H1: Fiscal deficit increases to 2.3pc of GDP

KARACHI: Fiscal deficit increased to 2.3 percent of GDP in the first half of FY24 from 2.0 percent in the same period last year.

The increase in deficit, notwithstanding a considerable growth in revenue, was driven by a relatively larger increase in expenditure (in terms of GDP) on account of surge in mark-up payments, the State of Pakistan’s Economy Report for the first half of FY24 released on Tuesday by the State Bank of Pakistan (SBP) said.

Nonetheless, primary balance posted a larger surplus of 1.7 percent of GDP in the first half of FY24 compared to 1.1 percent in the same period of FY23.

The provinces cumulatively contributed 0.3 percent of GDP to consolidated surplus during the first half of FY24, higher than 0.1 percent in the same period last year.

The improvement in primary balance in the first half of FY24 is not only consistent with the budget estimates, but also higher compared to the average of last five comparable periods, the report said. Further, a proportionate increase in total revenue and current expenditure (in terms of GDP) helped contain the revenue deficit at 1.6 percent of GDP in the first half of FY24, same as in the corresponding period in FY23.

Copyright Business Recorder, 2024