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2010/11 budget - what to watch for - Printable Version

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2010/11 budget - what to watch for - Lahore_Real_Estate - 05-25-2010 11:47 AM

KARACHI: Pakistan is due to announce its budget for the 2010/11 (July-June) fiscal year on June 5.

Following are details of the budget that have been announced and media reports on its likely contents.

Macroeconomics

-- The government expects gross domestic product (GDP) to grow by 4.5 percent in the 2010/11 fiscal year beginning on July 1, compared with 4.1 percent forecast for the 2009/10 fiscal year.

-- Agriculture growth in the next fiscal year is targeted at 3.8 percent, manufacturing growth at 5.6 percent and service sector growth at 4.7 percent.

-- Inflation for the 2010/11 fiscal year is targeted at 8 percent, compared with the central bank's forecast of between 11 percent and 12 percent for the 2009/10 fiscal year.

-- The government is aiming for a fiscal deficit in the 2010/11 fiscal year of between 4 percent and 4.2 percent of GDP, compared with an earlier forecast of 5.1 percent.

Taxes, Duties And Subsidies

-- The government has decided to eliminate subsidies on power, fertiliser and sugar in the budget for the next fiscal year.

-- The government is expected to announce the replacement of a general sales tax with a 15 percent value-added tax in the budget.

-- The government is expected to impose capital gains tax on the purchase of stocks made on or after July 1.