Fiscal deficit hits 3.6% of GDP

ISLAMABAD—Pakistan’s fiscal deficit leveled 3.6 per cent of the GDP during the six months of the current financial year.
According to the ministry of finance, difference between income and expenditure i-e fiscal deficit crossed Rs.356 billion during July-December whereas during the same period in the previous financial year, the imbalance between income and expenditure was Rs.168 billion. Thus, the fiscal deficit doubled within one year.
As per analysts, one reason of increase in government expenditure is the subsidy given on petrol and diesel. Besides, the previous government also provided a subsidy of eight billion rupees on supply of consumer items at cheaper rates. Second main reason is also the maturity of various instruments under the National Savings Scheme.
The analysts said that the government has made payments of Rs.35-40 billions on the account of maturity of investment instruments for various periods, and interest rates fixed on them. The government obtained loans of Rs.288 billion from local resources and Rs.68 billion from foreign resources to finance fiscal deficit. According to statistics, the government’s gross income crossed Rs.625 billion while expenditure crossed Rs.981 billion in six months. Revenue from taxes remained Rs.450 billion while the non-tax revenue was over Rs.174 billion.
Out of Rs.775 billion of current expenditure, Rs.237 billion were paid on account of the loans and interest fixed on them whereas defence expenditure was over Rs.131 billion. During this period, development expenditure and net lending were Rs.225 billion.
The government has allocated the target of fiscal deficit equivalent to four per cent of the GDP for the current financial year but the statistics of the six months show that the fiscal deficit will be more than the official target.

—Online