Pakistan to incur highest ever Rs5.6 trillion fiscal deficit by year-end — PM’s aide

Money dealers counts Pakistani rupees (R) and US dollars at a currency exchange in Islamabad, Pakistan, on March 12, 2014. (AFP/File)

• Miftah Ismail says deficit will end up even higher at $34.4 billion after adding $4.3 billion supplementary grants
• Pakistan is likely to hit record $45 billion trade deficit during the current fiscal year due to increasing imports

KARACHI: Pakistan is slated to incur the highest ever Rs5.6 trillion ($30.3 billion) fiscal deficit by the end of this fiscal year, an aide to Prime Minister Shehbaz Sharif said on Tuesday. 
Sharif, 70, the younger brother of former premier Nawaz Sharif, was elected as prime minister on Monday, followed by a week-long constitutional crisis after parliament ousted Imran Khan in a no-confidence vote. But his elevation doesn’t solve the country’s economic woes, including high inflation and a soaring energy crisis. 
Miftah Ismail, a key member of Sharif’s Pakistan Muslim League-Nawaz (PML-N) party and a top contender for the post of finance adviser, accused Khan’s government of causing a huge fiscal deficit. 
“The officials of previous government informed us that the country would face a deficit of around Rs4 trillion ($21.6 billion) but they were wrong,” Ismail said at a press conference in Karachi. 
“This deficit will increase to Rs5.6 trillion, which is by far the highest ever deficit in the history of Pakistan.” 
Ismail, also a former finance minister, said the deficit would end up even higher at Rs6.4 trillion ($34.4 billion) after adding Rs800 billion ($4.3 billion) supplementary grants. 
“Out of the Rs800 billion, Rs220 billion alone needs to be given to the Sui Northern Gas Pipeline Limited (SNGPL) while another Rs80 billion needs to be disbursed to power generation companies to keep them operational,” he said. 
Ex-PM Khan recently announced a relief package to counter inflationary impacts, but Ismail termed the Rs373 billion ($2 billion) subsidies a “landmine laid for Shehbaz Sharif’s government.” 
“They (Khan’s government) were wrong that they could finance the package. This would add to the deficit and the IMF (International Monetary Fund) has not agreed with it either,” Ismail said, adding the new government would have to renew talks with the IMF. 
Speaking about the trade deficit, the PML-N leader said it was likely to hit $45 billion during the current fiscal year, which he said would again be a record. 
“Pakistan’s imports are going to hit a record $75 billion, whereas the country’s exports will reach $30 billion,” he said. 
Pakistan will be required to make payments of $30 billion in the next fiscal year and it would be crucial for the country to take the IMF on-board, Ismail said. 
He supported PM Sharif’s decision to increase minimum wage by 20 percent to Rs25,000 ($135), saying the move would provide relief to people suffering from high inflation. 
He said as soon as the new government took over, the economy had started showing positive signs, with both stock and currency markets posting huge gains. 
Pakistan’s stock market on Monday witnessed the highest single-day increase in the trading of shares, with the benchmark KSE100 index surging by 1700 points. The stocks closed positive on Tuesday as well.