KARACHI: Pakistani finance authorities will present on Friday federal budget for the next fiscal year 2023-24, the state media reported, as the South Asian country is likely to post a Gross Domestic Product (GDP) growth of 0.29 percent in the fiscal year ending June 30.
Pakistan missed the GDP target by a huge 4.7 percent this fiscal year, which is well below the target of 5 percent set last year, according to the country’s economic survey that highlights the trend of macro-economic indicators, development policies and strategies as well as sectoral achievements of the economy.
The cash-strapped country is due to present its budget at a time when it is in desperate need of bailout funds from the International Monetary Fund (IMF) to shore up its foreign currency reserves that are barely enough to cover a month’s imports.
“Finance Minister Ishaq Dar will present the budget in the National Assembly scheduled to meet at four in the evening at the parliament house in Islamabad,” the state-run Radio Pakistan broadcaster reported on Friday.
At a pre-budget presser on Thursday, Dar called the outgoing year “a difficult year for the economy,” saying the coalition government faced “extreme challenges” when it came to power in April 2022.
“Pakistan has paid a huge political cost of meeting IMF reforms … the structural reforms, the power reforms, gas reforms, the fiscal reforms … we had to do the pending actions,” Dar told reporters.
“For Pakistan, this political cost was worth it … The revival of this [IMF] program was important because of Pakistan’s credibility.”
Islamabad has been hoping to have $1.1 billion of the funds released since November, but the IMF has insisted on a number of conditions being met before it makes any more disbursements.
On Thursday, an IMF official said Pakistan had to satisfy the lender on three counts, starting with a budget due on Friday, before its board reviews whether to release at least some of the $2.5 billion still pending under the $6.5 billion program expiring on June 30.
“As communicated to the authorities, there can be one remaining Board meeting under the current EFF at end-June,” Perez Ruiz said in an email response to Reuters.
“To pave the way for a final review under the current EFF, it is essential to restore the proper functioning of the FX market, pass a FY24 Budget consistent with program objectives, and secure firm and credible financing commitments to close the $6 billion gap ahead of the Board.”
The IMF had tasked Pakistan with securing external financing commitments for $6 billion from other sources, but so far it has only obtained commitments for $4 billion, mostly from Saudi Arabia and the United Arab Emirates.
Under pressure to shift to a more market-determined exchange rate regime and shut down an unofficial currency market, Pakistan removed daily limits on fluctuations earlier this year.
The country is already reeling from an economic crisis with inflation reaching a record 37.97 percent in May.
The government has imposed taxes, raised energy tariffs and scaled back subsidies in an attempt to persuade the IMF to unlock funding, while its central bank has also raised policy interest rates to a record 21 percent.
The IMF has so far conducted just eight of the 11 reviews that were to take place during the three-year program. The last review took place in August last year.
