The government is pinning all its hopes on the estimated foreign inflows of $1 billion during the next few days to retain the fiscal deficit at 5.3 percent of the Gross Domestic Product (GDP) during the current fiscal year. An official source said the government had asked Pakistan’s Ambassador to the US Hussain Haqqani to play his role in getting $500 million of dues under the Coalition Support Fund (CSF) released before the close of the current fiscal year, as otherwise the fiscal deficit would exceed the target.
The government is estimating at least $300 million inflows under the CSF, $500 million from the Oil and Gas Development Company Limited (OGDCL) exchangeable bonds and $200 million from the Asian Development Bank (ADB). The recovery of CSF dues was a major worry for the government, as CSF dues till June 2011 had amounted to $1.8 billion but the US authorities had indicated a payment of $500 million by December 31. US authorities were processing the dues and they might release any amount between $300 million to $500 million within the next few days, he added.
To bridge the fiscal deficit, the government had allowed the sale of $500 million worth of OGDCL exchangeable bonds with an additional option of another $450 million. The road shows for OGDCL exchangeable bonds had ended and after approval from the government, the deal could be signed in a few hours, said the source, adding that it would depend upon the proceeds from the US, however. The government had estimated a fiscal deficit of 5.3 percent of GDP during the current fiscal year, which did not include the power sector circular debt. Any delay in foreign inflows would increase the budget deficit by 0.4 percent.
