current affairs MCQ #6927

What is a "primary surplus" in Pakistan's fiscal context and why did the IMF require it?

current affairs MCQ #6927

  1. Question 1

    Q1. What is a "primary surplus" in Pakistan's fiscal context and why did the IMF require it?

    • A) A surplus in the current account of the balance of payments
    • B) Excess revenue from primary commodity exports
    • C) Government revenue exceeding expenditure before interest payments, signaling debt sustainability
    • D) Profit made by state-owned enterprises before taxation

    Answer: Government revenue exceeding expenditure before interest payments, signaling debt sustainability

    Explanation: A primary surplus means government revenue exceeds all expenditure except interest payments; the IMF requires Pakistan to achieve this because it signals that, absent debt service costs, the government is not borrowing to fund operations — a key indicator of debt sustainability.