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Budget strategy, Govt projects GDP to grow by 4.2pc

The federal government has prepared budget strategy papers FY 2021-22 to FY 2023-24 projecting the GDP to grow by 4.2 percent for the next fiscal year.

According to the papers, the volume of GDP has been increased from Rs 46,000 billion to Rs 52,000 billion, while inflation is expected to be at 8 percent for next fiscal year and the inflation is expected to ease at 6.8 percent during FY 2022-23.

According to the document, inflation will remain at 6.5 percent during the financial year 2023-24.

“The budget deficit for the next financial year is expected to be 6% of GDP, while the debt deficit for 2021-22 is expected to be 84.3% of GDP,” document revealed.

The medium-term fiscal framework envisages the gradual reduction of the overall fiscal deficit from -7.4% of the GDP during FY 2020-21 to -4.4% in FY 2023-24. This reduction will correspondingly bring down the debt-to-GDP ratio and ensure the sustainability of debt.

In the medium term (FY 2021-22 to FY 2023-24), the focus of fiscal policy will be on: sustainable, inclusive and equitable growth; job creation (1.2 – 1.9 million in medium terms); protection of vulnerable segments of the population; inflation control, and higher development spending. The envisaged economic growth will be driven by a sustained increase in the aggregate supply backed by a strong forex reserves position.

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