ISLAMABAD: In contrast to the provisional growth estimate of 0.3% for the previous financial year, which is frighteningly low, Pakistan is hoping to expand at a cautious rate of 3.5% as per the federal budget 2023–24, unveiled by Finance Minister Ishaq Dar on Friday.
“This budget should not be seen as an ‘election budget’ – it should be seen as a ‘responsible budget’,” he said.
In the upcoming fiscal year of 2023-24, the monetary policy is anticipated to face significant challenges as it strives to strike a delicate balance between price stability and economic growth, aligning with the government’s efforts to revive the economy.
The primary challenge will be to maintain an equilibrium between growth and stability, ensuring that monetary policy measures effectively support economic expansion while simultaneously containing inflationary pressures. The average inflation target for the year is set at 21%.
Dar said agriculture is the backbone of the economy and this budget is placing special attention on this sector. He then went on to list some of the special measures taken for the agri sector, primary among which was increasing agri loans from Rs1.8 trillion to Rs2.25 trillion.
The government has budgeted total current expenditure at Rs13,320bn for FY24, which is 53pc higher than last year’s budgeted figure.
Defence expenditure is budgeted at Rs1,804bn, 15.4 per cent higher than last year, making up 1.7pc of GDP.
Interest payments, or debt servicing, budgeted for FY24 have risen a whopping 85pc from last year to Rs7,303bn — accounting for 55pc of total current expenditure — making it the single largest expenditure of the government.
Total revenue budgeted for FY23 stands at Rs12,163bn.
After subtracting provincial transfer of Rs5,276bn, net revenue comes out at Rs6,887bn, which is 36.9pc higher than last year.
Fiscal deficit, or overall budget deficit, which is the difference between the government’s total expenditure and revenue is calculated as:
Gross Revenue at Rs12,163bn (minus) Transfer to Provinces Rs5,276bn (plus) Provincial Surplus Rs650bn (minus) Total Expenditure Rs14,460bn.
For FY23, overall deficit is budgeted at Rs6,923bn, which is 82pc higher than last year’s Rs3,797bn. This year, fiscal deficit is 6.54pc of the GDP. Last year, the deficit was 4.9pc of the GDP.
