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