The budget deficit is estimated to reach the highest level of 62 trillion rupees

ISLAMABAD: Despite an additional burden of 735 billion rupees on the people during the current financial year, the budget deficit has been estimated to reach the highest level of 6.22 trillion or 62 trillion 20 billion rupees in the country's history.

The revision of the budget deficit has been done in the light of the negotiations with the IMF, which also revealed the understatement of the budget expenditure figures. With the revised budget deficit at 7.4 percent of GDP, debt restructuring remains the only viable option.

When presenting the budget in June last year, the budget deficit was estimated at 45 trillion rupees, which has now been increased by 17 trillion or 37%. This is Rs 690 billion more than the deficit reported to the IMF in December.

Earlier, the government was reluctant to share the exact figures of the worst deficit with the IMF, but the IMF agreed to agree on the monetary framework on condition that it was informed of the figures closer to reality. 6.22 trillion budget deficit can only be met by further borrowing, which is a difficult task.

According to the new statistics, the approved budget of 96 trillion rupees in June has reached 112 trillion rupees, in which a 17 percent increase in record expenditure is expected.

The main reason for the increase in the budget deficit is the extraordinary expenditure of 52 trillion rupees on debt repayment, which is 12 and a half trillion rupees or 32% more than the original budget. Besides, subsidies estimated at Rs 699 billion in June are now expected to increase by 68 percent to Rs 12 trillion.

During the last financial year, the budget deficit was 55 trillion rupees. The federal government has also reduced the provincial surplus from 750 billion rupees to 559 billion rupees.