The federal government’s expenditure exceeded Rs 8,200 billion in the first six months of the current fiscal year, significantly surpassing its net income of Rs 5,887 billion.
According to a report released by the Ministry of Finance on Saturday, the shortfall has resulted in a budget deficit of Rs 2,313 billion.
The report highlights that a substantial portion of the expenditure—Rs 5,141 billion—was allocated to interest payments on loans, while federal development projects received only Rs 164 billion.
Additionally, defense spending stood at Rs 466 billion during the same period.
Meanwhile, the Federal Board of Revenue (FBR) faced a shortfall of Rs 384 billion in tax revenue, collecting Rs 5,625 billion against the target of Rs 6,000 billion.
The much-anticipated Trader-Friendly Scheme also fell short of its target, collecting Rs 23.4 billion in taxes. Non-tax revenue between July and December amounted to Rs 3,602 billion.
According to the report, the federal government transferred Rs 3,339 billion to provinces from its total revenue. To bridge the fiscal gap, new loans amounting to Rs 2,313 billion were acquired.
IMF’s Conditions Met
Despite the deficit, Pakistan has met several key conditions set by the International Monetary Fund (IMF). The primary budget surplus reached Rs 3,600 billion, surpassing the IMF-mandated target of Rs 2,900 billion.
Additionally, the four provinces collectively posted a surplus of Rs 776 billion, exceeding the target of Rs 750 billion. Provincial tax collections also stood at Rs 442 billion, surpassing the revenue target of Rs 376 billion.
The Ministry of Finance further reported that the government collected over Rs 549 billion from the public in the form of a petroleum levy in the first half of the fiscal year.
An IMF delegation is expected to visit Pakistan next month to review the government’s economic performance for the first six months. The visit will also facilitate negotiations for the release of the next tranche of $1 billion under the $7 billion bailout programme.
