Pakistan isn’t just going through political turmoil but economic turbulence as well. For the first time in history, the central government will register a Rs4.3 trillion budget deficit this fiscal, the finance ministry has said. That’s 8 per cent of the country’s GDP. The deficit—Rs 318 billion higher than the target set by the government in June last year—is being bridged by taking more domestic and international loans. According to the ministry, the increase in expenditure is expected due to rising interest payments, Covid-19 related spending, energy subsidies, social safety net expenditures and running of civil government. Inflation is expected to be around 8-9 per cent in the medium term: The currency is doing badly. Earlier this week, it slumped to a record low: Rs 178.61 against the dollar.
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