The spokesman
of the Finance Division said here Tuesday that
Debt and fiscal operations data of general government for the Q1 2018
(July-September, 2017) have been finalized. Civil Accounts data of revenue
receipts and expenditure of the federal government for Q1 of CFY has been
received from the Office of AGPR, financing data from EAD (external financing)
and from SBP (bank and non bank) as well as civil accounts containing
provincial governments revenue and expenditure have been received from
provincial AGs.
· Based on
actual data, overall fiscal deficit for the period July-September, 2017 has
been worked out at 1.2% of GDP as against 1.3% of GDP during the same period
last year.
· Total consolidated
federal and provincial revenue amounted to Rs.1025 billion reflecting an
increase of 18.9% over same period last year.
· FBR tax collection
amounted to Rs.765 billion showing a strong growth of over 20%.
· Non tax
receipts for this period amounted to Rs.114 billion which are also higher when
compared same period last year.
· Total
expenditure amounted to Rs.1466 billion, of which current expenditure was
Rs.1241billion while development expenditure was 221 billion.
· Statistical discrepancy
for the period July-September, 2017 amounted to Rs.4 billion as against Rs.38
billion during the same period last year.
The
Spokesman added that the deficit figure reported earlier was based on daily
cash balance reports of the SBP which did not include financing on account of
project aid and financing from National Savings Schemes. The financing from
project aid was substantially higher on account of roads and infrastructure.
Around 47% of the budget estimates have been received as project aid financing
during July-September, 2017 on this account. This has mainly been received
during the month of September, 2017. Incremental receipts on account of National
Savings Schemes have recently been reported by SBP. The federal government
deposits with SBP were also reduced during the month of September, 2017.
Therefore, after including the afore mentioned financing data, overall fiscal
deficit for the period July-September, 2017 amounted to 1.2% of GDP as against
1.5% to 1.8% of GDP being projected by some writers which is being calculated
using wrong assumptions and self-manufactured data. The spokesman
said a section of the media has drawn some premature conclusions on debt
performance of the government based on the data for the first two months of the
current fiscal year. It is clarified that evaluating debt statistics based
on two month numbers is flawed and misrepresentative.
Now that debt numbers from relevant agencies such as Economic
Affairs Division, Budget Wing, National Saving and State Bank has been received
and consolidated for the first quarter of CFY. It has become quite clear that
the increase in public debt is well below the projections that were being made
by some critics. The debt statistics at the end of first quarter of 2017-18
clearly depict that:
·
Provisional Gross Public debt increased by
approximately Rs. 652 billion during first quarter of 2017-18 as against Rs.1
trillion reported in various media reports.
·
Domestic debt recorded an increase of Rs.853 billion during
first two months of current fiscal year while it settled at Rs.520 billion
during first quarter of current fiscal year. The temporary increase in domestic debt during first two months of
current fiscal year was due to timing mismatch between revenue and expenditures
and on account of cash buffers built to comfortably meet the bullet maturities.
·
The increase recorded in the domestic debt during July-August,
2017 was subsequently reversed as the revenue figures picked up and government
reduced its cash buffers primarily to retire some of the in-quarter borrowings.
Resultantly domestic debt stock was reduced by Rs.333 billion during the
month of September 2017. There is a need to understand that seasonality in
government borrowings/deposits may be observed during short period of time
owing to timing mismatches between the revenue and expenditure streams.
However, it is usually reversed at the end of each quarter. Specifically, any
disconnect between borrowing and fiscal deficit financing is reversed on half
yearly or annual basis which is a normal practice throughout the world and
Pakistan is no exception;
·
It is worth noting that out of gross increase in domestic debt
amounting Rs.520 billion, net increase in domestic debt was recorded at Rs.428
billion while the rest of the increase went to increase the liquid assets of
the government that could be used in the subsequent period towards
meeting government’s financing requirement/contingencies;
·
Similarly, external public debt recorded a provisional
increase of approximately Rs. 132 billion which was predominantly driven by
translational losses on account of appreciation of international currencies
against US Dollar and depreciation of Pak Rupee against US Dollar. Therefore,
incremental mobilization from external sources was almost negligible during
first quarter of current fiscal year.
·
Details of fiscal operations of the Federal Government as well
as the debt statistics for Q1 of CFY show strong fiscal performance and prudent
expenditure management. On one hand, revenue collection especially tax revenue
collection registered a strong growth of over 20 percent during Q1 of the CFY
while on the other hand, government borrowings both domestic and external were
kept under check. In addition, there were expenditure controls as well. This
reflects on the prudent fiscal management during Q1 of CFY and government's
resolve to maintain this momentum in the remaining quarters of the year.
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