The post-September 2001 events, tension on border with India throughout the second half of 2001-02, terrorist attacks in Karachi and other cities, and general uncertainty undermined investor confidence. As a result, lower interest rates failed to stimulate domestic private investment. Total private investment, in real terms, in 2001-02 was only marginally higher than the previous year.
The fiscal balance worsened in 2001-02, with the consolidated budgetary deficit increasing to 7.1 per cent of GDP from 5.2 per cent in 2000-01. However, after adjusting for one-time expenditures, the budget deficit in the last financial year was 5.7 per cent of GDP.
Consolidated expenditure of federal and provincial governments increased by 20 per cent, mainly due to some one-time expenditures, mobilization of troops on border with India, and higher development expenditure. Revenues, on the other hand, increased by only 12 per cent, mainly on account of large increases in non-tax revenues and surcharges on petroleum. Tax receipts increased by only 2 per cent.
The fiscal balance worsened in 2001-02, with the consolidated budgetary deficit increasing to 7.1 per cent of GDP from 5.2 per cent in 2000-01. However, after adjusting for one-time expenditures, the budget deficit in the last financial year was 5.7 per cent of GDP.
Consolidated expenditure of federal and provincial governments increased by 20 per cent, mainly due to some one-time expenditures, mobilization of troops on border with India, and higher development expenditure. Revenues, on the other hand, increased by only 12 per cent, mainly on account of large increases in non-tax revenues and surcharges on petroleum. Tax receipts increased by only 2 per cent.