Pakistan’s fiscal deficit shrinks in FY24

May 01, 2024 (MLN): Pakistan's fiscal deficit narrowed to 6.8% of gross domestic product in the fiscal year 2023-2024, as compared to 7.7% of GDP last year, as per data reported by Finance Ministry.

However, in Rupee terms, the fiscal gap widened to Rs7.21 trillion as against Rs6.52tr last year.

The country recorded a primary surplus of Rs952.92 billion or 0.9% of GDP in FY24 as against a primary deficit of Rs825.53bn or 1.0% of GDP in FY23.

The government plugged the fiscal deficit through domestic borrowing of Rs6.89tr, while the remaining amount of Rs320.7bn was borrowed externally.

In the previous year, the government aided the budget deficit entirely through domestic borrowing worth Rs7.2tr. Additionally, it paid off the excess Rs679.85bn worth external loans.

On the revenue front, the government reported a total revenue of Rs13.27tr (12.5% of GDP) as against Rs9.63tr (11.4% of GDP) in FY23.

The tax revenue contributed around Rs10.1tr (9.5% of the total revenue) while the remainder of Rs3.18tr was through non-tax revenue.

Within the overall tax collection, the majority of it came from direct taxes which stood at Rs4.53tr, another Rs3.1tr came from sales tax, Rs1.1tr from customs, and Rs577.45bn through Federal Excise Duties. 

Moreover, under the non-tax revenue head, the major chunk was contributed by petroleum levy worth Rs1.02tr. That compares with just Rs579.91bn generated last year.

This was followed by surplus profit of the State Bank of Pakistan worth Rs972.18bn as compared to Rs371.19bn in last year.

On the expenditure front, the government spent a total of Rs20.48tr (19.3% of GDP) as compared to Rs16.15tr (19.1% of GDP) in the same period of last year.

Of the total expenditure, nearly 90.7% (Rs18.57tr) was done to manage current expenditures, which mainly included mark-up payments (Rs8.16tr), defence (Rs1.86tr), and pension (Rs807.8bn).

To note, government data showed that all four provinces recorded a budget surplus, with Sindh, Baluchistan, Punjab, and KPK's overall balance clocking in at Rs137.57bn, Rs112.26bn, Rs212.16bn, and Rs56.24bn, respectively.

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