PDM govt fails to meet its deficit goal
ISLAMABAD: Pakistan’s federal budget deficit surged to a record Rs6.7 trillion in the most recent fiscal year, well exceeding the goal due to spending on debt repayment and defense requirements that was 59% more than the center’s net income.
In contrast to its net income of Rs4.6 trillion, the federal government spent almost Rs7.4 trillion on debt repayment and defense, a difference of Rs2.76 trillion between only two headings. In addition to missing its budgetary goals, the coalition government did not limit fiscal operations to the level set with the International Monetary Fund (IMF) in February of this year, when it had imposed extra taxes on citizens in an effort to reduce the deficit.
The desired amount was Rs. 4.54 trillion. The coalition administration took numerous actions that were inconsistent with responsible fiscal management during FY23, making it one of the worst years for fiscal operations. In February of this year, the IMF anticipated that the cost of debt payment would be Rs5.57 trillion. The nation paid out Rs3.2 trillion in interest during the fiscal year 2021–2022.
According to preliminary figures compiled by the Ministry of Finance, the federal deficit increased by Rs1.1 trillion, or roughly one-fifth, over the previous year. As a result, the Pakistan Democratic Movement (PDM) administration increased the nation’s debt by Rs18.5 trillion in just 15 months,
The old Shehbaz Sharif government borrowed money for everything it did, including the laptop programs, the construction of bridges, the payment of subsidies and wages, and the support of 85 ministers, advisers, and special assistants. In February of this year, the IMF anticipated that the cost of debt payment would be Rs5.57 trillion. The nation paid out Rs3.2 trillion in interest during the fiscal year 2021–2022, nearly doubling in a single year.
Published in EDP BLOGS on August 18,2023.
