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Fiscal Deficit Forecast
The finance ministry has projected a substantial increase in Pakistan’s fiscal deficit, estimating it could reach Rs9.655 trillion in the upcoming fiscal year. This projection reflects ongoing concerns about managing public finances amid rising debt obligations.
Economic Growth and Inflation
Despite the deficit projection, the finance ministry anticipates economic growth to rise by 4.8% during the fiscal year. Inflation is expected to decrease significantly from 12% to 7.5%, providing some relief to consumers and businesses.
Revenue Expectations
The Federal Board of Revenue (FBR) is projected to increase its tax revenue to Rs15.555 trillion. Non-tax revenue is expected to reach Rs3.851 trillion. Additionally, the government plans to generate Rs1.388 trillion from petroleum levies.
Economic Recovery and Debt Concerns
After a slight contraction in FY2023, Pakistan’s economy showed signs of recovery with a 2.7% growth in the first quarter of FY2024. However, there are concerns about rising debt, with interest payments on debt expected to exceed Rs10 trillion, totaling Rs10.283 trillion.
Trade and Remittances
Exports are projected to rise to $37.95 billion, and remittances are expected to reach $31.70 billion during the fiscal year 2025-26. These factors are anticipated to support economic stability and growth.
Government Spending
- Pension Bill: Projected to increase to Rs1.166 trillion.
- Civil Administration Expenses: Expected to reach Rs881 billion.
- Defence Spending: Anticipated to climb to Rs2.337 trillion.
- Development Projects: Allocation of Rs1.480 trillion planned.
Strategic Plan
The projections are part of the Finance Ministry’s strategic plan aimed at stabilizing the economy and ensuring sustainable growth in the medium term.
