WILL THE BUDGET REDUCE INFLATION and FISCAL DEFICIT‪?‬

Byline: SYED FAZL-E-HAIDER Pakistan's budget for the fiscal year 2010-11, starting from July 1, envisages cutting fiscal deficit to 4 per cent of gross domestic product (GDP), lower inflation, an economic growth target of 4.5 per cent and a 17 per cent increase in its defense spending. The budget is actually aims to consolidate the economic recovery and to achieve fiscal consolidation, as the government has set the fiscal deficit target at 4 per cent for the next fiscal, compared to 5.1 per cent of the GDP the country expects to achieve in the outgoing year. The cash-strapped country could not meet the fiscal deficit target of 4.9 per cent of GDP for the outgoing year 2009/10 due to additional security-related expenditure and delayed funds promised by the donors in Tokyo moot last year.