ISLAMABD    -   The International Monetary Fund (IMF) has estimated that Pakistan’s budget defi­cit, tax collection and debt would improve in the cur­rent fiscal year.

Pakistan’s budget deficit, difference between the ex­penditures and revenues, is projected at 4.8 percent for the ongoing financial year (FY23) as compared to 7.8 percent in FY22, according to the IMF’s latest report, ‘Fiscal Monitor 2022’. “The FY2022/23 projections for Pakistan are based on infor­mation available as of the end of August 2022 and do not in­clude the impact of the recent 

 floods,” the report stated. The budget deficit is estimated to reduce to 4.1 percent in the next fiscal year. According to the report, the primary budget would remain in surplus of 0.2 percent in FY23, which was in deficit of 3 percent in the pre­vious fiscal year. In the next fiscal year, the primary bud­get would remain in surplus of 0.6 percent. The government revenue to GDP is estimated at 12.1 percent in FY23, which was 12.4 percent in FY22. It would increase to 12.8 per­cent in the next financial year. On the other hand, the expen­ditures to GDP are project­ed to decline 17.2 percent in FY23 from 19.9 percent of the last fiscal year. The IMF has also estimated that the country’s debt would decline in FY23. The government’s gross debt to GDP is project­ed from 77.8 percent in FY22 to 71.1 percent in FY23. Mean­while, it would further decline to 66.0 in the upcoming finan­cial year. Similarly, the gener­al government net debt to the GDP is estimated to reduce to 66.1 percent in FY23 from 71.5 percent in previous year. “Rising inflation and climbing interest rates have supplant­ed more than a decade of mut­ed inflation and low interest rates in many countries. Re­cession concerns are surfac­ing and geopolitical tensions have increased further as Rus­sia’s invasion of Ukraine per­sists (October 2022 World Economic Outlook). Fiscal policy trade-offs are increas­ingly difficult, especially for high-debt countries where re­sponses to the COVID-19 pan­demic exhausted their fiscal space. Households are strug­gling with elevated food and energy prices, raising the risk of social unrest,” the report stated. In 2021 and 2022, the fiscal deficits have fall­en sharply in advanced and emerging market economies but remained larger than prepandemic levels across income groups. The contrac­tion in the average deficit for advanced economies and emerging market economies (excluding China) is notable, reflecting the unwinding of pandemic-related measures amid rising inflation.