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WEEKLY NEWSLETTER
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Pakistan
Index
Government tax and nontax receipts fell far short of
total
expenditures in the 1980s and early 1990s. Many economists
believe that the increasing government debt is a growing
threat
to Pakistan's future economic growth. The overall deficit,
as a
percentage of GDP, was around 5.3 percent in the early
1980s and
averaged 7.5 percent between FY 1984 and FY 1990. It
reached 8.8
percent in FY 1991, but the provisional figure for FY 1992
was
6.5 percent. The FY 1993 budget forecast a deficit of 4.8
percent
of GDP, but spending was higher and revenues lower than
anticipated, and provisional data indicate that the
deficit
exceeded 9 percent. The continued gap between government
revenues
and spending is a major concern to potential donors of
foreign
aid, and in 1993 Qureshi's caretaker government raised
taxes and
cut spending. In 1994 the Benazir Bhutto government aimed
to
reduce the budget deficit to 4.5 percent of GDP by FY
1996. The
government relies on bond sales and on borrowing from the
banking
system to finance its deficit. Internal public debt was
estimated
at 49.9 percent of GDP in FY 1992. By contrast, in FY 1981
internal public debt had constituted 20.9 percent of GDP.
Data as of April 1994
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