Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and
influence a nation's economy. It is the sister strategy to monetary policy through which a central bank
influences a nation's money supply
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Fiscal policy is a government's decisions regarding spending and taxing. If a government wants to stimulate
growth in the economy, it will increase spending for goods and services. This will increase demand for goods
and services. ... A decrease in government spending will decrease overall demand in the economy.
How is fiscal policy used to close gaps?
The recessionary gap can be closed with expansionary fiscal policy -- an increase in government purchases, a
decrease in taxes, or an increase in transfer payments. This policy shifts the aggregate demand curve to the
right and closes the gap.
Pakistan gdp growth rate for 2016 was 5.53%, a 0.8% increase from 2015. Pakistan gdp growth rate for 2015
was 4.73%, a 0.06% increase from 2014.
...
Pakistan GDP Growth Rate 1961-2020.
Pakistan GDP Growth Rate - Historical Data
Year
GDP Growth (%)
2017
5.70% 0.17%
2016
5.53% 0.80%
2015
4.73% 0.06%
Annual Change
GNI (formerly GNP) is the sum of value added by all resident producers plus any product taxes (less
subsidies) not included in the valuation of output plus net receipts of primary income (compensation of
employees and property income) from abroad. Data are in current U.S. dollars. GNI, calculated in national
currency, is usually converted to U.S. dollars at official exchange rates for comparisons across economies,
although an alternative rate is used when the official exchange rate is judged to diverge by an exceptionally
large margin from the rate actually applied in international transactions. To smooth fluctuations in prices
and exchange rates, a special Atlas method of conversion is used by the World Bank. This applies a
conversion factor that averages the exchange rate for a given year and the two preceding years, adjusted
for differences in rates of inflation between the country, and through 2000, the G-5 countries (France,
Germany, Japan, the United Kingdom, and the United States). From 2001, these countries include the Euro
area, Japan, the United Kingdom, and the United States.
U.S. gnp for 2018 was $20,562.62B, a 6.9% increase from 2017.
U.S. gnp for 2017 was $19,235.36B, a 4.14% increase from 2016.
U.S. gnp for 2016 was $18,471.48B, a 1.56% increase from 2015.
U.S. gnp for 2015 was $18,187.66B, a 2.29% increase from 2014.
le-1:Fiscal Indicators (as percentage of GDP)
Years Real GDP
Growth
Fiscal
deficit
Expenditure Revenue
Total Current Development Total Tax Non-Tax
1992 7.6 7.5 26.7 19.1 7.6 19.2 13.7 5.5
1993 2.1 8.1 26.2 20.5 5.7 18.1 13.4 4.7
1994 4.4 5.9 23.4 18.8 4.6 17.5 13.4 4.1
1995 5.1 5.6 22.9 18.5 4.4 17.3 13.8 3.5
1996 6.6 6.5 24.4 20.0 4.4 17.9 14.4 3.5
1997 1.7 6.4 22.3 18.8 3.5 15.8 13.4 2.4
1998 3.5 7.7 23.7 19.8 3.9 16.0 13.2 2.8
1999 4.2 6.1 21.9 18.6 3.3 16.0 13.3 2.7
2000 3.9 5.4 18.9 16.4 2.5 13.4 10.6 2.8
2001 2.0 4.3 17.4 15.3 2.1 13.1 10.5 2.6
2002 3.1 5.5 19.6 16.2 3.4 14.2 10.7 3.5
2003 4.7 3.6 18.4 16.0 2.4 14.8 11.4 3.4
2004 7.5 2.3 16.4 13.8 2.6 14.1 10.8 3.3
2005 9.0 3.3 17.2 14.5 2.7 13.8 10.1 3.7
2006 5.8 4.0 17.1 12.6 4.5 13.1 9.8 3.3
2007 5.5 4.1 19.5 14.9 4.6 14.0 9.6 4.4
2008 5.0 7.3 21.4 17.4 4.0 14.1 9.9 4.2
2009 0.4 5.2 19.2 15.5 3.5 14.0 9.1 4.9
2010 2.6 6.2 20.2 16.0 4.4 14.0 9.9 4.1
2011 3.6 6.5 18.9 15.9 2.8 12.3 9.3 3.0
2012 3.8 8.8 21.6 17.3 3.9 12.8 10.2 2.6
2013 3.7 8.2 21.5 16.4 5.1 13.3 9.8 3.5
2014 4.0 5.5 20.0 15.9 4.9 14.5 10.2 4.3
2015 4.1 5.3 19.6 16.1 4.2 14.3 11.0 3.3
2016 4.5 4.6 19.9 16.1 4.5 15.3 12.6 2.7
2017 5.3 5.8 21.3 16.3 5.3 15.5 12.5 3.0
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Current expenditures are estimated at ₨. 3.937 tn and the allocation for Public Sector Development
Programme (PSDP) for 2014–15 is ₨. 525 billion. The fiscal deficit is kept 4.9% in 2014–15 and total foreign
loans Pakistan expects to receive is ₨.
