Pakistan plans 91.8% coverage of federal deficit via domestic sources in FY2025

June 13, 2024 (MLN): Pakistan’s government plans to cover 91.8% of its federal deficit during the upcoming fiscal year (July-June FY2025) through domestic markets, as extracted from the Budget brief document published yesterday.

The government has proposed a fiscal deficit of Rs8.5 trillion, compared to the revised deficit figure of Rs8.39tr for the outgoing fiscal year (FY24).

The estimated figures for FY25 come after the government set a target of Rs10.377tr for federal revenue and total federal expenditure of Rs18.877tr, creating a gap of Rs8.5tr for FY25.

The government expects to raise Rs7.803tr of this gap through domestic sources.

This involves Rs7.683tr to be raised through government securities including Treasury Bills (T-bills), Pakistan Investment Bonds (PIBs) and Ijara Sukuk, while the remaining is proposed to be filled through National Saving Schemes and other deposits.

This would cover around 92% of the proposed fiscal deficit for the upcoming fiscal year.

Apart from that, the government expects Rs666bn net to be raised from external sources.

This involves borrowing by issuing Commercial & Euro Bond worth Rs676bn, while Rs10bn of Multilateral & Bilateral Sources would be retired in FY25.

Meanwhile, the budget document shows the government expects Rs30bn from privatization proceeds that will fill the remaining amount of the federal deficit.

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