Qudsia Bano

In a positive turn of events, Pakistan’s fiscal deficit significantly contracted to 0.8% of its GDP in the first four months (Jul-Oct) of FY2024, standing at Rs861.7 billion, down from 1.5% of its GDP (Rs1265.8 billion) in the same period last year, reports WealthPK. The primary surplus witnessed a notable improvement, reaching Rs1429.7 billion (1.4% of GDP) compared to Rs136.2 billion (0.2% of GDP) last year, driven by a disciplined approach to non-markup spending. The remarkable increase in net federal revenue receipts to Rs2806.6 billion in Jul-Oct FY2024, compared to Rs1316.8 billion last year, has been a game-changer. Non-tax revenues saw a staggering growth of over 300%, reaching Rs1586.5 billion, indicating a broad-based increase across major categories. Receipts from the FBR tax collections also surged by 29% to Rs2748.4 billion. The net provisional FBR tax collections maintained momentum with a growth of 29.6%, reaching Rs3484.7 billion during Jul-Nov FY2024. Commenting on the fiscal development during a discussion with WealthPK, Dr. Syed M. Abdul Rehman, adviser at Securities and Exchange Commission of Pakistan (SECP), said, "The substantial increase in revenues reflects a commendable fiscal management strategy. It's encouraging to see a diversified growth in non-tax revenues, showcasing a robust economic foundation.

The surge in FBR tax collections, particularly in the Federal Excise Duty (FED) and direct taxes, further indicates a positive trajectory for the fiscal landscape." However, total expenditures also grew by 35%, reaching Rs3706.7 billion during Jul-Oct FY2024, compared to Rs2737.2 billion last year. The bulk of increase came from current spending, which grew by 44%. A significant rise in markup payments, increasing by 63%, contributed to the surge in the current spending. On the other hand, non-markup spending exhibited a more cautious growth of 19%. While the fiscal landscape portrays a positive fiscal health trajectory, experts cautioned that continued vigilance is crucial to sustaining this positive momentum. Dr. Syed M. Abdul Rehman said, "The government's cautious approach to non-markup spending is commendable. Sustaining fiscal discipline and managing current spending will be key to maintaining this positive trend. It's a positive sign for the overall economic outlook, but a balanced and strategic approach is imperative for long-term fiscal sustainability." As the fiscal year progresses, the nation looks forward to a sustained positive fiscal trend, ensuring a robust foundation for economic growth and stability.

Credit: INP-WealthPk