More than half of Pakistan’s total budget would go into interest payments, Finance Minister Muhammad Aurangzeb said on Wednesday while presenting the Fiscal Year 2024-25 budget with a total outlay of Rs18.9 trillion.
Rs9,775 billion would go to interest payments, he said when he presented the important points of the annual budget. The budget deficit has been projected at 6.9 per cent of the gross domestic product.
Pakistan’s public debt, both domestic and foreign, has soared to Rs67,525 billion in the fiscal year, up Rs4,644 in the last fiscal year, according to the Pakistan Economic Survey report.
The reason for such an increase was the federal primary deficit (surplus) and interest on the debt.
Pakistan’s public debt surged by Rs67.5 trillion as of the end of March compared to the previous year as the country looked for avenues to support its economy.
On Tuesday, Aurangzeb said that repayment would not be a big issue for the next fiscal year.
“I do see some of the commercial bank borrowing coming in,” the finance minister said in response to a query at the press conference.
One of the graphs in the report showed that the total per cent of public debt to GDP stood at 75%.
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Debt sustainability depends upon four key ingredients: primary balances, real growth, real interest rates, and debt levels, said the International Monetary Fund in a March 28 blog.
“Public debt as a fraction of gross domestic product has increased significantly in recent decades, across advanced as well as emerging and middle-income economies. It is expected to reach 120 per cent and 80 per cent of output respectively by 2028,” it said.
Following is the breakup of resources and expenditures:
Total expenditure: Rs18,877 billion
Tax revenue (FBR) – Federal Consolidated Fund: Rs12,970 billion
Non-Tax Revenue: Rs4,845 billion
a) Gross Revenue Receipts: Rs17,815 billion
b) Less Provincial Share: Rs7,438 billion
I.Net Revenue Receipts (a-b): Rs10,377 billion
II. Non-Bank Borrowing (NSSs & Others) – Public Account: Rs2,662 billion
III. Net External Receipts – Fed. Consolidated Fund: Rs666 billion
VI. Bank Borrowing (T-Bills, PIBs, Sukuk) – Fed. Consolidated Fund: Rs5,142 billion
V. Privatisation Proceeds – Fed. Consolidated Fund: Rs30 billion
Total (II+III+IV+V): 8,500
Current: Rs17,203 billion
Interest Payments: Rs9,775 billion
Pension: Rs1,014 billion
Defence Affairs & Services: Rs2,122 billion
Grants and Transfers to Provinces & Others: Rs1,777 billion
Subsidies: Rs1,363 billion
Running of Civil Govt: Rs839 billion
Provision for Emergency and others: Rs313 billion
Development: Rs1,674 billion
Federal PSDP: Rs1,400 billion
Net Lending: Rs274 billion
