Pakistan’s fiscal deficit to surge this year: Dr Abdul Hafeez

ISLAMABAD (REUTERS): Advisor to Prime Minister on Finance Dr Abdul Hafeez Sheikh has asserted that Pakistan’s fiscal year will surge to nine percent in the ongoing fiscal year.

In an interview with an international news agency, Dr Abdul Hafeez Sheikh said, “The expectation of the deficit we had prior to the coronavirus was 7.6 percent. Now, after corona, we think the deficit will touch 8 percent plus and that it might be 9 percent.”

The Finance Advisor further said that the country will also miss a tax revenue target that had recently been downwardly revised. “The government is set to collect Rs 3.9 trillion in taxes, 19 percent below the downwardly revised target of Rs 4.8 trillion,” he added.

He said, “The government was targeting growth of 2.4 percent in the fiscal year 2019-20 but the ongoing coronavirus pandemic has affected the economy,” adding, “Revenue has taken a hit. Exports have taken a hit. Remittances have taken a hit, and, above all, our people are suffering.”

He also informed that Pakistan had applied for the debt relief – offered by G20 – that will defer payment of around $1.8bn for Pakistan for one year.

He said, “World Bank and Asian Development Bank are giving us special packages,” adding, “If the creditors are not knocking on your door right now then you can use this period to try and divert that money into more pressing needs at home.”

“The first goal is to ensure the safety of the people of Pakistan from coronavirus and then country’s economy,” he said, adding that he would do his best to try to secure maximum funds for a cash handout to the poor.

Hafeez Sheikh also said, “Although no one knows how long the coronavirus crisis is going to last, however, the government would try to slash the fiscal deficit in the next budget as well as cut expenditures, which could be anywhere including defence.”