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Pakistan
Fiscal Administration
Government tax and nontax receipts fell far short of total expenditures
in the 1980s and early 1990s. Many economists believe that the
increasing government debt is a growing threat to Pakistan's future
economic growth. The overall deficit, as a percentage of GDP,
was around 5.3 percent in the early 1980s and averaged 7.5 percent
between FY 1984 and FY 1990. It reached 8.8 percent in FY 1991,
but the provisional figure for FY 1992 was 6.5 percent. The FY
1993 budget forecast a deficit of 4.8 percent of GDP, but spending
was higher and revenues lower than anticipated, and provisional
data indicate that the deficit exceeded 9 percent. The continued
gap between government revenues and spending is a major concern
to potential donors of foreign aid, and in 1993 Qureshi's caretaker
government raised taxes and cut spending. In 1994 the Benazir
Bhutto government aimed to reduce the budget deficit to 4.5 percent
of GDP by FY 1996. The government relies on bond sales and on
borrowing from the banking system to finance its deficit. Internal
public debt was estimated at 49.9 percent of GDP in FY 1992. By
contrast, in FY 1981 internal public debt had constituted 20.9
percent of GDP.
Data as of April 1994
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