*ISLAMABAD - Yet another claim of the former PML N government led by PM Nawaz Sharif has been exposed.*
*PML Nawaz government had claimed that budget deficit has been brought down to 4.1% but the actual figures revealed that the deficit is around 6.6% of the GDP.*
*The budget deficit in the last fiscal year, the PML-N’s last year in office, was Rs2.26 trillion.*
The statement of revenue and expenditures for the last year revealed that the deficit was 6.6% of the GDP.
Former finance minister Ishaq Dar of the PML-N government, which completed its term on May 31, had set a target of 4.1% of the GDP for fiscal year, which ended on June 30, 2018, but ended up 2.5 percentage points higher. This is the highest budget deficit since 2013 when it reached 8.2% of the GDP.
In its five-year term, the former government increased tax revenue from 9.6% to 13% of the GDP but expenditures during this period also rose from 21% to 21.8% of the GDP.
Being in a deficit means, the country spends more and earns less. Unable to increase its revenue, Pakistan has heavily relied on borrowing, mostly short-term, from both local and foreign institutions to meet its financing needs.
With the country’s national debt touching Rs27 trillion, it is trapped in a cycle where it takes more loans to service the previous debt and is left with little money to spend on development