Defence, current expenditures skyrocket.

Byline: Khaleeq Kiani

ISLAMABAD -- The country's defence and current expenditures surged significantly while development spending dropped drastically in the first quarter of the current financial year as consolidated fiscal deficit widened to 1.4 per cent of gross domestic product (GDP).

According to fiscal operations data released by the Ministry of Finance on Friday, the total defence spending during the first three months (July-SeptemAber 2018) rose to 0.6pc of GDP, compared to 0.5pc the same period last year. In absolute terms, the defence expenditure increased by 21pc to Rs219.4bn from Rs181bn in the first three months last year.

The current expenditure in the first quarter increased by 19pc to Rs1.48 trillion, compared to Rs1.24tr the same period last year. As percentage of GDP, current expenditure was up by 3.9pc this year against 3.5pc last year.

Development spending drops drastically in first quarter of current financial year

The Public Sector Development Programme (PSDP), on the other hand, plunged by 35.5pc to Rs106.6bn in the first three months this year against Rs165bn of the comparable period last year. In other words, the PSDP spending was down to 0.3pc of GDP, compared to 0.5pc last year.

Of this, the federal PSDP went down by almost 27pc to just Rs50.87bn this year, compared to Rs69.55bn last year, mainly because of slower pickup in development spending and a ban on disbursements because of political transition.

Provincial PSDP expenditure posted even larger drop of 41.6pc to Rs55.73bn, compared to Rs95.4bn of the first quarter last year. On top of this, the four provinces together posted a rare cash surplus of a record Rs246bn in the first quarter of the current fiscal year, compared to Rs82bn surplus in the same period last year, showing a hefty 200pc cushion to the federal government. This was mainly because of a political transition, resulting in slower than usual spending on development projects.

Even then, the...