FY23 ended with 7.7pc deficit, not PDM’s claimed 7pc

The former PDM government left behind a massive fiscal deficit — the difference between income and expenditure — of 7.7 per cent of gross domestic product (GDP) while concluding the fiscal year 2022-23 on June 30, significantly higher than its claim of 7pc, according to official accounts. Fiscal Operations Data, released by the Ministry of Finance on Thursday, put the overall fiscal deficit at Rs6.521 trillion during FY23 (7.7pc of GDP). While passing the current fiscal year (FY24) budget in June, the government had claimed the overall fiscal deficit at Rs5.94tr (7pc of GDP), showing a gap of about Rs580bn. Both documents are available on the ministry’s website. Similarly, the previous government had claimed the primary deficit, defined by gap between income and expenditure other than interest payments, at 0.5pc of GDP, equivalent to Rs421bn in absolute numbers for FY23, but the latest official data showed the primary deficit was as wide as Rs690bn or 0.8pc of GDP. While the provincial governments contributed to the slippage as they did not honour their commitment with the Centre, the federal government itself was responsible for the massive fiscal slippages. The Centre estimated Rs459bn provincial cash surplus while presenting the FY24 budget to contain the fiscal deficit for FY23, but they provided only Rs155bn, leaving a shortfall of about Rs304bn, while the remaining gap of about Rs385bn was on the part of the federal government.