ISLAMABAD: Owing to prudent policies of the government, the fiscal deficit has been brought down to 1.1 percent of Gross Domestic Product (GDP) during the first four months of Fiscal Year 2021-22 against 1.7 percent deficit during the same period last year, official report said.
In absolute terms the overall fiscal deficit has been reduced to Rs587 billion in the first four months of FY2022 from Rs775 billion recorded in the comparable period of last year, according to monthly Economic Update and Outlook for December.
Similarly, the primary balance posted a surplus of Rs 206 billion in July-October FY2022, compared to Rs 156 billion in the same period last year.
It said the fiscal government’s fiscal consolidation efforts were paying off in terms of improved fiscal accounts. “With prudent expenditure management and an effective revenue mobilization strategy, it is expected that the overall fiscal deficit would remain within the reasonable level,” the report said adding that the Federal Board of Revenue (FBR) tax revenues were performing remarkably well and continued to surpass its revenue target during the first five months of the current fiscal year.
It shows that FBR is well on its way to achieve the assigned target for FY2022, it said adding the growth in net federal revenues outpaced the growth in expenditures.
It said, the fiscal accounts have continued to improve reflecting the government’s commitment to prudent expenditure management and effective revenue mobilization strategy.
Fiscal deficit brought down to 1.1 pc in four months: Report
This is evidenced by the fact that net federal revenue receipts climbed by 17.4 percent to Rs 1205 billion in July-October FY2022, up from Rs1026 billion during the same period last year. A significant rise of 36.7 percent increase in FBR tax and 5.4 percent increase in non-tax collection propelled the growth in government revenues.
Total expenditures, on the other hand, increased by 11.7 percent to Rs 2171 billion in Jul-Oct FY2022, compared to Rs 1943 billion last year. The increase has been witnessed owing to 8.5 percent increase in current expenditures and 55.6 percent growth in PSDP spending.
The report mentioned that various tax reforms were underway to improve the documentation and maximum taxpayer’s facilitation that would further improve the tax collection and support in achieving the target set for the current fiscal year.
The report said that during the first four months of the current fiscal year, the country remained on a higher growth trajectory, accelerating from the growth rate observed in FY2021.
It said, the inflation might ease out in the coming months due to the declining commodity prices in the global market.
In addition, relief may also come from continuous government efforts to soften food prices in the local markets by following appropriate fiscal and monetary policies.
While these developments and policies may keep the monthly price dynamics in ch
