCCI former president said that the failure to reform the tax system is a major factor behind heavy domestic and foreign borrowings by the government.
\nMian Anjum said that the most serious threat to the economy in the current fiscal year is high cost of production, because it is already hitting economy due to continuous raise in oil prices and depreciation of local currency. Quoting the Pakistan Bureau of Statistics, he said that the Consumer Price Index surged last month compared to a year ago.
\nThe increase was more than market expectations and has lessened the prospects for a cut in the interest rates, which stand at the country\u2019s highest ever level.
\nThis reading, the first announced by the PBS after the recently concluded International Monetary Fund talks, in which the global lender also cut the inflation forecast for Pakistan to single digit, may strengthen the IMF\u2019s view of keeping the policy rate.
\nHe predicted that inflation would remain low and may even decline further due to market frictions caused by relative demand and supply gap of essential items, exchange rate depreciation and recent upward adjustment of administered prices of petrol and diesel.
\nExpressing serious concern over the high jump in country\u2019s budget deficit, BMP chief said the revision has been made in light of agreement with the International Monetary Fund, which exposed the massive underreporting of expenditures at the time of budget presentation by the finance ministry.
\nThis is a highly unsustainable level and has already pushed the country into a situation where debt restructuring seems to be the only viable option.
\nThe PIAF and BMP leader maintained that the failure to reform the tax system and increase revenue collection is a major factor behind heavy domestic and foreign borrowings by the government.
\nMian Anjum Nisar said that the privatization commission of Pakistan is struggling since months to effectively put in place the privatization of loss-making public sector enterprises; notably, the Pakistan Steel Mills and Pakistan International Airlines despite the urgency and concern expressed, time and again, by the IMF.
\nThe decision-making processes and any constitutional amendment are likely to be driven and influenced more by conflicting self-interests of the coalition partners, watering down the key objectives.
\nThis is not what the country needs in these unprecedented times of political and economic challenges confronting the nation. He observed that the most serious threat to the economy in the current fiscal year is high cost of production, because it is already hitting economy due to continuous raise in oil prices and depreciation of local currency.
\nQuoting the Pakistan Bureau of Statistics, he said that the Consumer Price Index surged last month compared to a year ago. The increase was more than market expectations and has lessened the prospects for a cut in the interest rates, which stand at the country\u2019s highest ever level.
\nPakistan\u2019s government liquidity and external vulnerability risks will remain very high until there is clarity on a credible longer-term financing plan.
\nIt said Pakistan\u2019s foreign exchange reserves remained normal now, sufficient to cover several months of imports and well above what was required to meet external financing needs for the next three to four years.
\nBased on the IMF\u2019s report published in January, Moody\u2019s said Pakistan\u2019s external financing needs were about $24 billion in the next fiscal year (Jul-Jun) 2024-25 and about $25 billion annually in fiscal 2026 and 2027. The country will need a longer-term financing plan to meet its very large financing needs for the next few years, after its current IMF program ends next year.
\nAt present, Pakistan has been assigned a stable rating of \u201cCaa3\u201d by Moody\u2019s. It said prolonged delays in the formation of a government would increase policy and political uncertainty at a time when it faced very challenging macro-economic conditions.
\nIn view of the low level of available FX reserves, the debt management strategy of Pakistan may have to be revisited, to ensure the stability of Pakistani rupee and restoration of international capital markets\u2019 confidence in the economy of Pakistan.
\nHe expressed surprise at the impact of the gas price hike, stating that it has surpassed market expectations. His analysis suggests that PBS included fixed costs, such as meter rent, in the weekly inflation calculation in addition to the gas tariff hike.<\/p>\n","protected":false},"excerpt":{"rendered":"
Islamabad The Federation of Pakistan Chambers of Commerce & Industry\u2019s Businessmen Panel has called for keeping check on government expenditure and high cost of debt servicing to contain budget deficit, as the Pakistan\u2019s federal budget deficit projection has been revised to history\u2019s highest to over Rs4 trillion, highlighting the unending fiscal woes that have pushed …<\/p>\n","protected":false},"author":4,"featured_media":67984,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-72142","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/posts\/72142","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/comments?post=72142"}],"version-history":[{"count":1,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/posts\/72142\/revisions"}],"predecessor-version":[{"id":72154,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/posts\/72142\/revisions\/72154"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/media\/67984"}],"wp:attachment":[{"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/media?parent=72142"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/categories?post=72142"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/tags?post=72142"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}