Federal Cabinet Approves Fiscal Year 2023-2014 Budget Proposals: The federal cabinet has approved the budget proposals for the upcoming fiscal year (2023-2024), marking a significant advancement in Pakistan's economic planning. Prime Minister Shehbaz Sharif puts the IMF deal and economic recovery first. Under the authority of State head Shehbaz Sharif, a gathering was met, went to by Fund Clergyman Ishaq Dar, Priest for Arranging, Improvement, and Extraordinary Drives Ahsan Iqbal, and different authorities.
During the meeting, the Prime Minister stressed that the government's previously agreed-upon International Monetary Fund (IMF) deal should be restored first. He predicted that a staff-level agreement would be signed by the end of the month and expressed confidence in meeting all of the IMF's requirements. The devastating floods of last year also had an effect on the economy, according to Prime Minister Shehbaz, who estimated a loss of nearly Rs. 30 billion. He said that the war in Ukraine was to blame for the rise in commodity prices worldwide and that the IMF agreement would not be affected in any other way. The Prime Minister thanked China, Saudi Arabia, and the United Arab Emirates for their financial assistance during Pakistan's difficult times.
Shehbaz Sharif mentioned positive economic developments, including a decrease in the current account deficit to $3.4 billion, which provided significant relief. He underlined the potential for Pakistan to improve horticultural changes, consolidate esteem added changes, and lay out storage spaces to support sends out worth billions. In his first year in office, Finance Minister Ishaq Dar made hints that he would help alleviate the situation by raising the minimum wage and increasing salaries for government employees. The IMF, on the other hand, will keep a close eye on these measures.
Within the budget, the public and markets will examine the following key aspects:
- Pakistan is likely to announce a target for GDP growth of 3.5 percent, which is better than the 0.3 percent growth rate achieved in the previous fiscal year (2022–23).
- The estimated cost of development is Rs1,150 billion.
- It is anticipated that the rate of inflation for the upcoming fiscal year will be set at 21%, a decrease from the rate of over 29% that was recorded in May, which set a record.
- The IMF holds back nothing that lines up with program targets, with an emphasis on reinforcing obligation supportability possibilities while permitting space for expanded social spending, as expressed by Esther Perez Ruiz, the IMF's inhabitant delegate for Pakistan.
- The market's consideration will be centered around whether the public authority plans to increment or diminishing corporate expense rates, especially the Super Assessment, and in the event that the proposed charge on corporate stores will be carried out.
A source says that Pakistan's proposed budget is expected to be 50.70 billion dollars, or 14.5 trillion Pakistani rupees. The suggestions envelop a financial deficiency focus of 7.7% of Gross domestic product and an income assortment focus of 9.2 trillion Pakistani rupees ($32.17 billion).
This budget comes at a difficult time for the government because it must simultaneously address the need for assistance to support the population ahead of an upcoming national election in early November and navigate the demands of implementing an exhausting economic reform plan outlined by the IMF.
The country's GDP growth in the current fiscal year 2022-23, which ends on June 30, was significantly lower than the initial budget target of 5% and the revised central bank projection of 2%. In addition, Pakistan is experiencing high inflation, with the highest rate in Asia at 38% in May.
Pakistan must receive the IMF's delayed $1.1 billion funding in order to access other bilateral and multilateral financing options and avoid defaulting on its debt. These funds are necessary for the government to meet its ongoing financial obligations and stabilize the economy.
