ISLAMABAD - The government might struggle to contain budget deficit at 4.7 per cent of the GDP during the current financial year 2012-13 due to unexpected disbursement of foreign inflows on various accounts and poor performance of the Federal Board of Revenue (FBR) regarding tax collection so far, it was learnt from sources.

Background discussions with officials of the finance ministry have revealed that country’s budget deficit might exceed than the target set by the government (4.7 per cent) during the fiscal year to be ended on June 30 2013, as there is bleak chances for disbursement of foreign inflows particularly $500 million on account of Eurobonds and $850 million from Etisalat as part of the deal of PTCL privatisation. Similarly, FBR is struggling to achieve the revenue collection target during the ongoing fiscal year. Sources were of the view that deficit could go up to around five to six per cent of the GDP against the target of 4.7 per cent of the GDP.

The Federal Board of Revenue (FBR) has provisionally collected Rs 509 billion during the first four months (July-October) of the current financial year 2012-13 against the target of around Rs 599 billion thus leaving shortfall at Rs 90 billion. The revenue collection target for the ongoing financial year is set at Rs 2,381 billion, which seems difficult to achieve without additional revenue generation measures.

Sources further informed that government is still not optimistic that it would receive foreign inflows of $1350 million from various accounts like issuing of Eurobonds and pending amount from Etisalat as part of deal of the PTCL privatisation during the current fiscal year.  Sources said that fiscal deficit already recorded at 1.2 per cent of the GDP during the first quarter (July-September) of the ongoing fiscal year 2012-13 and it would go to 4.8 per cent of the GDP if the current economic situation prevails in remaining three quarters. However, sources were of the view that unexpected disbursement of foreign inflows in next three quarters would increase the troubles of the beleaguered government and deficit could go to in the range of five to six per cent of the GDP.

It might be mentioning here that International Monetary Fund (IMF) has reportedly estimated that Pakistan’s fiscal deficit would go to around 6.1 per cent of the GDP during the present fiscal year 2012-13.