Pakistan’s fiscal balance in the outgoing first half of FY23 posted a deficit of around Rs. 1.7 trillion, up 23 percent compared to the deficit during the same period of the previous fiscal year.
In terms of percentage of GDP, the deficit arrived at 2 percent in 1HFY23, the same as last year’s corresponding period figure.
However, the primary balance during 1HFY23 posted a surplus of Rs. 890 billion (1.1 percent of GDP) compared to a surplus balance in the primary account of Rs. 81 billion witnessed in the same period last year (0.1 percent of GDP).
Primarily, total revenue growth of 19 percent in 1HFY23 to Rs. 4.7 trillion aided the fiscal balance, translating to 5.6 percent of GDP.
The total tax revenue collection was up by 17 percent YoY to Rs. 3.7 trillion. The Federal Board of Revenue (FBR) taxes clocked in at Rs. 3.4 trillion during the period, 17 percent YoY higher than 1HFY22’s collection of Rs. 2.9 trillion.
Growth in indirect taxes remained flat during 1HFY23 from last year’s Rs 1.9 trillion. This was mainly on the back of flat growth in sales tax clocking in at Rs. 1,272 billion and a 3 percent YoY decline in Customs Duty to Rs. 467 billion.
On the other hand, direct taxes jumped 50 percent YoY to Rs. 1,526 billion mainly contributing to the overall revenue collection. Albeit, the government collected Rs. 967 billion in non-tax revenues, displaying a jump of 26 percent YoY. This was particularly owed to a higher collection of Petroleum Levy of Rs. 177 billion, marking an increase of 154 percent YoY. Moreover, dividend collection also improved by 57 percent YoY to Rs. 41 billion.
On the contrary, the surplus profit of the State Bank of Pakistan (SBP) remained absent amid the amendments to the SBP Act 1956. In addition, total expenditure went up by 20 percent YoY to Rs. 6.4 trillion (7.6 percent of GDP compared to 8 percent of GDP in 1HFY22).
Further breakup revealed that current expenditure underwent an uptick of 30 percent YoY of which defense rose by 23 percent YoY. However, markup payments marked a growth of 77 percent YoY to Rs. 2,573 billion. Moreover, development expenditure and net lending undertaken by the government decreased by 11 percent YoY to Rs. 637 billion.
Total PSDP expenditure in 1HFY23 arrived at Rs. 591 billion (up 5 percent YoY) with provincial expenditure at Rs. 454 billion (up 24% YoY), outdoing federal disbursement of Rs 136 billion ( down 32 percent YoY).
