Pakistan's budget deficit skyrocketed to Rs 2.56 trillion, 4 per cent of the country's Gross Domestic Product (GDP), during the nine months of the current fiscal under the Former Prime Minister Imran Khan-led Pakistan Tehreek-e-Insaf (PTI) government.
This comes as Pakistan is already grappling with a massive rise in foreign debt and its economy is slumping to a catastrophic low.
Pakistan's government has also expressed severe concerns that the overall budget deficit might rise to Rs 5.6 trillion by the end of June 2022. The main reason for this prediction of the increase in the budget deficit is unfunded subsidies, off-book expenditures, the inability of the provinces to generate desired revenue surplus and the Federal Board of Revenue (FBR) expected shortfall and overrun in expenditures mainly because of increased debt servicing.
Pakistan's Ministry of Finance stated that the federal budget deficit ballooned to Rs 3.1 trillion in the first nine months of the current fiscal year, but the provincial contribution of Rs 0.6 trillion revenue surplus curtailed the overall deficit to Rs 2.56 trillion, reported The News International.
The overall budget deficit stood at Rs1.65 trillion or 3.6 per cent of GDP in the same period of the last financial year. With the rebasing of national accounts, Pakistan's GDP size has been estimated at Rs 63.978 trillion for the current fiscal year.
As per the forecast given by Minister for Finance Miftah Ismail, the budget deficit may witness a surge of more than Rs 3 trillion just in the last three months of the current fiscal year.
With the federal government expenditures standing at Rs 5.94 trillion, the only option was to get loans to meet all other expenses, including running of the civil government, payment of salaries, pension, subsidies and other obligations.
While Pakistan's miserable economic condition was shrouded by the political upheaval in the country over the past few months, the newly-elected Shehbaz Sharif government is now staring at an economic catastrophe not seen for decades, said a media report.
Pakistan Finance Minister Miftah Ismail, who earlier served as the Federal Advisor on Finance, Chairman of the Pakistan Board of Investment and as an economist with the International Monetary Fund (IMF), has been put to a great test with too many daunting problems facing the country's economy, reported Islam Khabar.
( With inputs from ANI )
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