The IMF has also projected that Pakistan's total revenues will be 12.5% of GDP, and total expenditures will be 20.1% of GDP. This means that the government will spend Rs300 billion more than it earns.
The IMF has also revised its forecast for Pakistan's gross public debt, which is now expected to remain at 72.2% of GDP by the end of the current fiscal year. This is 1.3% of GDP higher than the previous forecast.
The IMF's projections are based on the assumption that Pakistan will continue to implement the reforms agreed under the $3 billion Standby Arrangement. However, if Pakistan fails to implement these reforms, the budget deficit could be even higher.
The IMF's projections are also based on the assumption that the global economy will continue to recover from the COVID-19 pandemic. However, if the global economy weakens, Pakistan's budget deficit could also be higher.
The IMF's projections are a wake-up call for the Pakistani government. The government needs to take urgent steps to increase revenues and reduce expenditures. If it fails to do so, the budget deficit will continue to grow, and Pakistan will become increasingly dependent on foreign lenders.
