The federal budget deficit shot up to Rs. 1.4 trillion during the firsthalf of the current fiscal year, clocking in at Rs. 1.4 trillion, which isequivalent to 3.1 percent of the country’s gross domestic product (GDP).

For this fiscal year, the government has set the federal budget deficittarget at Rs. 3.43 trillion or 7.5 percent of GDP.

The center and provinces are set to meet this week under the banner of theNational Finance Commission (NFC), reported Express Tribune.link——————————

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This happened despite a tight control over expenditures. The only main headof expenditure that remained out of control during the July-December periodof the current fiscal year was the debt servicing cost that jumped 15percent to nearly Rs. 1.5 trillion, the newspaper quoted sources in theMinistry of Finance.

The debt servicing cost has been constantly soaring due to increasedborrowing needed to fill the gap between expenditures and revenue.

In the first half of the current FY, the government took loans worth Rs.1.2 trillion to finance the deficit, which it blames on the higher share ofprovinces under the NFC.

The maiden meeting of the NFC would be held in the Q-block on Thursday,chaired by the Finance Minister, Dr. Abdul Hafeez Shaikh, and is likely tobe attended by all provincial finance ministers, the newspaper said.