Islamabad [Pakistan], May 24 (ANI): The Pakistan government may unveil a fiscally expansionary budget of around Rs 14.6 trillion, a 50 per cent increase over this’s year’s approved budget. This comes on account of record-high interest payments, Pakistan based The Express Tribune newspaper reported.
The Express Tribune is a daily English-language newspaper in Pakistan.
Sources told The Express Tribune that for the fiscal year 2023-24, the budget deficit, the gap between expenses and income, is estimated at around 7.4 per cent of the gross domestic product (GDP). This is quite large but is still around 0.7 per cent of GDP less than the revised deficit for the outgoing fiscal year.
Alarmingly, slightly over half of the bloated budget outlay will be earmarked for paying the interest cost.
The sources said that after adding the demanded defence budget by the Ministry of Defence, the federal government may spend around 64 per cent of the budget on debt servicing and defence.
Pakistan Finance Minister Ishaq Dar on Monday took the first presentation on the fiscal year 2023-24 budget, which he wants to present in the National Assembly on June 9.
The federal budget deficit in rupee terms could be Rs 7.8 trillion. If set at that level, the federal deficit will be nearly three-fourths higher than the original deficit target of this fiscal year.
The numbers are subject to changes proposed by the finance minister and the federal cabinet before its presentation to the cabinet.
The federal primary deficit, calculated after paying interest costs, could be 0.3 per cent of the GDP. But it is still better than 0.7 per cent of the GDP primary budget estimated for this fiscal year.
The sources said that the overall primary budget might be shown slightly positive on the back of provincial cash surpluses. The overall budget deficit could be around 6.9 per cent of the GDP or Rs 7.3 trillion, according to The Express Tribune.
Pakistan’s Ministry of Finance suggested an increase in the salaries of employees by 20 per cent. But Dar deferred the matter, saying that the federal cabinet would take the decision. The finance minister also instructed reviewing the proposed allocation of Rs 700 billion for the development spending in the next fiscal year, the sources added.