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.
The 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%.
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.
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.
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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.