Karachi: Despite the government efforts the fiscal deficit is feared to shoot up to 6 per cent of the GDP during the ongoing year.
Experts say that notwithstanding the fact that the government is introducing a variety of measures including flood tax, withdrawal of GST exemptions and expenditure cuts to curtail the rising deficit, the fiscal deficit will overshoot the 5.3 percent of GDP target agreed with the IMF and close in at the 6 percent mark.
Their view is supported by the recent tax collection figures, as April revenue stood at Rs127 billion, which has left the government with an ambitious target of Rs437 billion for the remaining month of the fiscal year.
Economists said that Pakistan’s federal fiscal deficit checked in at 1.6 percent of GDP in 3Q (vs 1.5 percent last year), with the cumulative 9M number climbing to 4.5 percent of GDP.
Although the provincial budget posted a surplus balance of Rs102 billion (vs surplus Rs38 billion last year), the federal figure soared on account of rising current expenditure along with declining non-tax revenue.
Total revenue in the cumulative phase rose 6.6 percent YoY to Rs 1.5 trillion, while expenditure jumped by a much higher 12.3 percent YoY to Rs 2.3 trillion leading the deficit to reach Rs 783 billion.
As far as financing of the deficit was concerned, bulk of it remained skewed towards the domestic sources with Ijara Sukkuk, treasury securities and borrowing from the central bank being the main resources.
Going forward, the experts view the deficit to cross the 5.3 percent target agreed with the IMF and come close to the 6 percent mark, despite the recent fiscal austerity measures taken by the government.
The hike in GST rates along with withdrawal of certain exemptions helped total revenue (tax + non-tax) to augment 6.7 percent YoY and reach Rs1.50 trillion.
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