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Shamshad hints at missing revenue collection target for FY17-18

Shamshad hints at missing revenue collection target for FY17-18

ISLAMABAD: While rejecting the notion of former finance minister Ishaq Dar regarding giving the stretch revenue as well as other financial targets, caretaker Finance Minister Shamshad Akhtar, Tuesday, said that revenue target should be realistic not the optimistic. She also hinted that the government would not meet the revenue collection target set for the outgoing fiscal year 2017-18.

She said that the government regulates the petroleum prices on determined formula, “we do not want to increase the prices till Eidul Fitr but we are bound of different reasons.”

She indicated that petroleum prices will surely increase in coming months also.

While giving the clear picture of Pakistan’ economy in a joint press conference along with Minister for Information and Broadcasting Syed Ali Zafar, Finance Minister Shamshad Akhtar said that economy was running above the targets on financial matters.

The finance minister said that Pakistan’s macroeconomic situation was stable; GDP growth rate was at 5.8 percent, and inflation was under control.

She also rejected speculation that the caretaker government would approach the International Monetary Fund (IMF) for loans. The caretaker government cannot hold talks or sign a deal with IMF, but “we can hold the technical negotiation with any agency or stakeholders”.

She further said that the caretaker setup will give financial as well as other guideline to the elected government. It depends on the government to follow or not. “We are carefully monitoring the reserve situation and government will fulfill the financial obligations what come May.”

The finance minister observed that the caretaker setup was facing the three problems such as current account deficit, fiscal deficit and circular debt matter. “We have a serious problem of CAD. The outgoing government had set CAD target 8.9 billion dollar; however, it has surged to 14 billion dollar which is 1.6 percent of GDP.”

“We will fulfill the commitments regarding the balance of payment. This is a positive sign that exports are now increasing which is now recorded 20.6 billion dollar whereas import were witness in 44.5 billion dollar and the trade deficit is 24.9 billion dollar and we have to make measures of reducing them,” she added.

Finance Minister Shamshad admitted that country would miss the fiscal deficit target of 4.1 percent as it has not reached 6.1 percent: Pakistan overall public debt has reached 70 percent of GDP excluding the circular debt.

Shamshad Akhtar said that the GDP growth would remain 5.8 percent in this fiscal year as every sector has outperformed. The increase in growth not only witness in demand but in supply side because investment came into Pakistan. Therefore Pakistan needed long term structural reforms to achieve progress goals.

Explaining the reason behind the Rs4.26 per-liter hike in petrol prices, the interim finance minister said the increase in petroleum prices followed a certain formula. Oil prices are determined by global prices and all governments have to adjust petroleum prices. However, she added, petroleum prices in the global market had surged from 5 percent to an 11 percent which had adversely affected them.

Shamshad Akhtar said their current account deficit was worrisome & required structural reforms. She said it had surged from $8.9 billion to $14 billion. The minister also said structural balance of payments was 1.6 percent of GDP caused by slow exports, which was a global phenomenon

Spelling out the reasons behind the recent extended hours of load-shedding, Barrister Zafar said power cuts were caused by the electricity shortfall resulting from growing demand of power owing to hot weather. He said there was an extreme shortage of water in dams and Port Qasim and Balloki power plants also developed technical faults, which caused over 5000 MW reduction in power in the national grid.

He said water level in dams has increased after rains and the technical faults in the plants have been removed, and now the situation has considerably improved. The minister said at present 21,000 to 22000 megawatts of electricity is being produced against the demand of 23,000 to 24,000 MW, facing a shortfall of 2000 MW.

He said the country has a total installed capacity of 28,000 megawatt. Expressing the caretaker government’s commitment for transparent elections, he assured that they willfully support to the Election Commission of Pakistan to hold free, fair and peaceful elections. He categorically stated that the caretaker government will make no compromise on security of the country.