Pakistan budget LIVE: Pakistan's PM optimistic about deal with IMF this month

Nasir Iqbal, an economist at the Pakistan Institute of Development Economics (PIDE), said, "The government definitely has to take such popular decisions as it is the election year."

Iqbal said that the country failed to meet any economic growth targets for the fiscal year 2022-23, according to a key government report released Thursday, with GDP growth a miserly 0.3 percent.

Dar said Friday the latest budget was based on GDP growth of 3.5 percent, although the World Bank projected a less-ambitious two percent growth in a report issued earlier this week.

It also had an annual inflation forecast of 21 percent, against a current year-on-year rate of 37.97 percent.

Akhtar Khan Nawaz, a labourer at a fruit and vegetable market in the capital Islamabad, said "the poor were being humiliated". 

"(The budget) will be of no use unless inflation is reduced, the poor will only get relief if inflation is eased," he told AFP.

While presenting the budget to the National Assembly, Finance Minister Ishaq Dar insisted targets had been prudent. 

"There are general elections in the country soon, but despite that the next fiscal-year budget is prepared as a responsible budget instead of an election budget," he said.

Prime Minister Shehbaz Sharif blamed his predecessor Imran Khan, who was ousted by a vote of no-confidence in April last year, for the morass. 

"Our preceding government has battered the economy," he said.

Pakistan’s political climate has been volatile for a while now. Click to understand what is taking a toll on Pakistan's economy.

The Annual Budget Statement (ABS) is one of the most important documents throughout this entire procedure. It offers a financial forecast for the following fiscal year. The amounts needed to cover "charged expenditures" and "voted expenditures" are also shown individually. The statement comprises receipts, expenditures, summaries of demand broken down into "charged" and "other than charged" spending, and a categorization of budget projections by object, as reported by the Dawn.

In an interview with Turkish news agency Anadolu, Pakistani Prime Minister Shehbaz Sharif expressed optimism that an agreement with the International Monetary Fund (IMF) will be finalised this month.

In order for Pakistan to get out of its severe balance of payments crisis, the disbursement of delayed bailout money under the 9th IMF review is essential. Just one month's worth of imports may be covered by the central bank's reserves.

The senator began his budget speech by evaluating the economic performance between 2013 and 2018, when the Pakistan Muslim League-Nawaz (PML-N) was last in power by popular ballot.

“This budget should not be seen as an ‘election budget’ – it should be seen as a ‘responsible budget’,” he said.

Finance Minister Ishaq Dar began his speech in the parliament by providing an overview of the economic performance during the period of 2013-2018, majorly governed by the Pakistan Muslim League-Nawaz.

He stated that in the fiscal year 2016-17, Pakistan achieved a notable economic growth rate of 6.1 per cent. During that period, inflation stood at a mere 4 per cent, with food inflation being at just 2 per cent. 

Furthermore, the senator highlighted that according to PricewaterhouseCoopers' projections, Pakistan was expected to become a member of the G20 by 2030, indicating its potential for economic growth and influence on the global stage.

In contrast, the senator criticised the previous government of Pakistan Tehreek-e-Insaf (PTI), led by Imran Khan. He pointed out that in 2017, Pakistan held the 24th position among the world's largest economies, but its ranking had declined significantly to the 47th position by 2022 under the governance of Imran Khan.

Pakistan is expected to aim for a GDP increase of 3.5 per cent in the FY ending March 2024. In the previous fiscal year (2022-23), the country experienced a miserable growth rate of 0.3 per cent.

The proposed development expenditure is set at 1,150 billion Pakistani rupees ($4 billion).

As for inflation, the target for the upcoming fiscal year is projected to be 21 per cent. In the outgoing fiscal year, inflation was recorded at a high rate of over 29 per cent, reaching a record-breaking 38 per cent in May.

The International Monetary Fund (IMF) is calling for a budget that aligns with the objectives of their program. Esther Perez Ruiz, the IMF's resident representative for Pakistan, stated that the discussions surrounding the budget for the fiscal year 2024 aim to strike a balance between enhancing debt sustainability and creating room for increased social spending.

Pakistan's federal cabinet on Friday approved the country's proposed budget for the financial year 2023-24. Finance Minister Ishaq Dar, Minister for Planning, Development and Special Initiatives Ahsan Iqbal were present in the meeting chaired by Prime Minister Shehbaz Sharif.

“Pakistan faced a loss of nearly Rs.30 billion", Shehbaz said, adding that the prices of commodities also increased worldwide due to the Ukraine war.

“There are no more hindrances coming in the way of the IMF agreement,” the PM said.

Pakistan's government is seen targeting a fiscal deficit of 7.7% of GDP for the 2023-24 fiscal year, Reuters quoted a source as saying. 

This comes ahead of the finance minister's budget speech, much wider than the current year's original estimate of 4.9%.

The budget needs to satisfy the IMF to secure the release of more bailout money for the crisis-struck country, which is due to hold a general election by November.

Total spending is expected to be 14.5 trillion rupees ($50.54 billion), with 1.8 trillion rupees going to defence, said the source.

Pakistan missed its economic targets set in its last budget. The growth target was set at 5 per cent however with the looming economic crisis the growth rate was revised down to 2 per cent. 
 

Ahead of the budget presentation in Pakistani Parliament, the federal cabinet meeting kicked off with Prime Minister Shehbaz Sharif in chair. Shortly, the country's finance minister will make his budget speech. 

With the Pakistani economy wrought by high inflation and debt default risk, IMF on Thursday said that the organisation has been in talks with the country over the budget which is to be tabled in Parliament on Friday.