Pakistan Federal Public Expenditure Review - Chapter 1 - Reducing Pakistan’s Persistent Fiscal Deficits

Jul 19, 2026

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The Chapter 1 of the 2023 Pakistan Federal Public Expenditure Review analyzes Pakistan’s persistent fiscal deficits and explains how they affect the economy. It reviews recent macroeconomic developments, Pakistan’s development experience since 2000, and the role of rigid expenditures alongside weak revenue collection. It also examines intergovernmental constraints, fragmented institutions, and non-budgetary shocks. The chapter outlines the report’s objective, structure, and the focus on policy recommendations and federal fiscal savings.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages36

Reading Time1 h 31 min

Preface

Abbreviations

Chapter 1: Pakistan’s Persistent Fiscal Deficits

Introduction

Recent macroeconomic developments and outlook

Pakistan’s development experience since 2000

Persistent budget deficits and their effects on the Pakistan economy

Drivers of Persistent Fiscal Deficits

Objective and Structure of the Report

Annex

References

f Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized PAKISTAN FEDERAL PUBLIC EXPENDITURE REVIEW Chapter 1: Reducing Pakistan’s Persistent Fiscal Deficits 2023 TABLE OF CONTENTS Preface ................................................................................................................ i Abbreviations .................................................................................................... iii Chapter 1: Pakistan’s Persistent Fiscal Deficits .................................................... 1 1.1 Introduction ................................................................................................................... 1 1.2 Recent macroeconomic developments and outlook ....................................................... 1 1.3 Pakistan’s development experience since 2000 .............................................................. 3 1.4 Persistent budget deficits and their effects on the Pakistan economy ............................ 4 1.5 Drivers of Persistent Fiscal Deficits ............................................................................... 10 1.5.1 Rigid expenditures and low revenue collections ....................................................................... 10 1.5.2 A challenging intergovernmental framework ............................................................................ 13 1.5.3 Fragmented Institutions............................................................................................................. 15 1.5.4 Non-budgetary shocks ............................................................................................................... 17 1.6 Objective and Structure of the Report .......................................................................... 19 1.6.1 Chapters of the PER ............................................................................................................ 20 1.6.2 Policy recommendations and federal fiscal savings ........................................................... 22 Annex ............................................................................................................... 25 References ........................................................................................................ 28 List of Figures, Tables and Boxes FIGURES Figure 1.1: Human Development Index (HDI) trend for South Asian countries, 1990-2021 .........................................3 Figure 1.2: Pakistan: Government Budget Balances ......................................................................................................4 Figure 1.3: South Asia: General Government Budget Balances.....................................................................................4 Figure 1.4: Contributions to Real GDP Growth .............................................................................................................. 6 Figure 1.5: Pakistan’s Twin Deficits ............................................................................................................................... 6 Figure 1.6: Pakistan: Public and Publicly Guaranteed Debt........................................................................................... 7 Figure 1.7: South Asia: Public and Publicly Guaranteed Debt .......................................................................................7 Figure 1.8: Fiscal deficit and debt – peer comparison for FY19 .....................................................................................7 Figure 1.9: Government Borrowing from Banks, FY11–21 ............................................................................................ 7 Figure 1.10: Credit to the Private Sector ....................................................................................................................... 8 Figure 1.11: Private investment, selected

FAQs

What is the main focus of Chapter 1 in the 2023 Pakistan Federal Public Expenditure Review?

Chapter 1 focuses on Pakistan’s persistent fiscal deficits, including their effects on the economy and the drivers behind them.

Which factors does the chapter identify as drivers of persistent fiscal deficits?

It highlights rigid expenditures and low revenue collections, challenges in the intergovernmental framework, fragmented institutions, and non-budgetary shocks.

How is the report structured within Chapter 1?

The chapter presents an introduction and macroeconomic context, reviews development experience since 2000, analyzes deficit effects and drivers, and then states the report’s objective and structure along with policy recommendations and federal fiscal savings.

Jul 19, 2026

Upload by Patrick