ISLAMABAD: Pakistan’s budget deficit touched 3.2 percent of gross domestic product between start of July 2017 and mid-February 2018, officials revealed Tuesday.
These figures are better compared to same period of last financial year when budget deficit touched 3.9 percent of gross domestic product (GDP), reported The News.
But the budget deficit was well above the 2.2 percent of GDP reported during July-December of FY 2017-18.
Experts said Pakistan recorded a budget deficit of Rs1,110 billion for first 7.5 months of FY 2017-18, but the fiscal challenges are bound to get tougher before elections to be held later on this year.
According to economists, the eight-month fiscal deficit remains under control considering it stood at 3.9 percent for first nine months of last FY 2016-17.
The incumbent government was able to restrict the budget deficit at 2.2 percent of GDP during first half of FY 2017-18 and recorded a 1 percent increase till mid-February.
But economists have expressed concerns budget deficit could skyrocket to 6 percent of GDP, almost double of what it was currently by end of June, when the financial year ends.
Senior officials at the Finance Ministry revealed International Monetary Fund (IMF) and Pakistan had reached a consensus over budget deficit breaching 5 percent of GDP during present financial year 2017-18, against forecasted target of 4.1 percent.
During last financial year, the budget deficit had spiked up to 5.8 percent of GDP, with the provinces and federal govt trading blows over these massive slippages.
But an economist said, both sides were equally responsible for their spending spree without doing proper homework.
The centre last year had blamed the provinces for overspending billion of rupees, which contributed to the budget deficit to swell by end of June last year.
This is in spite the fact federating units had provided assurances to generate revenue surplus by one percent to help in reduce the fiscal deficit.
On the contrary, the provinces had unleashed a spending spree which caused the budget deficit to swell to 5.8 percent of GDP in last FY 2016-18, said an official dealing with financial matters in Islamabad.
In their defence, provinces stated the centre didn’t update about actual revenue collection figures of Federal Board of Revenue and were updated regarding that tax collection target had been missed by a huge margin at year end.
