Coming to Pakistan, fiscal deficit rose dramatically to 7.6 percent of GDP in financial year (FY) 08 from 4.3 percent of GDP in FY07. During FY09, fiscal deficit was reduced to 5.2 percent of GDP though the budgetary target was 4.3 percent. For FY10, the current fiscal year, the fiscal deficit target is 4.9 percent of GDP. This envisages expenditure-GDP ratio of 19.4 percent (compared with 19.3 percent during FY09) and revenue-GDP ratio of 14.5 percent (compared with 14.1 percent during FY09). The GDP growth target for FY10 as set out in the budget was 3.3 percent. However, as per State Bank of Pakistan (SBP) projections, the economy will grow at 3 percent. It may be mentioned that during 1990s, average fiscal deficit-GDP ratio was 7 percent, well above the current level of around 5 percent. However, decline in fiscal deficit has more to do with fall in expenditure than increase in revenue. During 1990s, average expenditure-GDP ratio was 23.6 percent, while revenue GDP ratio was 16.8 percent, well above the current levels of expenditure (19.3 percent) and revenue (14.1 percent).
(...) Development spending for FY08 (including both federal and provincial) was Rs 452 billion. The FY09 budgetary estimates for development spending were Rs 516.6 billion; however, actual spending was Rs 448.8 billion. For FY10, development spending estimates were Rs 763.1 billion, which were revised to Rs 616 billion and are now projected to be only Rs 510 billion. During the first half of FY10, the actual development spending was Rs 116 billion, which suggests that even Rs 510 billion projections are on the higher side.