ISLAMABAD: Pakistan’s financial story, in the first half of FY2024, is one of prudent money management in the face of adversity. See the nation’s budget as a big piggy bank: as a result of ingenious government initiatives, revenue increased by over half. Despite the hurdles, Pakistan showcases economic resilience during a challenging financial journey by ensuring the piggy bank doesn’t run dry.
The data also reveals that spending increased by over half, primarily on “markup payments.” With the first half of the fiscal year coming to an end, there was a change in the combined deficit, and this change revealed a number that is more significant than just a statistic.
A crucial element in Pakistan’s economic narrative involves an intricate interplay among tax generation, controlled expenditure, and the ongoing challenge of maintaining either a fiscal deficit or surplus.
The finance ministry’s Monthly Economic Update and Outlook for January 2024 emphasizes how the government’s prudent policies and aggressive actions were crucial in guiding the economy through difficult seas. These programs brought about a gradual improvement in economic activity and provided a ray of hope despite obstacles.
When the financial tapestry is broken down, total revenues during the first half of FY2024 showed a respectable 46% increase, supported by a 30% improvement in the FBR tax collections and a startling 109% increase in non-tax collections. The jump was attributed to several factors, including increasing markup earnings from various sectors, SBP profits, and petroleum levies. But the situation got more complicated as overall spending rose, showing a noteworthy 45% increase.
This increase presented a special difficulty since it necessitated a careful balancing act between preserving a positive primary surplus and guaranteeing fiscal stability. It was driven by a noteworthy 64% spike in markup payments.
A current account surplus in December served as an example of how external stability appeard as a ray of hope despite these obstacles.
“Total spending surged by 45% to Rs9261.8 billion, with a significant 64% increase in markup payments, contributing to a 41% overall rise in current spending compared to the previous year,” noted Maryam Fatima, Senior Joint Director at the SBP, acknowledging the intricacies revealed in the study.
Fatima’s insights provided a light on the government’s unwavering commitment to managing the ship, emphasizing continued efforts to limit non-markup spending. The second half of FY2024 beckons, promising a narrative that goes beyond numerical data and captures economic resilience and the strategic path forward as Pakistan sits at the crossroads of budgetary problems and successes. –INP
