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Pakistan defence budget increases by 10%:
Author:
Craig Caffrey, London Section:
Last posted:
2013-06-27
The 2013-14 Federal Budget released by the Pakistan government on 12 June included a 10% increase in funding for its Ministry of Defence (MoD). Expenditure is set to rise to PKR625.3 billion (USD6.7 billion), the equivalent to 2.71% of GDP.
Nevertheless, this year's increase is lower than the 16.6% average annual rises that have occurred since 2008, and continues a trend of declining increases over the past five years. Medium-term estimates released by the Ministry of Finance as part of the 2013-14 budget process suggest that defence will see a further rise of 10.4% in 2014 and 9.9% in 2015, taking spending to PKR760 billion.
However, as a share of GDP defence spending is expected to continue to decline, reaching around 2.65% of GDP in 2015.
Real-term growth in 2013-14 will be limited to around 2.5% as a result of relatively high inflation in the country, while the increases planned for the next two years will see spending increase by a further 5.8%.
Around 70% of the entire budget - or around USD4.6 billion - is currently dedicated to personnel and operating expenses.
However, the 2013-14 budgets is the first time in recent years that the proportion of the budget dedicated to these spending categories has not increased. Personnel costs in particular have seen rapid increases over recent years, rising from 32.1% of outlay in 2008 to 44.1% in 2012 but have remained relatively static in the current budget at 43.4%.
Pakistani government funding will be augmented by direct financial assistance from the US, which, according to the US State Departments Fiscal Year 2013 (FY13) budget request, is expected to provide a further USD350 million in Foreign Military Financing (FMF) and USD800 million in Pakistan Counterinsurgency Capability Program (PCCF) payments. These defence specific budget items will form part of a package of around USD2.4 billion in assistance provided by Washington in FY13.
JDW
Author:
Craig Caffrey, London Section:
Last posted:
2013-06-27
The 2013-14 Federal Budget released by the Pakistan government on 12 June included a 10% increase in funding for its Ministry of Defence (MoD). Expenditure is set to rise to PKR625.3 billion (USD6.7 billion), the equivalent to 2.71% of GDP.
Nevertheless, this year's increase is lower than the 16.6% average annual rises that have occurred since 2008, and continues a trend of declining increases over the past five years. Medium-term estimates released by the Ministry of Finance as part of the 2013-14 budget process suggest that defence will see a further rise of 10.4% in 2014 and 9.9% in 2015, taking spending to PKR760 billion.
However, as a share of GDP defence spending is expected to continue to decline, reaching around 2.65% of GDP in 2015.
Real-term growth in 2013-14 will be limited to around 2.5% as a result of relatively high inflation in the country, while the increases planned for the next two years will see spending increase by a further 5.8%.
Around 70% of the entire budget - or around USD4.6 billion - is currently dedicated to personnel and operating expenses.
However, the 2013-14 budgets is the first time in recent years that the proportion of the budget dedicated to these spending categories has not increased. Personnel costs in particular have seen rapid increases over recent years, rising from 32.1% of outlay in 2008 to 44.1% in 2012 but have remained relatively static in the current budget at 43.4%.
Pakistani government funding will be augmented by direct financial assistance from the US, which, according to the US State Departments Fiscal Year 2013 (FY13) budget request, is expected to provide a further USD350 million in Foreign Military Financing (FMF) and USD800 million in Pakistan Counterinsurgency Capability Program (PCCF) payments. These defence specific budget items will form part of a package of around USD2.4 billion in assistance provided by Washington in FY13.
JDW
