Pakistan: Budget deficit hits record PKR 4.3 tr
Mar 10, 2022
Islamabad [Pakistan], March 11 : The Pakistani budget deficit is Pakistani Rupees (PKR) 4.3 trillion, the highest ever.
The PKR 4.3 trillion budget deficit will be equal to 8 per cent of the Gross Domestic Product (GDP) on the basis of the old base year of the economy. It will stay high though the Pakistani government has squeezed the federal development budget by at least PKR 200 billion.
But the revised GDP base year has not yet been approved by the governing council of Pakistan Bureau of Statistics (PBS), Pakistani newspaper The Express Tribune reported on Thursday.
The gap of PKR 4.3 trillion is being bridged by taking more domestic and international loans.
This year, the Pakistani government has imposed a PKR 360 billion mini-budget and the Federal Board of Revenue (FBR) made windfall gains in tax collection on higher imports and higher inflation, despite all these efforts, the fiscal deficit went PKR 318 billion higher than the target set by the Pakistani government in June last year.
"The increase in current expenditures is expected due to rising interest payments, Covid-19 related spending, energy subsidies, social safety net expenditures and running of civil government," the Ministry of Finance report was quoted as saying by The Express Tribune.
Pakistan's Finance Ministry is planning to adjust the Public Sector Development Programme (PSDP) whose spending remained only slightly above half of the money that the government had authorised for spending in the first half of the current fiscal year.
Total expenditures of the federal government are still shown less than PKR 8.5 trillion, although huge slippages are expected due to the PM's relief package-related spending.
During the first half, the non-tax revenue collection came in at only PKR 715 billion, even lower than the previous fiscal year.
The cabinet was informed that the non-tax revenue collection was equal to only 69 per cent of the half-year estimate due to less collection of a petroleum development levy, gas infrastructure development cess (GIDC) and dividends from government-owned companies, The Express Tribune reported.
