Pakistan’s fiscal balance in the first nine months of the financial year 2022-23 (9MFY23) posted a deficit of Rs. 3,079 billion, 20 percent YoY higher than the prior year’s deficit, according to Arif Habib Limited (AHL).
In terms of percent GDP, the deficit arrived at 3.7 percent in 9MFY23 compared to 3.8 percent recorded last year’s corresponding period. However, the primary balance during 9MFY23 posted a surplus of Rs. 504 billion (0.6 percent of GDP) compared to a deficit balance in the primary account of Rs. 447 billion witnessed in the same period last year (-0.7 percent of GDP).
Primarily, total revenue growth of 18 percent in 9MFY23 to Rs. 6.9 trillion (9MFY22: Rs. 5.9 trillion) aided the fiscal balance, translating to 8.2 percent of GDP vs. 8.8 percent in the same period last year. The total tax revenue collection was up by 17 percent YoY to Rs. 5.6 trillion. FBR taxes clocked in at Rs. 5.16 trillion during the period, 18 percent YoY higher than 9MFY22’s collection of Rs. 4.38 trillion.
Growth in indirect taxes posted a meager growth of 1 percent YoY during 9MFY23 from last year’s Rs. 2.8 trillion. This was mainly on the back of a 2 percent YoY growth in sales tax, clocking in at Rs. 1.9 trillion, and a 3 percent YoY decline in Customs Duty to Rs. 701 billion.
On the other hand, direct taxes jumped +46 percent YoY to Rs. 2.3 trillion mainly contributes to the overall revenue collection. Albeit, the government collected Rs. 1.3 trillion in non-tax revenues, displaying a jump of 25 percent YoY. This was particularly owed to the higher collection of Petroleum Levy of Rs. 362 billion, marking an increase of 189 percent YoY. Moreover, dividend collection also improved by 43 percent YoY to Rs. 52 billion.
In addition, total expenditure went up by 19 percent YoY to Rs. 10 trillion (11.9 percent of GDP vs. 12.6 percent of GDP in 9MFY22). Further breakup revealed that current expenditure underwent an uptick of 25 percent YoY of which defense rose by 13 percent YoY. However, markup payments marked a growth of 69 percent YoY to Rs. 3.6 trillion. Moreover, development expenditure and net lending undertaken by the government decreased by 36 percent YoY to Rs. 1,060 billion.
Total PSDP expenditure in 9MFY23 arrived at Rs. 1,014 billion (-2 percent YoY) with provincial expenditure at Rs. 721 billion (-0.4 percent YoY), outdoing federal disbursement of Rs. 293 billion (-5 percent YoY).
Source: Pro Pakistani