ISLAMABAD: Pakistan recorded its first negative primary balance of FY24 during the quarter that ended on March 31, 2024 (3Q FY24), which amounted to a deficit of Rs. 197 billion.
However, if calculating all three quarters (9 months of FY24), the country’s economy witnessed a primary surplus amounting to Rs. 1.6 trillion, equivalent to 1.5 percent of the country’s GDP.
In addition, according to media reports Pakistan achieved a revenue collection of Rs. 6.7 trillion for the FBR revenue collection, in line with the target set by the incumbent government.
It is worth noting here that, among other conditions, last November, the International Monetary Fund (IMF) requested Pakistan to take its primary deficit into a surplus.
Fiscal deficit
During 9MFY24, Pakistan witnessed a fiscal deficit of Rs. 3.9 trillion, showing a 27 percent Year on Year (y-o-y) increase over the corresponding period in the previous year. In terms of the GDP percentage, the deficit closed at 3.7 percent during this period, against 3.6 percent recorded in 9 months of in the previous years.
A primary deficit usually indicates the variance between the fiscal deficit and the interest payment of the previous year. It shows how much a government needs to borrow for purposes other than interest payments. High deficits show the inability to manage the economy by a government.
