ISLAMABAD: During the last two months of the previous government’s tenure, the budget deficit is projected to have widened to around Rs2.1 trillion in eleven months (July-May) of the present financial year 2017-18.
30 percent increase in the budget deficit is said to have been posted during the last two months of the PML-N tenure, reported Express Tribune.
This points to laxity on part of the finance ministry and initial projections of fiscal operations indicate budget deficit during the first 11 months of outgoing FY18 may have increased to Rs2.1 trillion or 6.1 percent of gross domestic product (GDP), finance ministry officials revealed.
The finance ministry officials shared provisional figures had been determined on the basis of State Bank of Pakistan statistics and final information would be ready within the next 10 days.
The budget deficit has surpassed the target of 4.1 percent set by the previous government for FY18, but more worrying was the careless spending done by the PML-N government in its last two months in power (April and May).
The finance ministry officials quoting estimates said during April and May 2018, the budget deficit widened Rs617 billion or 1.8 percent of GDP.
For April, the budget deficit was 1.2 percent of GDP or Rs409 billion, hence the total gap between expenditures and revenues widened to 5.5 percent for July-April FY18.
Former finance minister Dr Miftah Ismail during his budget speech on April 27th had informed parliament the budget deficit for the full financial year 2017-18 would clock at 5.5 percent of GDP or around Rs1.9 trillion.
However, this cap was breached two months before the financial year end and officials stated May’s provisional data suggests the budget deficit further rose by 0.6 percent of GDP or Rs208 billion.
They added, this figure would be finalized by end of next week and disparity of 0.2 percent could transpire.
The provisional projections for July-May of FY18 indicate fiscal position presently is worse than five years ago and this 6.1 percent budget deficit doesn’t include power sectors circular debt which is estimated at over Rs1 trillion.
And due to a 10 percent devaluation of the rupee against the dollar in December 2017 and March 2018, Rs775 billion were added to the public debt.