Pakistan’s fiscal deficit narrows to 6.8 per cent of GDP

WEB DESK: In the fiscal year 2023-2024, Pakistan’s fiscal deficit improved slightly to 6.8 per cent of GDP, compared to 7.7 per cent in the previous year, according to the Finance Ministry.

However, the fiscal gap in rupee terms widened, reaching Rs7.21 trillion, up from Rs6.52 trillion the year before.

On a positive note, the country recorded a primary surplus of Rs952.92 billion, or 0.9 per cent of GDP, reversing the primary deficit of Rs825.53 billion, or 1.0 per cent of GDP, from the previous fiscal year.

To manage this deficit, the government borrowed Rs6.89 trillion domestically and Rs320.7 billion externally. This is in contrast to the previous year, when the entire deficit was covered by domestic borrowing of Rs7.2 trillion, and Rs679.85 billion in external loans were repaid.

Revenue and expenditure

On the revenue side, the government reported Rs13.27 trillion in total revenue, or 12.5 per cent of GDP, up from Rs9.63 trillion, or 11.4 per cent of GDP, the previous year. Of this revenue, Rs10.1 trillion came from taxes, while Rs3.18 trillion was from non-tax sources.

Government spending reached Rs20.48 trillion, or 19.3 per cent of GDP, an increase from Rs16.15 trillion, or 19.1 per cent of GDP, the year before.

Of this spending, Rs18.57 trillion, or about 90.7 per cent, went towards current expenditures, including mark-up payments (Rs8.16 trillion), defence (Rs1.86 trillion), and pensions (Rs807.8 billion).

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