The document summarizes Pakistan's economic challenges over the past decade, including slow GDP growth, high inflation, rising debt levels, and large fiscal deficits. Per capita debt doubled from 2002-2011. GDP growth was the slowest in Pakistan's history and slower than Sub-Saharan countries. Interest payments are consuming over half of federal revenues, squeezing development expenditures. Budget targets are routinely missed, with cumulative deficits 61% greater than budgeted over the past 4 years. The large fiscal deficits are financed through borrowing from the central bank, commercial banks, the national savings scheme, and external sources.

2. Per capita debt (nominal)
70,000
60,000
50,000 Doubled in this govt.
40,000
30,000
20,000
10,000
0
2002
1990
2005
2008
2007
2003
2004
2006
2009
1995
2010 R
1999
2011 R

3. Inflation (CPI)

4. GDP Growth

5. Investment

6. Stagflation

7. Putting down the perspective
1. Slowest growth period in the history of Pak even lower than Sub
Saharan region
2. India’s Per Capita growth rate of 6% will double its per capita
Income in 12 years & with Pakistan’s 1% per capita growth rate the
income of a Pakistani will double in 70 years
GDP % Change at Constant Price
Pakistan Sub-Saharan Region
6.00
5.00
4.00
3.00
2.00
1.00
0.00
2008 2009 2010 2011 2012(E) 2013(E)
PTI Post Budget Press Briefing

8. Increasing Fiscal Squeeze
Current Expenditure Interest Payments as a % of
Development Expenditure Net Federal Revenues
3,000 65%
60%
2,000
55%
1,000 50%
45%
- 40%
FY09 FY10 FY11 FY12(E) FY09 FY10 FY11 FY12(E)
Fiscal Deficit as a % of GDP
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
FY09 FY10 Post Budget Press Briefing
PTI FY11 FY12(E)

9. Meaningless Budget Exercise
1. The budget exercise is meaningless as Govt always misses
targets by a wide margin
2. The cumulative deficit of the Govt in the last 4 years has been
61% greater than what was budgeted
3. This despite the fact that in the last 4 years Govt reduced its
development expenditure by PKR 450 Bn v/s what was
originally budgeted
PTI Post Budget Press Briefing

10. Budget FY 12 & FY13
PKR Bn
FY12 FY13
Budgeted Estimated Budgeted* Estimated *
Tax Revenues 2,074 2,044 2,481 2,371
FBR Revenues 1,952 1,920 2,332 2,227
Other Taxes 122 124 150 144
Non-Tax Revenue 658 450 552 522
Gross Revenue Receipts 2,732 2,494 3,033 2,893
Less: Provincial Transfers 1,203 1,186 1,421 1,421
Net Revenue Receipts 1,529 1,308 1,612 1,517
Current Expenditure (Not including Foreign
loan repayment) 2,072 2,758 2,387 2,729
Interest Payment 791 833 935 999
Defense 495 495 545 570
Subsidies (current) 166 325 166 360
Others 619 1,105 741 800
Development Expenditure 397 290 350 350
PSDP - Federal 300 240 350 350
PSDP - Total 730 825 800
Less: Provincial Share 430 475 450
Estimated Operational Shortfall - -
Other development expenditure 97 50
Net lending 36 36 50
Total Expenditure (Federal) 2,505 3,048 2,737 3,129
Federal Fiscal Deficit (976) (1,740) (1,125) (1,612)
Provincial cash Balance 125 - 110 -
Consolidated Fiscal Deficit (851) (1,740) (1,015) (1,612)
Source: Budget Documents, MoF, Newspaper and Professional Research Budget
PTI Post Press Briefing

11. Financing the Fiscal Deficit
PKR Bn
2000
1800
90
1600 150
1400
1200
1000 991
800
600
400
550
200
0
FY12
SBP BanksPTI Post Budget Press Briefing
NSS External