Pakistan ties in turmoil, US holds up payments
The US has held up a reimbursement of USD 400 million spent by Pakistan on the war against terror due to the strained relationship between the two countries.
Islamabad: The US has held up a reimbursement of USD 400 million spent by Pakistan on the war against terror due to the strained relationship between the two countries, adding to the worries of financial managers in Islamabad, a media report said on Monday.
The US Congress is yet to "notify" the reimbursement of USD 400 million from the Coalition Support Fund (CSF) and Pakistan is unlikely to receive the payment by June 30, when the current fiscal year will end.
The delay will contribute to a surge in the fiscal deficit by 0.2 percent, taking it to 7.5 percent of GDP for the current financial year.
For release of outstanding dues from the CSF, the US administration requires a notification from the Congress 15 days before the formal release of the amount.
The time for issuing the notification has been exhausted and it is unlikely that Pakistan will get the USD 400 million by June 30, The News daily quoted its sources as saying.
As a result, the budget deficit will cross 7.5 percent of the GDP, including liabilities of Rs 391 billion on account of the power and commodities sector, the sources said.
The government`s financing requirement will touch Rs 1,545 billion even if all tax and non-tax targets are met in accordance with revised projections.
Rana Asas Amin, the Special Advisor to the Finance Division, said the projected budget deficit of 5.5 percent of the GDP (excluding Rs 391 billion on account of liabilities of the power and other sector) would be impacted by 0.2 percent if the reimbursement is not received from the US.