ISLAMABAD: The government that once took pride in ensuring fiscal discipline is now on a path of compromising Pakistan’s macroeconomic stability as it has booked a record high budget deficit of Rs1.481 trillion for nine months of the current fiscal year, which is even higher than the annual target.
The overall budget deficit – the gap between income and expenditure – widened to 4.3% of gross domestic product (GDP) or Rs1.481 trillion in Jul-Mar 2017-18, according to the Ministry of Finance that released a consolidated summary of federal and provincial budgetary operations on Monday.
In absolute terms, it was the highest-ever budget deficit that Pakistan recorded for Jul-Mar in any fiscal year. In terms of total size of national economy, the 4.3% deficit was the highest in five years and even higher than the 4.1% annual target that former finance minister Ishaq Dar had set in June last year.
It seemed that the Ministry of Finance did not exercise control over expenses and kept sanctioning expenditure requests without having the fiscal framework in mind. One reason for such a lax control was the posting of inexperienced bureaucrats in the ministry.
The Rs1.481-trillion budget deficit came despite the fact that four provinces of the country showed a cash surplus of Rs174 billion in the first nine months. Excluding provincial savings, the federal budget deficit would have jumped to Rs1.65 trillion.
