ANI
23 Jan 2023, 03:27 GMT+10
Islamabad [Pakistan], January 22 (ANI): Interest expenses in Pakistan have increased to Pakistani Rupees (PKR) 2.57 trillion in the first half of this fiscal year, amounting to 65 per cent of the annual debt servicing budget, and is forcing the Pakistan government to reduce its other expenses, except those on defence, The Express Tribune reported.
The development comes amid the government's reluctance to opt for debt restructuring.
With a net income of PKR 2.5 trillion, Pakistan's total spending on debt servicing and defence reached over PKR 3.2 trillion more than the government's net income, which indicates that Pakistan will remain debt trapped as the tax collection has increased, however, the expenses have not been reduced, The Express Tribune reported.
In comparison to a massive expenditure of PKR 3.2 trillion on debt servicing and defence, only PKR 147 billion was spent on development, the report said, adding that the expenditure on development is 49 per cent less in comparison to the previous fiscal year.
Citing sources in the Ministry of Finance, the news report said there was an alarming rise of 77 per cent in the cost of interest on the federal government debt stock during the July-December period of the current fiscal year.
The new provisional details have suggested that there has been a cumulative reduction of 15 per cent in all other non-development expenditures, excluding defence due to the precarious situation. The development expenses were reduced by 50 per cent for other expenses, The Express Tribune reported citing government sources.
Pakistan's Finance Ministry has given about PKR 2.57 trillion in interest costs, which shows a rise of PKR 1.1 trillion or 77 per cent, The Tribune reported citing sources.
During the current fiscal year, the government had budgeted PKR 3.95 trillion for interest expenses but 65 per cent of it has been used in just six months, it added.
Amid the high cost of debt servicing, the Monetary Policy Committee of the central bank is also due to hold a meeting on Monday to review the possibility of further increasing its interest rate to control inflation and attract foreign inflows.
Earlier this month, Pakistan's Finance Minister Ishaq Dar said the cost of debt servicing could rise to about PKR 5 trillion in this fiscal year, which amounts to over half of this year's total budget of PKR 9.6 trillion. Citing sources, the news report said Pakistan spent PKR 638 billion on defence in six months, excluding military pensions and expenditure on the armed forces development programme. The annual budget is PKR 1.563 trillion and the six-month expenditure is as per the allocation.
In the current fiscal year, the government's total expenditure increased to nearly PKR 4.7 trillion. However, the current expenditure of the government increased to more than PKR 4.5 trillion, as per the news report.
Provisional figures reveal that the federal budget deficit reached around PKR 2.2 trillion in the first six months of the current fiscal year, The Express Tribune reported citing sources.
The federal budget deficit, the gap between expenses and revenues, amounted to 2.5 per cent of the GDP, it added. (ANI)
Get a daily dose of Australian Herald news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Australian Herald.
More InformationMANILA, Philippines: After a Filipina domestic worker was killed and dumped in the desert in the oil-rich emirate of Kuwait, ...
LONG BEACH, California: Long Beach, California-based Rocket Lab has launched its first mission from the United States, as part of ...
Israel was behind Sunday morning's drone strike on an Iranian munitions facility; the Wall Street Journal has reported, citing American ...
LONDON, England: Of the 14 main battle tanks and additional artillery support it will send to Ukraine, Britain hopes its ...
LONDON, England: Insurance broker Aon has estimated that natural disasters caused global economic losses worth $313 billion in 2022.It added ...
NEW YORK CITY, New York: After being convicted of stealing more than $900,000 from the company, Rosita Joseph, former executive ...
One of Australia's leading climate scientists, Professor Will Steffen, died on Sunday. Steffen has been hailed as a leading climate ...
Canberra [Australia], January 31 (ANI): The Australia India Institute on Tuesday announced a new Australia-India Defence Programme which will be ...
Lahore [Pakistan], January 31 (ANI): Mickey Arthur and the (Pakistan Cricket Board) PCB are nearing an agreement that will see ...
New Delhi [India], January 31 (ANI): Australia's High Commissioner to India Barry O' Farrell AO on Tuesday said that he ...
© Provided by Xinhua ADELAIDE, Australia, Jan. 31 (Xinhua) -- The "China Today" arts week is being held in Adelaide, ...
Rishikesh (Uttarakhand) [India], January 31 (ANI): Ahead of India's Test series against Australia, cricketer Virat Kohli and his wife Anushka ...