ISLAMABAD: Pakistan’s coalition government will present on Wednesday its budget for the fiscal year to June 2025 that analysts expect to set ambitious fiscal targets as it looks to strengthen the case for a new bailout deal with the International Monetary Fund.
The budget comes a day after the government said economic growth of 2.4 percent expected in the current year would miss a target of 3.5 percent, although revenues were up 30 percent over last year, and the fiscal and current account deficits were under control.
While Pakistan is expected to stick to fiscal prudence under a new IMF program, growth is expected to stay constrained, said Abid Suleri of the Sustainable Development Policy Institute think tank.
“Many of the measures taken to achieve fiscal sustainability will impact growth negatively, at least in the near future,” he added.
Pakistan is in talks with the IMF for a loan estimated to range from $6 billion to $8 billion, as it seeks to avert a default for an economy growing at the slowest pace in the region.
But a recent economic uptick, following stabilization measures and falling inflation, as well as Monday’s interest rate cut by the central bank, has made the government optimistic about prospects for growth.
The key policy rate could fall further this year and economic growth would continue to rise, Finance Minister Muhammad Aurangzeb, set to present his first budget, told reporters on Tuesday.
Markets will watch the budget for a target for proceeds from privatization, as Pakistan looks to make its first major sale in nearly two decades with the disposal of a stake in its national airline, kicking off a series of such moves.
But concerns remain about the government’s ability to pursue reform, since it is vulnerable to the quirks of coalition politics in the face of rising public pressure against inflationary reform measures.
Tapping under-taxed sectors such as agriculture and retail for additional revenues would prompt protests by farmers and small traders, while spending cuts in discretionary funds for MPs have already squeezed alliances and party loyalties.
The budget will be in line with IMF requirements, said economist Sakib Sherani, but cautioned: “However, the real problem will be adherence to fiscal austerity and prudence and containment of populism.”
Pakistan to unveil budget with eye to winning new IMF bailout
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Pakistan to unveil budget with eye to winning new IMF bailout
- Pakistan expected to stick to fiscal prudence under IMF deal, markets will watch for target for proceeds from privatization
- Concerns remain about the government’s ability to pursue reform, since it is vulnerable to the quirks of coalition politics
Pakistan orders enhanced security measures countrywide as Afghanistan conflict intensifies
- Prime Minister Shehbaz Sharif chairs high-level meeting to review security situation in Pakistan amid Afghanistan conflict
- Sharif informed all security institutions on alert, all necessary measures being taken for country’s security, says state media
ISLAMABAD: Prime Minister Shehbaz Sharif this week directed authorities to ensure prompt and comprehensive security measures countrywide, state media reported, as Pakistan’s armed conflict with Afghanistan intensifies.
The latest clashes between the neighbors erupted after Pakistani airstrikes targeted what Islamabad described as militant hideouts inside Afghanistan earlier this month, drawing sharp criticism from Kabul. Afghanistan’s forces retaliated on Thursday night, firing at Pakistani posts along the border and triggering an armed conflict between the two sides.
Pakistan’s Information Minister Attaullah Tarar said on Saturday that 352 Afghan Taliban fighters had been killed and more than 535 wounded since the latest phase of hostilities began. Both sides have claimed to inflict massive damage on the other. However, Arab News could not independently verify the claims.
Sharif chaired a high-level meeting on Saturday to review the overall security situation in the country, state broadcaster Radio Pakistan reported.
“Prime Minister Muhammad Shehbaz Sharif has directed all relevant federal and provincial institutions to ensure prompt and comprehensive security measures in view of the current situation,” the state media reported on Saturday.
The premier directed authorities to ensure mutual coordination and coherence in fulfilling their responsibilities, paying tribute to the armed forces for their sacrifices in the “war against terrorism.”
“During the meeting, the prime minister was informed that all security institutions are on alert and all necessary measures are being taken for the security of the country,” the state broadcaster said.
On escalating tensions in the Middle East, Sharif directed Pakistan’s foreign office to repatriate Pakistani nationals stranded in Iran safely via Azerbaijan.
GUNFIRE, EXPLOSIONS IN KABUL
Meanwhile, explosions echoed across parts of Kabul before sunrise on Sunday, followed by bursts of gunfire, a Reuters witness said. It was not clear what had been targeted or whether there were casualties.
Taliban administration spokesperson Zabihullah Mujahid said the sounds were the result of Afghan forces targeting Pakistani aircraft over the capital.
“Air defense attacks were carried out in Kabul against Pakistani aircraft. Kabul residents should not be concerned,” Mujahid said.
Pakistan has said Afghanistan harbors Tehreek-e-Taliban Pakistan (TTP) militants, which it said are waging an insurgency inside Pakistan.
Afghanistan has denied the accusation, saying it does not allow Afghan territory to be used against other countries and that Pakistan’s security challenges are an internal matter.
Pakistani security sources have said operation “Ghazab Lil Haq,” meaning “Wrath for the Truth,” was ongoing and that Pakistani forces had destroyed Afghan posts and camps.
Diplomatic efforts have intensified, with Saudi Arabia, Russia, China, the European Union and United Nations urging restraint and calling for talks.
With additional input from Reuters
