ISLAMABAD: Finance Ministry has projected that fiscal deficit could soar to Rs 9.655 trillion in upcoming fiscal year, while it has projected boost in economic growth and significant reduction in inflation.

According to Ministry's medium-term macroeconomic framework, Gross Domestic Product is expected to grow by 4.8 percent during this period, while inflation is anticipated to decrease from 12 percent to 7.5 percent. Federal Board of Revenue is estimated to increase its tax revenue to Rs 15.555 trillion, while non-tax revenue is expected to reach Rs 3.851 trillion. After experiencing slight contraction in FY2023, Pakistan's economy witnessed signs of recovery during initial months of FY2024 with 2.7 percent growth in Q1. Additionally, government plans to collect Rs 1.388 trillion from petroleum levies. Finance Ministry has estimated that fiscal deficit could reach Rs 9.655 trillion in next fiscal year, with concerns that interest payments on debt could exceed Rs 10 trillion, totalling Rs 10.283 trillion. Furthermore, report anticipates exports to rise to $ 37.95 billion and remittances to reach $ 31.70 billion during fiscal year 2025-26. Pension bill is projected to increase to Rs 1.166 trillion, with civil administration expenses reaching Rs 881 billion. Defence spending is expected to climb to Rs 2.337 trillion, while Rs 1.480 trillion will be allocated for development projects. These projections are part of Finance Ministry's strategic plan to stabilise economy and ensure sustainable growth in medium term.