First quarter of FY24: Aligned with IMF target, fiscal deficit stands at Rs963bn

ISLAMABAD: Ahead of the upcoming scheduled review talks with the IMF from November 2, Pakistan has shown fiscal deficit of Rs963 billion, equivalent to 0.9 percent of GDP, for the first quarter (July-September) period of the current fiscal year. 

However, the Ministry shows a ballooning statistical discrepancy of Rs193.5 billion, which demonstrated that the government remained unable to reconcile its fiscal accounts. The statistical discrepancy was standing at just Rs78 billion in the same period of the last financial year. It demonstrates that the “statistical discrepancy” ballooned manifold in the first quarter of the ongoing financial year.

The statistical discrepancy of the federal government stood at Rs73 billion while its major chunk was related to the provinces. The provinces showed a statistical discrepancy of Rs120 billion. Punjab’s statistical discrepancy remained the largest as it stood at Rs114.78 billion in the first quarter of the current fiscal year. Sindh’s statistical discrepancy stood at just Rs8 billion in the first three months of the current fiscal year.

To align with the IMF, the government kept the primary deficit in the surplus mode of Rs452 billion or positive 0.4 percent of GDP for the current fiscal year. Against the total net financing needs of Rs962.8 billion to bridge the fiscal deficit, reliance on domestic financing remained larger and stood at Rs0.537 trillion while external net financing at Rs0.425 trillion.

The IMF’s Resident Chief in Pakistan, Esther Perez Ruiz, on Wednesday told The News that an International Monetary Fund team would send a mission to Pakistan starting on November 2 on the first review under the current Stand-By Arrangement (SBA) programme.

The fiscal operation for September period of the current financial year (CFY) 2023-24 shows that the debt servicing outpaced the defence and development spending as it stood at Rs1.379 trillion but the federal Public Sector Development Programme spent just Rs40 billion. The defence spending utilized Rs0.343 trillion.

The government fetched total revenues of Rs2.685 trillion with FBR’s revenue collection of Rs2.04 trillion and Non-Tax Revenue of Rs0.468 trillion in the first quarter of the CFY. The total booked expenditures stood at Rs3.648 trillion out of which the current expenditures were standing at Rs3.1 trillion.

The fiscal deterioration of the federal government shows that the gross revenue receipts of the Centre stood at Rs2.494 trillion out of which the transfer to the provinces under the NFC Award stood at Rs1.08 trillion. The net revenue of the federal government remained at just Rs1.4 trillion. The expenditure of the federal government stood at Rs2.42 trillion, so the budget deficit of the federal government was Rs1.041 trillion. The statistical discrepancy of the federal government stood at Rs73 billion.