Fiscal Sustainability and Pension Liabilities of Pakistan

Authors

  • Asif Javed Associate Research Fellow, Sustainable Development Policy Institute, Pakistan
  • Sidra Tahir Assistant Director, National Tariff Commission, Ministry of Commerce, Islamabad, Pakistan
  • Vaqar Ahmed Team Lead, Oxford Policy Management, Islamabad, Pakistan

Keywords:

Pension, pension reform, fiscal sustainability, public debt

Abstract

The study evaluates fiscal sustainability in Pakistan by examining pension expenditures and their implications. Using data from 2000–2020, the Auto-Regressive Distributed Lag (ARDL) model is applied to explore how pension expenditures affect fiscal sustainability in Pakistan. The results highlight a positive impact of pension expenditures on the primary deficit, suggesting that fiscal imbalances increase with a rise in pension costs. The negative relationship between the primary deficit and the debt-to-GDP ratio indicates the presence of fiscal sustainability, although the impact is moderate. Based on key observations, it is recommended that Pakistan implement pension reforms to overcome fiscal challenges and improve financial sustainability.

JEL classification codes: H75, H55, E62, H63

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Published

2024-12-30

Issue

Volume 2: 2024

Section

Articles

License

Copyright (c) 2024 Asif Javed, Sidra Tahir, Vaqar Ahmed

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Authors retain copyright and grant the journal the right of first publication, with the work simultaneously licensed under a CC-BY 4.0 License.