Budget deficit shoots up to Rs1480.929b

ISLAMABAD: Just ahead of an electioneering year, Pakistan’s budget deficit shot up to Rs1480.929 billion or 4.3 percent of GDP for first nine months (July-March) period of current fiscal against 3.9 percent of GDP for same period of last financial year, official data of Finance Ministry shows.

The debt servicing has outpaced defence and development expenditures as this one head has consumed Rs1172.840 billion equivalent to 3.4 percent of GDP during the first nine months of the current fiscal year. The depreciation of rupee against US dollar has pushed up debt servicing in the outgoing fiscal year.

According to fiscal operation for July-March period 2017-18 released on Monday stating that the total fetched revenues stood at Rs3649.981 billion and expenditures Rs5130.910 billion during first nine months indicating the budget deficit went up to Rs1480.929 billion.

Last year, the budget deficit had gone up to 5.8 percent of GDP for fiscal year 2016-17 when it stood at 3.9 percent in first nine months of the previous fiscal year.

Keeping in view trends prevailing on budgetary side, the budget deficit would be crossing 6 percent mark in the outgoing fiscal year at a time when it stood at 4.3 percent of GDP on the basis of first nine months. If the provinces did not generate required revenue surplus on June 30, 2018 to the tune of one percent of GDP then the budget deficit could touch even 7 percent of GDP for outgoing fiscal year 2017-18.

In the wake of yawning budget deficit, it puts pressure on external side of the economy as well because it increases demands of imports. So if the budget deficit crosses 6 percent mark then the chances of approaching the IMF will become further brighter because there will be more pressure on demand side of the economy.

The country’s total revenues stood at Rs3649.981 billion out of which tax revenues fetched Rs3076.227 billion including Rs2796.256 billion and provincial taxes Rs279.971 billion in this period. The non-tax collection fetched Rs573.754 billion in first nine months including Rs 379.54 billion at federal and Rs194.225 at provincial levels.

Total expenditures booked at Rs5130.910 billion in first nine months out of which the current expenditures consumed Rs4075.449 billion in first nine months of the current fiscal year. Among current expenditures, the mark-up became the largest ticket item as it consumed Rs1172.840 billion during the first nine months of the current fiscal year. The defence expenditure in July-March 2017-18 stood at Rs623.839 billion.