Islamabad: Pakistan’s federal budget deficit in the first half of the current fiscal year shot up to Rs 1.8 trillion, a 29 percent jump compared to the same period of the previous year, despite a slowdown in development spending and double-digit growth in revenues.
The budget deficit the gap between federal income and expenditures was provisionally recorded at Rs1.8 trillion, or 3.3 percent of Pakistan’s gross domestic product (GDP), for July-December of the ongoing fiscal year, according to Express Tribune.
Pakistan’s annual federal budget deficit target is Rs 4 trillion for the current fiscal year.
Usually, heavy spending is made in the last quarter of every fiscal year. A major reason behind the surge in deficit was the uptick in current expenditures, as the government spent a lower amount under the Public Sector Development Programme to meet a condition of the International Monetary Fund (IMF) loan programme, according to Express Tribune.
Further, provisional fiscal operation figures indicated that the Pakistan government’s strategy to contain the growing public debt by concentrating on increasing revenues may not help in a significant way because most of the Federal Board of Revenue (FBR) taxes were being transferred to the provinces.
Current expenditures were equal to 92 percent of the total federal government expenditures and 40 percent of them were spent only on paying interest on loans. Federal development spending stood at only Rs274 billion in the first half of the current fiscal year, which was higher than the comparative period of the previous year but constituted only 30 percent of the annual budget of Rs 900 billion.
Earlier, the federal primary budget deficit during the first half of the current fiscal year was Rs 402 billion against the surplus of Rs 82 billion during the same period of the previous fiscal year, as per Express Tribune.