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The Budget Credibility Gap: An Integrated Data-Driven Fiscal Contingency Framework for Managing Macroeconomic Shocks

Author

Listed:
  • Mehwish Mumtaz

    (Pakistan Institute of Development Economics, Islamabad)

  • Ahsan ul Haq

    (Pakistan Institute of Development Economics, Islamabad)

Abstract

Key Highlights Pakistan's annually budgets are immediately destroyed by external commodities shocks. This occurs as a result of policymakers setting fiscal targets based on extremely optimistic tax estimates and strict deficit limitations without allowing for any margin of error. To meet its revenue goals, the government depends on the petroleum charge and SBP profit transfers. It is incorrect to refer to this as a planned policy since it just serves to emphasize how flawed traditional tax collection is.

Suggested Citation

  • Mehwish Mumtaz & Ahsan ul Haq, 2026. "The Budget Credibility Gap: An Integrated Data-Driven Fiscal Contingency Framework for Managing Macroeconomic Shocks," PIDE Policy View Point 2026:75, Pakistan Institute of Development Economics.
    • Handle: RePEc:pid:pviewp:2026:75
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