ISLAMABAD: During the first 5 months of the current fiscal year, Pakistan's expenditure on debt repayments and principal repayments has increased by 74 percent compared to the same period during the previous fiscal year 2023 due to higher policy rates.
Another emerging challenge on the fiscal front is that the additional revenue generated by the provinces stood at Rs 107.9 billion during the same period as compared to Rs 202.5 billion during the same period of the previous financial year.
The major challenge now is rising interest on repayments due to high policy rates which have increased current expenditure.
However, the government is making all efforts to control interest expenditure which is reflected in the increase in primary surplus during July-November 2024.
The monetary policy committee meeting of the State Bank of Pakistan is scheduled for next week and the high interest rate will be kept unchanged. Difficulties will increase.
In the financial year from July to November 2024, there was a total increase of 43 percent which is 4831 billion rupees, during the last financial year this expenditure was 3367.4 billion rupees.