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The Advisor To Prime Minister Reviews The Economic And Fiscal Situation

Islamabad: A meeting was held on 21st February 2011 under the chairmanship of Dr. Abdul Hafeez Shaikh, Advisor to Prime Minister on Finance and Revenue. The meeting was attended by the Deputy Chairman Planning Commission, Chairman FBR, Secretary Finance, Secretary EAD and officials of the Finance Ministry.

The Advisor to Prime Minister on Finance and Revenue reviewed the overall economic and fiscal situation, federal revenues, external flows and development budget. Advisor was informed that during the first seven months of current Financial Year, CPI inflation stood at 10.7% as compared to 14.3% during the corresponding period of the previous financial year. The food inflation dropped from 19.3% to 11.5% during the period under review. Exports increased by 7.2% and foreign remittances registered a growth of 21% resulting in stability in foreign exchange reserves at US $ 16.8 billion.

The Finance Secretary apprised the meeting that the fiscal deficit was contained at 3.1% of GDP from July 2011 to Jan 2012 which shows a decline from 3.4 % in the corresponding period of previous Fiscal Year. FBR revenues registered a growth of 27% during July, 2011-January, 2012 (Rs 975 billion as against 770 billion collected last year).

Total federal expenditure was limited to 53% of the budget as against proportionate budget target of 58% demonstrating federal government’s austerity drive and resulting in the savings of 5% of the budget.

The total federal development releases during the same period amounted to Rs 202 billion including the foreign project aid disbursement of Rs 60 billion. The government is committed to maintain the PSDP annual target of Rs 300 billion which is an increase of about 30% over the last Fiscal Year’s actual spending.

The Advisor emphasized the importance of continued efforts to maintain fiscal austerity, revenue mobilization reforms and focus on completion of development projects. Advisor also stressed the need to keep vigil on all economic fronts in the face of a possible global recession.

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