ISLAMABAD: The federal government will unveil the Economic Survey of Pakistan 2023-24 today (Tuesday) at 5:30 pm. This pre-budget document outlines the major socio-economic achievements during the outgoing fiscal year.
Finance Minister Muhammad Aurangzeb will present the document in the National Assembly, according to a statement from the finance ministry.
The survey precedes the federal budget for the fiscal year 2024-25, which is scheduled to be presented on June 12 (Wednesday). The coalition government, led by Pakistan Muslim League-Nawaz (PML-N), is expected to propose ambitious fiscal targets in the Budget 2024-25 to support its case for a new bailout deal with the International Monetary Fund (IMF), officials and analysts have indicated.
Acknowledging severe financial constraints and reducing development funding under the IMF programme, the Annual Plan Coordination Committee (APCC) has recommended Rs1,221 billion for the federal development programme for the financial year 2024-25.
This will be the first budget presented by the current government.
As Pakistan aims to secure a loan programme to avoid defaulting on its slow-growing economy, the global lender has urged the country to increase provincial taxes, especially on agriculture, sales tax on services, and property tax. Pakistan is negotiating with the IMF for a loan estimated between $6 billion to $8 billion to prevent a default, as the country’s economy is currently the slowest growing in the region.
“The budget holds critical significance for Pakistan’s IMF programme and must close the gap between our revenue collection and total expenditure; it is thus likely to be contractionary,” said Ali Hasanain, associate professor of economics at the Lahore University of Management Sciences.
Pakistan narrowly avoided a default last summer due to a short-term IMF bailout of $3 billion over nine months. Although fiscal and external deficits have been brought under control, it resulted in a significant drop in growth and industrial activity, along with high inflation, which averaged nearly 30% in the last financial year and 24.52% over the last 11 months.
The growth target for the upcoming year is expected to be 3.6%, compared to 2% this year and an economic contraction last year.
Prime Minister Shehbaz Sharif has publicly committed to tough reforms since his election in February, but high prices, unemployment, and a lack of new job opportunities have increased political pressure on his coalition government.
Another critical aspect to watch in the budget will be the targets set for proceeds from privatisation. Pakistan is preparing for its first significant sale in nearly two decades by selling a stake in its national airline. This is expected to be the first in a series of sales of loss-making entities, particularly in the troubled power sector.
