Federal Budget 2020-21

Federal Budget 2020-21

Federal budget speech 2020-21 notes that the expected recession due to Covid-19 calls for an expansionary fiscal policy. An expansionary fiscal policy aims for greater public spending, which drives up aggregate demand, generating employment opportunities and economic activity. Having mentioned the need for an expansionary fiscal policy without exposure to unsustainable deficit financing, the federal minister presenting the budget speech went on to present a budget with a stated total federal expenditure of Rs. 7,137 B1 as against the revised budget estimates of Rs. 8345.3 billion incurred in FY 2020. As for sustainable debt financing, this year’s budget entails further debt assumption, as the primary balance is still in the negative.

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