Mettis Global News
Mettis Global News
Mettis Global News
Mettis Global News

Trending :

Smaller non-tax collection responsible for enlarged fiscal deficit in FY19

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp

August 28, 2019 (MLN): Pakistan’s budget deficit in fiscal year 2019 peaked to an all-time high since 1970’s as the Ministry of Finance reported the figure at Rs.3.45 trillion or 8.9% of the GDP, which marks an expansion of around 52% from last year’s deficit recorded at Rs.6.6% of GDP or Rs.2.3 billion.

Foundation Securities has pointed out in its latest note on the subject that the 6% decline in total revenue came about as a result of substantial fallout in non-tax collection, supported further by a rising expenditures.

The non-tax collection for the year plummeted by 44% on account of 95% decline in profit from SBP and 59% decline in mark-up from public enterprises.

On the other hand, expenditures grew by 11% on the back of higher interest rates, a 21% rise in current expenditures, and a 39% rise in debt servicing, among others.

What also caught attention this time around was how the government’s deficit was mainly financed by local banks and other institutions, while external financing was curbed by around 47%.

The International Monetary Fund (IMF) has estimated Pakistan’s fiscal deficit at Rs.3.3 trillion or 7.3% of GDP in fiscal year 2020, which intensifies the pressure on FBR to widen their revenues by at least Rs.1.7 trillion to reach Rs.5.5 trillion, as per Insight Securities' estimate.

Copyright Mettis Link News

Posted on: 2019-08-28T14:11:00+05:00