Fiscal performance remains satisfactory: Economic Outlook.

ISLAMABAD -- Despite considerable challenges both at domestic and external fronts; the fiscal sector performance remained satisfactory, according to latest report released by the finance ministry here.

'The government has been able to restrict the fiscal deficit in terms of GDP at the same level as last year while the primary balance remained in surplus,' says the monthly Economic Update and Outlook for January 2023.

According to the report, the improvement is largely attributed to government's prudent expenditure management strategy, which resulted in a 3.9 percent decline in federal non-mark-up expenditures on the back of decline in subsidies and grant.

The current policy stance has enabled the government to increase expenditures on vulnerable segments of society through Benazir Income Support Programme (BISP) and poverty alleviation fund.

On the revenue side, despite slowdown in economic activity, tax and non-tax collection have improved.

Particularly, FBR tax collection have maintained its growth trajectory above 18 percent during first seven months of current fiscal year. Encouragingly, domestic tax collection, in particular direct taxes are growing at rapid pace indicating effective implementation of administrative and enforcement measures.

Although risks to domestic resource mobilization efforts persist due to economic activity and growth slowdown. However, continuing efforts to boost tax collection would aid in meeting the full year target. Similarly, recently enacted PKR 170 billion additional taxes may support further improving the tax collection.

The stabilization policy of the government has been successful in improving current account deficit by 67 percent reduction during first seven months of the current fiscal year whereas the non-markup current expenditures are also significantly reduced to contain fiscal deficit.

During the first half of...