Budget deficit increases to Rs8.54tr

The interim government has made major revisions to this fiscal year’s budget, significantly increasing the federal budget deficit to a new record high of Rs8.54 trillion but cutting the external loans estimates by over $6 billion due to the non-materialisation of Eurobonds and foreign commercial loans. On Tuesday, the Ministry of Finance released its new Annual Borrowing Plan, detailing the revised estimates of Pakistan’s growing gross financing needs for bridging the budget deficit and debt repayments. The new report reveals that, compared to the Rs7.5 trillion federal budget deficit target approved by the last National Assembly, the Ministry of Finance has projected a record Rs8.54 trillion deficit for fiscal year 2023-24. This revised estimate is Rs1.03 trillion or 14% higher than the budgeted target and is equal to 8% of the size of the economy—a level considered highly unsustainable and already burdened by debt.