ISLAMABAD, June 3: The federal government is expecting $2.232 billion balance of payment (BOP) support from external resources during fiscal 2003-04.
Finance ministry sources said that BOP support from external resources would be around 12 per cent lower than current year’s $2.537 billion. Of the total external BOP support, $1.997 billion would be the loan and $235 million grant.
Official figures made available to Dawn suggest that annual development plan (ADP) financing through external resources would be $2.297 billion next year against current year’s $2.353 billion, showing a decline of around 2.4 per cent. This would include $1.98 billion loan and $317 million grant.
The total $2.232 billion BOP support would include $819 million project aid, $1.011 billion non-project aid and $402 million short-term loan and Afghan Refugees Assistance.
The project aid of $819 million next year would include $697 million loan and $122 million grant. During the current year, project aid to Pakistan amounted to $809 million including $743.5 million loan and $65.7 million grant.
During the next year, Asian Development Bank would provide $400 million under non-project aid, against current year’s non- project aid of $460 million. Similarly, the World Bank assistance would also decline to $500 million next year against $705 million it provided for BOP support during the current fiscal.
The BOP support from the US has been estimated at zero while $45 million emergency budgetary assistance is expected from Japan against $64 million provided during the current year.
Likewise, the UK would increase its BOP support to Pakistan to $66 million next year against $57 million it extended during the current fiscal. There would be no support from the EU, Netherlands and Saudi Arabia next year against $39 million last year.
The government is expecting about Rs177 billion overall budgetary deficit (about 4 per cent of the GDP) during 2003-04. Total expenditure for 2003-04 has been estimated at Rs937 billion against revenue estimates of about Rs760 billion. Total revenue receipts include tax revenue, surcharges and non-tax revenues.
The IFIs have always been insisting to cut down non- development expenditure to spare more funds for development activities.
However, officials in balance of payment the finance ministry said that non-development expenditure has already been squeezed to a maximum and there was no further room for reduction in defence budget until relations with India improved while government intended to rather increase debt servicing to get rid of costly debt as soon as possible. During the current fiscal year, Pakistan wanted to achieve 4.7 per cent fiscal deficit target or Rs192 billion. The government had announced a target of 4.4 per cent fiscal deficit in the budget 2002-03 but later revised upward to 4.7 per cent due to continued losses of power utilities, which are estimated to consume around Rs54 billion by end of the current fiscal year.
