Pakistan’s Fiscal deficits fell to 2.9 per cent of GDP in the first seven months of FY21, compared with 3.2 per cent in the same period last year, mainly due to a sharp increase in net federal revenue and efficient expenditure management.

The primary balance in July-January 2020-21 showed a surplus of Rs 416 billion (0.9%) over Rs 153 billion (0.3% of GDP). during the same period FY20 and shows visible improvement.

On the other hand, oil prices and international food prices have risen steadily over the last four months. During the period February – April 2020, global commodity prices fell and during this period the consumer price index actually fell.

This small base effect may Increase inflation in the short run . However, government measures to ensure the security of supply, particularly with the Ramzan package, will ease inflationary pressures. For the next month, it is expected to remain in the range of 7.9% to 9.5%.

Eight months performance indicates that it will remain on track and the current fiscal year would end up meeting the set target

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