November 5, 2020 (MLN): Pakistan’s fiscal deficit during 1QFY21 stood at 1.1 percent of the GDP, compared to the deficit of 0.7 percent of GDP in the same period of FY20.
In terms of Rupees, the country’s total budget deficit during the quarter mentioned above clocked in at Rs 484.32 billion, whereas, in 1QFY20 it stood at Rs 286 billion, depicting a growth of 69% YoY. With that said, the primary surplus during the period recorded at Rs 257.7 billion (0.6% of GDP) which was in line with pre-covid-19 IMF’s target. Whereas, in the corresponding period last year, it stood at Rs 286 billion (0.6% of GDP), marking a decline of 10% YoY.
Province-wise, Punjab and Baluchistan provinces recorded budgetary surplus during 1QFY21, while Sindh and KPK recording budgetary deficits during the period.
According to the data released by Ministry of Finance, government plugged this deficit through domestic borrowing of 333 billion, while external borrowing to plug the deficit amounted to Rs 161.37 billion. Compared to FY20, the government domestic and external borrowings to aid budget deficit were stood at Rs 119.5 billion and Rs 166.49 billion respectively.
As the fiscal deficit is the difference between the expenditures and revenues of the government. During 1QFY21, total revenues and expenditures of the government as percentage of GDP stood at 3.2 percent and 4.3 percent respectively, compared to 3.4 percent and 4 percent last year. while in absolute terms, the revenues amounted to Rs 1.48 trillion and the expenditures to Rs 1.96 trillion.
Tax Revenues declined by 2% YoY to Rs 1.12 trillion during the quarter. Of this, about Rs 1 trillion came from federal revenues and Rs 111.7 billion came from provincial. Moreover, within the tax revenues, Direct Taxes and Sales Tax increased by 2% YoY and 8% YoY, respectively. However, Federal Excise Duty (FED) and Sales Tax on Services dropped by 8% YoY and 11% YoY, respectively. Non-Tax Revenues increased by 3% YoY to Rs 356.3 billion attributed to increase in Petroleum Levy by 110% YoY. That said, Surplus profit from SBP dropped by 43% YoY to Rs 105 billion.
The total expenditure which went up by 11% YoY, further breakup revealed that current expenditure of the government came in at Rs 1.8 trillion compared to Rs 1.58 trillion in 1QFY20 (up by 15% YoY). This included federal expenditure of about Rs 1.25 trillion and provincial expenditure of Rs 559 billion.
Within the current expenditure, government’s Mark-up payments during the quarter were increased to Rs742 billion or 1.6 percent of GDP, compared to Rs 571.6, depicting a jump of 30% YoY. While defense expenses were down by 8%YoY to Rs 224.48 billion (0.5 percent of GDP) compared to Rs 242.63 billion (0.6 percent of GDP).
The total development expenditure and net lending undertaken by the government during the quarter under review was amounted to Rs 215.2 billion, showing a growth of 46% YoY. This encompassed Public sector development expenditure (PSDP) of Rs 160 .54 billion (up by 13% YoY) of which provinces utilized about Rs 89.8 billion, federal utilized Rs 70.74 billion on development schemes and Rs 3.9 billion were spent on Other development expenditures. The net lending stood at Rs 50.74 billion.
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