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Budget deficit rises to Rs 929. 1 billion, against targeted Rs 722. 1 billion in fiscal year 2010

KARACHI   : The overall budget deficit rose to 6.  3 percent of the GDP at Rs 929.  1 billion against the target of Rs 722.  1 billion.   According to State Bank of Pakistan report on economy the government envisaged a narrowing of budget deficit from 5.  3 percent of GDP to 4.  9 percent with a sharp increase in revenues (particularly tax revenues) and containment of current expenditures in the budget estimates for FY10.
However, in terms of actual performance, all fiscal targets of the government were missed during the year.   The report said that the worsening of the fiscal outlook was broadly a result of greater than budgeted disbursement of subsidies, increased security outlays on war on terror and below target tax revenue generation, both by FBR and provinces, during FY10.   On the financing side, the non-availability of budgeted external financing caused pressures on domestic sources, almost throughout FY10.   Although a large share of the total financing requirement was met through non-bank sources, the government had to resort to monetisation of the deficit as well.   As a result, the limits imposed by IMF on borrowings from the SBP were breached during last two quarters of FY10, the report said. 



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