PAKISTAN

In first year, govt sees record high fiscal deficit: Dawn
August 28, 2019

The first year of the Pakistan Tehreek-i-Insaf (PTI) government concluded with a record 8.9 per cent fiscal deficit — perhaps the highest in the country’s history — as revenues plummeted while expenditures remained at the same level they were at the previous year, when expressed as a percentage of GDP. In absolute terms, however, expenditures broke previous records while revenues were stagnant. As a result, the fiscal deficit, which is the difference between revenues and exp­enditures of the federal government, came in at a record 8.9pc of GDP. As late as June 2019 the government had announced that it intended to keep the deficit at 7.1pc of GDP, whereas its target at the start of the year was set at 4.9pc. Since the country’s GDP is Rs38.6 trillion at current market pri­ces, each percentage point increase in the deficit numbers denotes significant slippage.