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Monday 08 July, 2024
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Ishaq Dar, Finance Minister, Unveils Economic Survey for FY23

BY Shahzad Saeed Jun 08, 2023. 07:19 pm

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At a press conference in Islamabad, Finance Minister Ishaq Dar is presenting the Economic Survey for the just-ended fiscal year (FY23).

The country’s gross domestic product (GDP) increased by 0.29 percent in FY23 compared to a target of 5 percent and by 6.1 percent in FY22, according to the finance minister.

Growth Targets Missed:

In FY23, the agriculture sector saw growth of 1.55 percent as opposed to 4.27 percent the previous year. Compared to 6.83 percent in FY22, industry growth was 2.94 percent this year.

While the construction sector experienced negative growth of 5.53% compared to a growth of 1.90% in FY22, the manufacturing sector experienced negative growth of 3.91 compared to a growth of 10.86% in FY22.

The services sector grew by 0.86 percent compared to 6.91 percent in FY22, with 6.93 percent growth in the information & communication sector, 4.46 percent growth in the wholesale & retail trade sector, and 4.73 percent growth in transportation and storage.

Inflation:

The average CPI inflation rate for July through May of the current fiscal year was 29.2 percent, compared to 11.3 percent during the same time last year. The weaker currency, supply disruptions brought on by flood damage, higher food prices globally, and broader tariff reforms for both electricity and fuels are all contributing to inflationary pressures.

Nominal GDP:

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In FY23, the nominal GDP increased by 27.1 percent to Rs. 84,658 billion from Rs. 66,624 billion in the previous year.

Per Capita Income:

The per capita income decreased 11.2 percent to $1,568 in FY23 from $1,765 the previous year as a result of currency depreciation, slower growth, and a growing population.

Fiscal Development:

Comparatively to the same period last year, the fiscal deficit for July through April of FY23 was lower at 4.6 percent of GDP.

In July through April of FY23, the primary balance showed a surplus of Rs. 99.1 billion as opposed to a deficit of Rs. 890.2 billion the previous year, which was caused by a slowdown in the growth of non-markup expenditures.

Comparing July to March of FY23, total revenue increased by 18.1% to Rs. 6,938.2 billion from Rs. 5,874.2 billion in the prior year. The total amount of revenue increased as a result of both tax and non-tax revenue collection.

Despite numerous economic difficulties both domestically and internationally, total tax revenue (federal and provincial) during the period of July through March FY23 increased by 16.5 percent to Rs. 5,617.7 billion from Rs. 4,821.9 billion the previous year. This growth was driven by a significant increase in tax collection by the Federal Board of Revenue (FBR).

Between July and March of FY23, non-tax revenue increased by 25.5% to Rs. 1,320.5 billion.

PSDP expenditures from July through March of this year decreased by 1.8 percent to Rs. 1,014.0 billion from Rs. 1,032.7 billion the previous year.

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When compared to the same period last year, FBR tax collection increased by 16.1% to Rs. 6,210.1 billion (July-May FY23), from Rs. 5,348.2 billion.

Tax Base:

In contrast to the target of 0.7, the finance minister reported that FBR registered over 0.9 million taxpayers in the first nine months of FY23. He claimed that during the current fiscal year, the goal of expanding the tax base had been accomplished.

Credit and Cash:

While the policy rate during July-April FY23 increased by 725 bps to 21 percent, the policy rate during FY22 increased cumulatively by 675 bps from 7.0 percent to 13.75 percent.

From July 1 to May 12, FY23, broad money (M2) increased by 7.3 percent to Rs 2,026.3 billion from Rs 1,512.0 billion (growth of 6.2 percent).

Read more: Pakistani University Students Develop Drone Ambulance for Flood Victims

 

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