Shortfall in tax revenues, circular debt threats to economy: SBP
18 January, 2014
KARACHI: The State Bank of Pakistan on Friday said that a decrease in tax collection and rise in circular debt are threats to bringing stability to the country's economy.
According to the monetary policy document, a risk to the fiscal position is a possible shortfall in tax revenues, recurrence of the energy sector circular debt and delays in the budgeted foreign inflows. Such deviations could lead to increase in borrowings from the banking system, further accumulation of domestic debt and higher inflation.
Earlier, speaking at a news conference on the SBP premises, the State Bank Governor Yaseen Anwar admitted that there was much pressure on the reserves level in November on the back of fast pace of outflows following repayments to the International Monetary Fund.However, the SBP left its key policy rate unchanged at 10 percent on improved inflation outlook for January and February.