In contrast to its earnings of Rs2.5 trillion Pakistan spent Rs3.2 trillion on interest payments, defence and on loans alone.
The government was forced to drastically decrease all expenditures, with the exception of defence, during the first half of the current fiscal year since the cost of loan interest rose to Rs2.57 trillion, which is 65 percent of the yearly budget for debt service.
The interest cost on loans from the federal government has climbed alarmingly by 77 percent over the current fiscal year. The most recent information reveals that all non-development expenditures other than defence have decreased by 15 percent overall as a result of this dire scenario.
The amount spent on development has been cut in half to create way for other expenses, a media report has claimed.
The finance ministry spent over Rs2.57 trillion on interest which was an increase of Rs1.1 trillion or 77 percent. The government allocated Rs3.95 trillion for interest payments for the current fiscal year but in just six months 65 percent of that amount has already been spent.
The finance minister Ishaq Dar stated earlier this month that the amount of loan repayments might rise to almost Rs5 trillion in the current fiscal year or more than half of the total budget for this year which is Rs9.6 trillion.
A total of Rs638 billion was spent on defence over the past six months excluding money for armed forces development programs and retired soldiers’ pensions. This is an increase of Rs118 billion or nearly 23 percent compared with the previous fiscal year. The annual defence budget is Rs1.563 trillion.
More than Rs3.2 trillion was spent overall on debt repayment and defence which is 128 percent of the federal government’s net revenue, according to the report.
Statistics show that just Rs147 billion was spent on development projects compared to large expenditures of Rs3,200 billion on defence and debt payments. The amount spent on development was Rs141 billion or 49 percent less than the prior fiscal year.
The federal government spent Rs1.3 trillion on all other expenses which is Rs225 billion or 15 percent less than in the previous year.
