ISLAMABAD - The spokesman of the Finance Division on Tuesday said that debt and fiscal operations data of general government for the first quarter of the current financial year has been finalized.

Civil Accounts data of revenue receipts and expenditure of the federal government for the first quarter has been received from the office of AGPR, financing data from EAD (external financing) and from SBP (bank and non bank) as well as civil accounts containing provincial governments revenue and expenditure have been received from provincial AGs.

Based on actual data, overall fiscal deficit for the period July-September, 2017 has been worked out at 1.2 percent of GDP as against 1.3 percent of GDP during the same period last year. Total consolidated federal and provincial revenue amounted to Rs1,025 billion reflecting an increase of 18.9 percent over same period last year.

FBR tax collection amounted to Rs765 billion showing a strong growth of over 20 percent. Non tax receipts for this period amounted to Rs114 billion which are also higher when compared to same period last year. Total expenditure amounted to Rs1,466 billion, of which current expenditure was Rs1,241 billion while development expenditure was Rs221 billion.

Statistical discrepancy for the period July-September, 2017 amounted to Rs4 billion as against Rs38 billion during the same period last year. The spokesman stated that the deficit figure reported earlier was based on daily cash balance reports of the SBP which did not include financing on account of project aid and financing from National Savings Schemes.

The financing from project aid was substantially higher on account of roads and infrastructure. Around 47 percent of the budget estimates have been received as project aid financing during July-September, 2017 on this account. This has mainly been received during September, 2017.

Incremental receipts on account of National Savings Schemes have recently been reported by SBP. The federal government deposits with SBP were also reduced during the month of September, 2017. Therefore, after including the afore mentioned financing data, overall fiscal deficit for the period July-September, 2017 amounted to 1.2 percent of GDP as against 1.5 percent to 1.8 percent of GDP being projected by some writers which is being calculated using wrong assumptions and self-manufactured data.

The spokesman said a section of the media has drawn some premature conclusions on debt performance of the government based on the data for the first two months of the current fiscal year. It is clarified that evaluating debt statistics based on two month numbers is flawed and misrepresentative.

Provisional Gross Public debt increased by approximately Rs652 billion during first quarter of 2017-18 as against Rs1 trillion reported in various media reports. Domestic debt recorded an increase of Rs853 billion during first two months of current fiscal year while it settled at Rs520 billion during first quarter of current fiscal year.

The increase recorded in the domestic debt during July-August, 2017 was subsequently reversed as the revenue figures picked up and government reduced its cash buffers primarily to retire some of the in-quarter borrowings. Resultantly domestic debt stock was reduced by Rs333 billion during September 2017.

There is a need to understand that seasonality in government borrowings/deposits may be observed during short period of time owing to timing mismatches between the revenue and expenditure streams. However, it is usually reversed at the end of each quarter.

Specifically, any disconnect between borrowing and fiscal deficit financing is reversed on half yearly or annual basis which is a normal practice throughout the world and Pakistan is no exception;

It is worth noting that out of gross increase in domestic debt amounting Rs520 billion, net increase in domestic debt was recorded at Rs428 billion while the rest of the increase went to increase the liquid assets of the government that could be used in the subsequent period towards meeting government’s financing requirement/contingencies.

Similarly, external public debt recorded a provisional increase of approximately Rs132 billion which was predominantly driven by translational losses on account of appreciation of international currencies against US dollar and depreciation of Pakistani rupee against US dollar. Therefore, incremental mobilisation from external sources was almost negligible during first quarter of current fiscal year.