ISLAMABAD - The PTI government has said that Pakistan’s budget deficit has increased above one trillion rupees due to the higher interest payment and increased security needs.

“The slight increase in fiscal deficit for the first half of FY19 is a reflection of higher interest payments on loans taken out by previous governments and increased security needs,” said Minister of State for Revenue Hammad Azhar on his social media account. He further said that revenues have been slower than expected due to the unnecessary concessions doled out by the PML-N govt in its last budget (net -100 billion). Revenues also are lower as the PTI govt has protected the pass through of the higher oil prices to the consumers during first half.

“Also, the Supreme Court stayed the collection on pre-paid mobiles and the ban on no filers purchase of vehicles/properties also dented revenues. The corrective measures taken by the PTI government have started to kick in from Dec 18,” he concluded.

Pakistan’s budget deficit was recorded at one trillion rupees during first half (July to December) of the current fiscal year. The country’s expenditures stood at Rs3.36 trillion as against the revenues of Rs2.33 trillion during the first half (July to December) of the ongoing fiscal (FY2019) year. The budget deficit was recorded at Rs1.03 trillion (2.7 percent of the GDP), according to the latest data of ministry of finance. The government is struggling to restrict the budget deficit despite introducing two mini budgets in last six months.

The government had revised upwards the target of the budget deficit to 6.3 percent of the GDP (Rs2.39 trillion) for the ongoing fiscal year as against the target of 5.1 percent of the GDP.

The government had spent Rs876.7 billion on paying domestic and foreign debt servicing. The break-up of interest payment showed that Rs752.098 billion was spent on domestic debt and Rs124.6 billion of the foreign debt. The government had allocated Rs1.6 trillion for interest payment for the entire current fiscal year. However, the amount could surge due to the sharp rupee depreciation. Dollar value had touched historic level of Rs135 last month. Meanwhile, an amount of Rs479.6 billion was spent on defence budget.