Due to rising recurrent expenses, interest payments on local debt, and higher defense spending, Pakistan’s budget deficit in the first quarter of this fiscal year jumped by 43% to Rs809 billion. In the same period of the previous fiscal year, the budget deficit was 438 billion rupees.
As per official statistics, the government’s total revenue in the first quarter of this financial year was 2.02 trillion rupees, compared to the revenue of 1.81 trillion rupees in the same period of the previous financial year. In the first quarter, the tax revenue stood at 1.78 trillion rupees, which was 1.53 trillion rupees in the same period of the previous financial year. Due to a slowdown in economic activities during the period under review, non-tax revenue stood at Rs 235 billion as against Rs 276 billion in the first quarter of the previous fiscal year.
The government spent 2.83 trillion rupees in total from July to September of 2022, compared to 2.25 trillion rupees over the same time period the year before. The economy of the country is dealing with a budget deficit as well as a balance of payments crisis. According to data, Pakistan’s economy has been engulfed by a twin deficit that has slowed economic development and raised the country’s default risk.
According to economists, the government can more efficiently control domestic debt by bringing illegal commerce and undocumented economies into the purview of the law than by reducing the budget deficit through taxation.