...
Fiscal Policy Statement 2017-18
1
1. Introduction
1.1 Government inherited a fragile economy in 2013 characterized by low investments,
high inflation, low GDP growth, high fiscal deficit, low Tax to GDP, low level of
foreign exchange reserves and a looming external debt default with rising power
sector circular debt and severe energy crisis. Government soon after assuming
responsibilities launched a home grown program of economic reforms and over the
period of four years achieved remarkable economic turnaround which is recognized
by international community as well. GDP growth of 5.3 percent in 2016-17 is the
highest in last ten years. Fiscal deficit was reduced from 8.2 percent in 2012-13 to
5.8 percent in 2016-17 while Pakistan’s real economic growth continued to
accelerate amid supportive domestic and external environment.
1.2 Key drivers of growth included strong consumption, growth in credit to private
sector, low interest rate environment, contained inflation, a robust services sector,
recovery in agriculture along with stable exchange rate. In addition, foreign direct
investment increased by 4.6 percent during 2016-17 as a result of ongoing CPEC
projects and other large investments. On the other side, the current account deficit
widened due to increase in imports of machinery, industrial raw material and
petroleum products. These imports are expected to enhance productive capacity of
the economy towards higher output and exports in future. Supported by the factors
mentioned above, strong growth and improved prospects are considered as key
factors that led international credit rating agencies like Standard’s & Poor’s,
Moody’s and Fitch to improve Pakistan's ratings while maintaining country's
economic outlook as ‘stable’.
1.3 Fiscal deficit was 5.8 percent of GDP in 2016-17 compared with 4.6 percent in
2015-16. The revised fiscal deficit target was set at 4.2 percent of GDP for 2016-17
mainly on back of i) estimated provincial surplus of around Rs.290 billion and ii)
Federal Board of Revenue (FBR) achieving its revised target of Rs.3,521 billion.
However, provinces posted a deficit of Rs.15.9 billion (missing target by around 1
percent GDP) and FBR revenue collection also fell short of target by around 0.5
percent of GDP
Fiscal Policy Statement 2018-19
1
1.0 Introduction
1.1 Pakistan’s economy experienced mixed performance during 2017-18. The pace of
revenue growth slowed down compared to expenditure along with increased
dependence on imports to meet growing domestic demand which led to widening
of twin deficits. In fact, imports remained almost 2.3 times of exports. The resulting
record current account deficit increased pressures on foreign exchange reserves
and exchange rate. At the same time, fiscal deficit was the highest during last five
years to stand at 6.6 percent of GDP. This high level of fiscal deficit was financed
mainly by borrowing from the banking system, which not only led to a faster
accumulation in public debt, but also stoked inflation. However, the real economic
activity gained momentum to register a growth of 5.8 percent while inflation
remained at 4.5 percent.
1.2 The real GDP growth came from three major sectors; agriculture, industry and
services. The agriculture sector, in particular, performed well on the back of record
contribution from crops and livestock subsectors. Besides higher agriculture
production, buoyant manufacturing and construction activities, sustained by
improved energy supply, development projects and strong domestic demand
played a key role in pushing up industrial sector growth. The services sector also
registered growth on back of wholesale/retail trade and general government
services subsectors. Private sector credit grew and investment inched up in terms
of GDP. Yet the growth in household and public consumption was faster.
1.3 The present government, soon after assuming office, has devised a multipronged
strategy to control twin deficits by focusing on broadening the tax base instead of
increasing burden on current tax payers as well as enhancing foreign exchange
earnings of the country. At the same time, reduction in unnecessary expenditures
and curtailment of losses in public sector enterprises are also being pursued to
bring down the fiscal deficit, which is the main cause of higher levels of borrowing
and resultant indebtedness. In order to curtail imports, the government has also
made adjustments in exchange and interest rate by levying additional regulatory
duties on non-essential imports.