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ISLAMABAD: Insisting that its external repayment obligations stand at $18 billion for the current year, Pakistan has asked the World Bank (WB) to rectify its ‘error’ that put external obligations at $31bn.
“The matter has been taken up with the World Bank to rectify the error,” said the finance ministry on Sunday after a meeting presided over by Finance Minister Ishaq Dar.
The meeting reviewed first quarter performance of the national economy — including revenue collection, imports, exports, remittances etc — and noted that “external inflows are expected to be sufficient to meet repayment obligations”.
In a recent report, the World Bank has estimated Pakistan’s current year international repayment obligations at $31bn, raising public concern that the country may not have enough resources to meet these targets.
In a report, Bank has estimated country’s current year international repayment obligations at $31bn
The finance ministry, however, said the World Bank had erroneously included portfolio investment worth $13.8bn for its estimates that were not part of the repayment obligations. “As per the international reporting standards, portfolio investment is not included while calculating the gross financing needs of a country”, it said.
The meeting was briefed about the estimates of gross external financing needs during the current fiscal and noted that the World Bank report had “erroneously indicated Pakistan’s gross external financing needs at $31 billion for the current fiscal year”.
The finance ministry said the report was based on “misinterpretation” of standard definition of the gross financing needs of the country. Based on the international reporting standards, Pakistan’s actual gross financing need for FY 2017-18 is estimated at $18bn (5.3 per cent of GDP) and not $31bn (9pc of GDP).
The meeting was informed that exports and remittances had improved and imports had slowed down during the first two months of the current fiscal. Finance Minister Dar directed his ministry to proactively work with the World Bank to ensure correct reporting of economic data.
The meeting expressed satisfaction that efforts were in hand to ensure that the strong fiscal performance of the first quarter of the fiscal was maintained during the second quarter and beyond.
It was also briefed on the progress in taxpayer’s outreach programme launched by the Federal Board of Revenue for broadening of tax base, including workshops on e-filing of returns for members of tax bars, professional bodies and chambers of commerce and industry.
Large corporate employers have been approached to ensure the filing of returns by all employees receiving taxable salary and help desks have been established in tax offices throughout the country to facilitate return filing.
The meeting noted that efforts for taxpayer’ facilitation were yielding results and up to more than 352,000 returns had been received as on Oct 13 against 162,000 returns received up to the same date last year.
Published in Dawn, October 16th, 2017
