The PTI government predicts 3% GDP growth in the current fiscal year (FY21) and 4.2 percent growth in the following fiscal year (FY22).
In this reference, the federal cabinet approved a medium-term budget strategy paper on Tuesday, in which the Ministry of Finance (MoF) forecasted inflation at 8.7% for the current fiscal year and 8.5 percent for the following fiscal year, with the budget deficit projected at 7.4% for the current fiscal year and 6% for the following fiscal year.
As per the reports, the government plans to set aside Rs450 billion in the next fiscal year’s budget for subsidies, including circular debt and dues to IPPs. The IMF, on the other hand, forecasts Rs459 billion in current-year subsidies and Rs530 billion in FY22.
According to sources, the MoF also suggested an Rs6000 billion Federal Board of Revenue (FBR) target, which is Rs1272 billion higher than the current fiscal year’s revised target. The revenue from non-tax sources is estimated to reach Rs1900 billion. For FY22, the Ministry of Finance proposes a budget planning paper of Rs720 billion for the Public Sector Development Programme (PSDP). In its fifth assessment of Pakistan’s economy, the IMF forecasted a federal PSDP of Rs503 billion for the current fiscal year and Rs627 billion for the following fiscal year.