Economy

PTI fails to bring financial stability

Pakistan’s fiscal deficit reaches 6-year high level

Islamabad, February 20, 2019: Pakistan Thereek e Insaf (PTI) government failed to bring fiscal stability as Pakistan’s fiscal deficit continued to move upward side and reached 6-year high level end of second quarter of this fiscal year (FY19)۔

According to Ministry of Finance fiscal deficit data, Pakistan’s fiscal deficit for the second quarter of this fiscal year is surged to 1.3 percent up from 1 percent in the same period of previous year.

In addition, fiscal deficit in the first half of FY19 widened to 2.7 percent  of GDP compared to 2.2 percent in first half of FY18.

The statistics revealed that Pakistan’s total expenditures were Rs 3.35 trillion as against revenue of Rs 2.32 trillion, depicting a budget deficit of over one trillion rupees in first half of current fiscal year.

Samiullah Tariq, director research at Arif Habib has said Pakistan’s fiscal deficit is gradually widening because of higher defense spending and continued debt servicing. While, on the revenue side overall collection is on decline, he added.

Despite global hike in the petroleum prices, the federal government has decided to keep the prices low in the domestic market, of which revenue collection is lower than expectations, he mentioned.

 It may be mentioned here that rising fiscal deficit has compelled the government to borrow from the State Bank of Pakistan and commercial banks to meet its financing requirements. The federal government last Wednesday borrowed Rs 2 trillion through auction of short-term government papers.

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