Budget deficit touches 2.3pc of GDP

ISLAMABAD – Pakistan budget deficit has touched 2.3 percent of the GDP during first half (July-December) of the ongoing financial year.

“Budget deficit has recorded at around 2.3 percent of the GDP, which is equal to Rs830 billion,” said an official of the Ministry of Finance on Monday.

He said that government has controlled the deficit at 2.3 percent of the GDP due to the improvement in the tax collection of the Federal Board of Revenue. He was optimistic to restrict the deficit at below 5 percent during ongoing financial year 2017-18 (before June). The FBR remains on track to achieve annual collection target of Rs4013 billion. The tax collection has recorded healthy growth due to the increased in Regulatory Duty on the imported commodities and rupee depreciation against US dollar. Around 5 percent rupee deprecation against US dollar has also increased the tax collection at imported commodities.

The deficit would be higher than the target set by the government in the budget for the current fiscal year. The government had set budget deficit target at Rs1.48 trillion (4.1 percent of the GDP) for the ongoing financial year 2017-18.

However, the International Monetary Fund (IMF) had estimated the deficit at around 5 percent of the GDP against the government’s target of 4.1 percent of the GDP.

The country budget deficit, a gap between expenditures and revenues, had recorded at 5.8 percent of the GDP during last fiscal year (FY2017) as against the target of 3.8 percent of the GDP.

The country’s expenditures were recorded at Rs6.8 trillion (21.3 percent of the GDP) as compared to revenues of Rs4.9 trillion (15.5 percent of the GDP), taking the deficit to Rs1.9 trillion, according to the documents of the Ministry of Finance.

However, the FBR’s tax collection during ongoing fiscal year is on the track, which could control the deficit at around 5 percent of the GDP.

During first seven months of the current financial year, Federal Board of Revenue has recorded provisional net revenue collection of over Rs2 trillion as against Rs1699 billion collected during the same period of the previous fiscal year, recording an increase of more than Rs300 billion.

The FBR’s tax collection has shown growth of over 17 percent during seven months of the current fiscal year.

During January, 2018, Federal Board of Revenue yet again replicates its robust performance by surpassing Rs2trillion mark in the first seven months of the current fiscal year.

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