ISLAMABAD: The federal government’s expenditure exceeded Rs8,200 billion in the first six months of the current fiscal year, significantly outpacing its net income of Rs5,887 billion
According to a report released by the Ministry of Finance on Saturday, the shortfall has resulted in a budget deficit of Rs2,313 billion.
The report highlights that a substantial portion of the expenditure—Rs5,141 billion—was allocated to interest payments on loans, whereas federal development projects received only Rs164 billion.
Additionally, defense spending stood at Rs466 billion during the same period.
Meanwhile, the Federal Board of Revenue (FBR) faced a shortfall of Rs384 billion in tax revenue, collecting Rs5,625 billion against the target of Rs6,000 billion.
The much-anticipated Trader-Friendly Scheme also fell short of its target, collecting Rs23.4 billion in taxes. Non-tax revenue between July and December amounted to Rs3,602 billion.
According to the report, the federal government transferred Rs3,339 billion to provinces from its total revenue. To bridge the fiscal gap, new loans amounting to Rs 2,313 billion were acquired.
IMF’s conditions met
Despite the deficit, Pakistan has met several key conditions set by the International Monetary Fund (IMF). The primary budget surplus reached Rs 3,600 billion, surpassing the IMF-mandated target of Rs 2,900 billion.
Additionally, the four provinces collectively posted a surplus of Rs776 billion, exceeding the target of Rs750 billion. Provincial tax collections also stood at Rs442 billion, surpassing the revenue target of Rs376 billion.
The Ministry of Finance further reported that the government collected over Rs549 billion from the public in the form of a petroleum levy in the first half of the fiscal year.
An IMF delegation is expected to visit Pakistan next month to review the government’s economic performance for the first six months. The visit will also facilitate negotiations for the release of the next tranche of $1 billion under the $7 billion bailout programme.
