ISLAMABAD: Foreign aid mostly in the shape of loans for development projects is likely to exceed the envisaged budgetary target for the outgoing fiscal year, a top official said on Monday.
“The multilateral and bilateral creditors have disbursed Rs140 billion for different development projects as part of the Public Sector Development Program (PSDP) in the first eight months (July-February) period of the current fiscal year against the full year target of Rs160 billion,” the official said.
“The rupee component of the PSDP will be slashed down accordingly in order to restrict the budget deficit within the desired limits.” The official added that efforts would be made to curtail the PSDP utilisation much below Rs800 billion mark against the envisaged target of Rs1,001 billion for the outgoing fiscal year ending on June 30, 2018.
All this will be done to avoid overshooting of the budget deficit again this year as many economists are predicting that it may touch six percent of the gross domestic product (GDP) for fiscal year 2017/18 against 5.8 percent for last financial year 2016/17.
The government is going to inform the National Economic Council (NEC) on Tuesday (today) that the Planning Commission (PC) released Rs623 billion for the execution of development projects in both rupee and foreign exchange component so far. The disbursement was against the allocated amount of Rs1,001 billion for the outgoing fiscal year.
As of April 19, 2018, Rs623 billion or 62 percent of the total allocated amount of Public Sector Development Program has been disbursed, of which rupee release is around Rs483 billion or 58 percent of allocation compared to admissible limit of 65 percent.
Out of total Rs1,001 billion Public Sector Development Program for 2017/18, the rupee component is Rs839 billion and foreign exchange component is Rs162 billion. Of total foreign exchange component, the donors disbursed Rs140 billion till February 2018 indicating that the multilateral and bilateral creditors had already released 86 percent of the allocated resources for execution of donor funded projects in Pakistan.
“We will definitely exceed the foreign aid component with margin but the Economic Affairs Division (EAD) has been working to finalise the revised estimates of foreign aid for the outgoing fiscal year,” the official said.
The government will further inform the NEC that non-release of funds to unapproved projects and projects where ministries could not complete codal formalities for release of funds on time have an issue and this gap may be filled as there is a likelihood of over-disbursements of foreign aid compared to the budgeted amount in the outgoing financial year 2017/18.
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