Government forecasts 4.2% GDP growth for FY22

The revised rate of inflation is at 8.7%, which is significantly higher than the 6.5% target.

Revamping Pakistan's economy in 2020The Pakistan Tehreek-e-Insaf (PTI) government has estimated a 3% GDP growth for the ongoing fiscal year (FY21) and 4.2% GDP growth for the next fiscal year (FY22).  

For FY21, the government expects a GDP growth rate of 2.9%, which is higher than the budgeted 2.1%.

The revised rate of inflation is at 8.7%, which is significantly higher than the 6.5% target.

The government has also revised the budget deficit estimate for the current fiscal year to 7.4% of GDP against the 7.1% budget target.

Meanwhile, the debt-to-GDP ratio has been revised to 86.8% instead of budget 87%.

Pakistan's economic growth prospects showing signs of improvement - Business & Finance - Business Recorder

According to sources, the government has planned to allocate ₨. 450 billion for subsidies in the next fiscal year budget including, circular debt and dues that are to be paid to IPPs.  

On the other hand, the IMF has projected ₨. 459 billion subsidies for the ongoing year and ₨. 530 billion for FY22.

Sources added that the Ministry of Finance (MoF) also proposed a ₨. 6,000 billion Federal Board of Revenue (FBR) target, ₨. 1,272 billion more than the current fiscal year’s revised target.

Non-tax revenue is expected to touch ₨. 1,900 billion.

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The MoF’s budget strategy paper also proposes ₨. 720 billion for the Public Sector Development Programme (PSDP) for FY22.

The IMF, in its fifth review of Pakistan’s economy, projected ₨. 503 billion federal PSDP for the ongoing and Rs627 billion for the next fiscal year.

What are your views on this? Share with us in the comments below.

  • For an emerging market …. a GDP to debt ratio over and above 66% is not healthy. Our ratio has reached almost 87%. It means if we earn Rs 100, then Rs 87 goes to debt and we are only left with Rs 13 to spend.

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