December 04, 2024 15:28 (IST)
Follow us:
facebook-white sharing button
twitter-white sharing button
instagram-white sharing button
youtube-white sharing button
Devendra Fadnavis picked as BJP legislative party head, set to be Maharashtra CM | Rahul Gandhi, Priyanka Gandhi Vadra's visit to violence-hit Sambhal thwarted | Man tries to shoot Shiromani Akali Dal leader Sukhbir Singh Badal at entrance of Golden Temple, arrested | Joe Biden announces $1 billion humanitarian assistance for 31 African countries during his visit to Angola | South Korean president lifts martial law order hours after imposing it
One-third of Pakistan's budget is consumed by interest payments
Pakistan Budget
Image: Wikipedia Creative Commons

One-third of Pakistan's budget is consumed by interest payments

| @indiablooms | 25 Jun 2021, 11:11 pm

Islamabad: Pakistan's fiscal condition seems to be in trouble as it was revealed recently that interest payments consume one-third of the country's budget.

Finance Minister Shaukat Tareen in the National Assembly on June 12 announced the fiscal 2021 federal budget of 8.48 trillion rupees ($54 billion).

Interest payments on debt, which are expected to grow by 3.9% from the ongoing fiscal year, account for 3.06 trillion rupees, or 36% of budget expenditures. In contrast, the government is only spending 600 billion rupees on subsidies and 100 billion rupees for COVID-19 vaccinations and emergencies, reports Nikkei Asia.

Pakistan is also witnessing devastating COVID-19 pandemic waves which have hit not only the health but also the financial conditions of people.

The budget also reveals a deficit of 3.99 trillion rupees. The federal government plans to borrow 3.74 trillion rupees to finance this deficit, which makes up 94% of the deficit, reports Nikkei Asia.

Hasaan Khawar, a public policy analyst based in Islamabad, told the newspaper that Pakistan borrows heavily not only to finance current expenditures but also to service existing debt.

"Pakistan is having a primary fiscal deficit. That's why the [International Monetary Fund] has been demanding a primary budget surplus so that it starts reducing debt."

Khawar, who is also the team leader of the Sustainable Energy and Economic Development Program for Khyber Pakhtunkhwa Province, told Nikkei Asia that borrowing can only be sustainable if the interest rate is lower than the return on investment, a strategy that would help the economy to grow.

He said that over the last couple of years, development spending has been reduced to meet fiscal targets set up by the IMF, which has hindered projects that directly affect people's welfare.

Support Our Journalism

We cannot do without you.. your contribution supports unbiased journalism

IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.

Support objective journalism for a small contribution.
Related Images
Xi Jinping, Putin in Russia 22 Mar 2023, 02:56 pm
Related Videos