ISLAMABAD, Dec 14: With Pakistan’s fiscal deficit in first five months of the fiscal year jumped to 2.8 per cent of GDP that was even higher than first six months of the last fiscal year, Finance Minister Abdul Hafeez Shaikh on Friday said the country’s macroeconomic situation was “difficult but manageable”.

According to provisional data compiled by the ministry of finance, the tax collection by Federal Board of Revenue amounted to Rs675 billion in July-November period while non-tax revenue stood at Rs360 billion.

An official said the government made an interest payment of Rs495 billion in first five months while an amount of Rs110 billion had been released for the Public Sector Development Programme (PSDP).

The overall fiscal deficit in first five months had been worked out at 2.8 per cent of GDP or about Rs670 billion. This was slightly higher than half yearly fiscal deficit of 2.5 per cent of GDP last year.

The government resorted to a bank borrowing of Rs578 billion in the July-Nov period and about Rs94 billion from the State Bank.

On the sidelines of a news conference on signing of an integrity pact between the Pakistan Telecommunication Authority and Transparency International for auction of third generation telecom licences, the finance minister declined to comment on a number of questions relating to macroeconomic situation and sliding exchange rate in the market except to say that the situation on macroeconomic indicators and foreign exchange reserves was “difficult but manageable”.

A senior government official, however, confirmed that the government was working closely with the International Monetary Fund (IMF) to have breathing space during the upcoming political transition because whatever the government may say about soundness of the foreign exchange reserves and macroeconomic conditions, the market players and the media took a different view and fed each other into speculative activities leading to declining reserve position and currency devaluation.

Therefore, the government wanted to have some kind of arrangement with the IMF for the ‘medium term’ so that the interim government or the next political government did not face crisis situation created by political uncertainty and speculations.

“Three governments are going to change hands in a short period of time i.e. the current government, the interim government and the next democratic government”, said the official adding the IMF also was realizing that some kind of cooperation was a must to avoid a bumpy transition.

The official said the new medium-term arrangement would also be discussed with the IMF mission expected to visit Pakistan early next month after some kind of understanding with the main opposition party Pakistan Muslim League-N.

Declining to define the medium term period, the official said the fresh arrangement could either be in the form of deferred payments to the IMF or taking a short term loan to repay existing IMF loan.

He said there was no big difference between the two options but the government would have shown some seriousness for the interim period until June next year.

The official said that Pakistan was expecting $600 million from the United States on account of coalition support fund within a couple of weeks.