ISLAMABAD: Owing to consolidated measures implemented by the government, the fiscal deficit has been curtailed to 0.8 percent of GDP during the first four months of the current fiscal year, according to latest report of the finance ministry. “Fiscal side highlights the successful implementation of consolidation measures in the first four months of FY2024, leading to a significant rise in total revenue receipts that outpaced the growth in expenditures,” according to Monthly Economic Update and Outlook for December 2023.
Consequently, the fiscal deficit has been curtailed to 0.8 percent of GDP, the report says, adding the primary surplus continued to improve owing to contained growth in non-markup spending and was recorded at Rs.1429.7 billion (1.4 percent of GDP) during July-October FY2024 from Rs.136.2 billion, 0.2 percent of GDP last year.
The breakup data shows that the fiscal deficit was recorded at Rs.861.7 billion during the period under review compared to deficit of Rs.1265.8 billion during the same period of last year, which was 1.5 percent of GDP.
Meanwhile, the net federal revenue receipts increased to Rs.2806.6 billion in July-October FY2024 from Rs.1316.8 billion last year. The sharp rise in revenues has been largely attributed to considerable improvement in non-tax revenues that grew by more than 300 percent during the period under review. In absolute terms, it increased to Rs. 1586.5 billion against Rs. 346.4 billion last year.
This growth in non-tax collection has been observed across all major heads, indicating a broad-based increase. Similarly, receipts from FBR tax collections grew by 29 percent to Rs.2748.4 billion against Rs.2138.7 billion last year. The net provisional FBR tax collection maintained its momentum with 29.6 percent growth to reach Rs.3484.7 billion during July-November FY2024 from Rs.2688.4 billion last year. Within total, domestic tax revenues grew by 32 percent driven primarily by a 62.8 percent surge in FED and a 42.2 percent rise in direct taxes.
The total expenditures grew by 35 percent to stand at Rs.3706.7 billion during July-October FY2024 against Rs.2737.2 billion last year. Within total, current spending grew by 44 percent mainly due to a significant rise in markup payments that increased by 63 percent during the first four months of the current fiscal year, while non-markup spending witnessed a restricted growth of 19 percent on account of the government’s cautious expenditure management strategy.
