KARACHI: The fiscal deficit of the country has increased to record level of 8.9 percent in fiscal year 2018/2019, according to statistics released by the federal finance ministry on Tuesday.
Analysts Topline Securities said that the government had reported fourth quarter of fiscal year 2018/2019 fiscal deficit of 3.9 percent of GDP, taking full year deficit to 8.9 percent of GDP or Rs3.4 trillion as against6.6 percent or Rs2.2 trillion in 2017/2018 which is a record high. Previous high deficit was seen in 2011/2012 at 8.8 percent, they said.
They said that the numbers were different from the revised estimates of 7.2 percent which the government presented in budget 2019/2020.
“The fiscal deficit fell short of the government expectations mainly on the back of lower than expected tax revenue collection by the Federal Board of Revenue (FBR) of Rs3.8 trillion (against revised estimates of Rs4.1 trillion).”
They further said that the interest expense as percentage of tax revenues increase to all time high of 47 percent as against 2017/2018 ratio of 34 percent. Higher interest expenses are due to increase in interest rates coupled with bank borrowings to finance fiscal slippages, they added.
According to the statistics of the finance ministry the total revenue was Rs4.9 trillion in fiscal year 2018/2019 and expenses were increased to Rs8.345 trillion.
The budget deficit was came at Rs3.44 trillion or 8.9 percent of the GDP in fiscal year 2018/2019. The GDP for the fiscal year under review has been calculated at Rs38.559 trillion.