ISLAMABAD: The government has funded approximately 77 percent of the federal fiscal deficit through domestic sources, according to the Finance Ministry.
The mid-year review report for fiscal year 2023-24 from the Finance Ministry provides a comparison of the budgeted and actual revenues, expenditures, and financing for the first half of the fiscal year.
During this period, interest expenses totaled around Rs4.2 trillion, with 88 percent of this amount attributed to domestic debt interest.
Fiscal Deficit for 9MFY24 Reaches Rs3.902 Trillion
The federal government’s expenditures increased by 58 percent in the first half of the current fiscal year, reaching Rs6,710 billion compared to Rs4,247.7 billion in the same period last fiscal year, primarily due to rising mark-up payments. The report notes that fiscal and other data are subject to reconciliation at the end of the financial year.
As of the end of December 2023, the composition of domestic debt was 60 percent Pakistan Investment Bonds (PIBs), 20 percent Treasury Bills (T-Bills), 10 percent Ijara Sukuk, and 10 percent National Savings Schemes (NSS) and others. External debt was composed of 53 percent multilateral, 31 percent bilateral, 9 percent government Eurobonds, and 7 percent commercial and others.
The report indicates subdued flows in NSS. The government retired short-term T-Bills amounting to around Rs1 trillion, with gross issuance of fixed-rate PIBs at Rs840 billion against maturities of Rs1.2 trillion, and gross issuance of floating-rate PIBs at Rs5 trillion against repayments of Rs2 trillion.
Additionally, gross issuance of government Ijara Sukuk reached Rs1.3 trillion with no maturities, and Rs30 billion was successfully raised from the first-ever one-year fixed-rate Ijara Sukuk auction on the PSX, with 90 percent participation from the non-banking sector.
The mid-year report also notes external budgetary disbursements of US$ 5.4 billion, with US$ 2.2 billion from multilaterals, US$ 2.7 billion from bilaterals, and US$ 0.5 billion from Naya Pakistan Certificates. External budgetary repayments were US$ 3.3 billion.
Furthermore, a US$1 billion China SAFE deposit and US$ 3 billion Saudi Arabia deposits were rolled over for one year in July and December 2023, respectively. Additionally, US$ 1.2 billion was received under the IMF Stand-by Arrangement, and US$ 1 billion was received as a UAE deposit for balance of payments support.
