Fiscal tightening: SBP opposes debt swap with commercial banks

ISLAMABAD: State Bank of Pakistan on Thursday opposed the debt swap deal with commercial banks, warning the federal government to stop ruining the private sector as the country’s budget deficit widened to 4.5 per cent or Rs932 billion in the first half of the financial year. The same day, despite the comments by the SBP, Prime Minister Yousaf Raza Gilani presented the proposed debt swap deal as a solution to the circular debt while giving a policy statement on the economy in the Parliament. Sources said the SBP raised its concerns in a meeting of Monetary and Fiscal Coordination Board – the statutory body framed to align monetary and fiscal policies that so far have been moving in opposite directions. The meeting was chaired...

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Pakistan’s fiscal deficit for H1 FY11/12 at 2.6 pct of GDP

KARACHI: Pakistan’s fiscal deficit for the first six months of the fiscal year 2011/12 (July-June) was 2.6 per cent of gross domestic product (GDP), a Finance Ministry official told Reuters on Friday. This compared with a deficit of 2.9 per cent of GDP in the same period the previous year. “The full-year fiscal deficit target has also been revised upwards to 4.7 per cent, from the earlier estimate of four per cent,” said the official, who declined to be identified. The fiscal deficit widened to 6.6 per cent of GDP in the 2010/11 fiscal year. “Containing fiscal deficit to 4.7 per cent in this fiscal year looks like an extremely difficult task, especially as it is election year,” said Asif Qureshi, director at Optimus Capital...

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Posted in: BUSINESS