The fiscal position calls into question the IMF’s claims of economic stability

Islamabad: Pakistan’s fiscal position questions the IMF’s claims of economic stability The budget deficit has been Rs 4.33 trillion during July-March, which is a quarter more than the deficit of the previous fiscal year. , which has questioned the IMF’s claims of the stability of Pakistan’s fiscal position.

In the documents released by the Finance Ministry on Tuesday, covering the economic situation from July to March, it is said that Pakistan has successfully completed the IMF programme.

The IMF’s deputy managing director said on Monday that the primary surplus of 1.8% in the first half shows that Pakistan’s fiscal position is strengthening and that it will achieve the target of 0.4% primary surplus by the end of this year. While the primary surplus has been higher than the IMF’s benchmark, the fiscal position is still weak due to high interest rates, which has lauded the energy policy of repeated price hikes and called for its continuation. About 60 percent are sucking up the budget.

During 9 months, the government has spent 5.52 billion rupees in interest payments, which is 205 billion rupees more than the net income of the same period, and 1.94 billion rupees more than the same period last year. The main reason is that the IMF has prevented the central bank from reducing the interest rate, the high interest rate has also failed to prevent inflation, 4.8 thousand billion rupees of interest was paid on internal loans during nine months. Is.

The IMF has estimated inflation at 24.8% which shows that the high interest rate has failed to achieve the objective. Overall, the federal government managed to show a primary budget surplus of Rs 1.2 trillion on IMF terms. However, the primary budget surplus does not include interest payments which have now exceeded gross income, with interest payments the budget deficit during the 9 months has been 4.1 of GDP (4.33 billion rupees), which is 23% (Rs 803 billion) more than the same period last year, this time the government has resorted to debt to meet all the needs including defense expenditure.

Defense expenditure was 1.22 thousand billion rupees, which is 22% more than last year, a total of 6.74 thousand billion rupees were spent on defense and interest payments, which is 1.4 thousand billion rupees more than the net income of the federation. During 9 months, 38% increase was recorded in the expenditure of the federal government, while the ongoing expenditure increased by 40%, the government has given 473 billion rupees in the form of subsidy, 612 billion rupees were spent in the form of pension, while the development expenditure A downward trend was seen in the amount of Rs. 322 billion with a decrease of Rs. 7 billion compared to the same period last year.

Despite these disappointing figures, the government has managed to show some good performance, the non-tax revenue has increased by 95% (Rs 2.4 thousand billion) due to receipt of petroleum levy, 719 billion rupees due to petroleum levy. Cumulatively, the central bank’s profit stood at Rs 972 billion, while tax collections by the FBR stood at Rs 6.7 thousand billion, an increase of 30 percent.