ISLAMABAD: Pakistan has set a challenging tax revenue target of 13 trillion rupees ($46.66 billion) for the year starting July 1, a near 40 percent jump from the current year, to strengthen the case for a new bailout deal with the International Monetary Fund.
The ambitious revenue targets for the fiscal year through June 2025 were in line with analyst expectations.
Key objectives for the upcoming fiscal year included bringing the public debt-to-GDP ratio to sustainable levels and prioritising improvements in the balance of payments position, the government’s budget document showed.
Pakistan has projected a sharp drop in its fiscal deficit for the new financial year at 5.9 percent of GDP, from an upwardly revised estimate of 7.4 percent for the current year.
GDP would expand 2.4 percent in the current year, missing the budgeted target of 3.5 percent, the government said in its economic review on Tuesday, despite revenues being up 30 percent on the year, and the fiscal and current account deficits being under control.
Pakistan will look to widen the tax base to avoid burdening existing tax payers to meet its targets, Finance Minister Muhammad Aurangzeb said while presenting the budget.
While Pakistan is expected to stick to fiscal prudence under a new IMF program, growth will 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 said.
Pakistan is in talks with the IMF for a loan of about $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, falling inflation and an interest rate cut on Monday have stirred government optimism over the prospects for growth.
The key policy rate could fall further this year and economic growth would continue to rise, Aurangzeb had told reporters a day before presenting his first budget.
Pakistan sets big Rs13 trillion revenue target for year to June 2025
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Pakistan sets big Rs13 trillion revenue target for year to June 2025
- Pakistan presents federal budget to strengthen case for new IMF loan agreement
- Pakistan has projected sharp drop in fiscal deficit for new financial year at 5.9 percent of GDP
Pakistan PM calls PIA privatization ‘vote of confidence’ as government pushes reforms
- The loss-making national flag carrier was sold to a Pakistani consortium for $482 million after two failed attempts
- Finance minister vows to continue economic reforms, engage international partners through trade and investment
KARACHI: Prime Minister Shehbaz Sharif said on Tuesday the privatization of state-owned Pakistan International Airlines marked a “vote of confidence” in the country’s economy, as the government presses ahead with structural reforms aimed at easing pressure on public finances and attracting investment.
The sale of the loss-making national carrier by a Pakistani consortium, which secured a 75 percent stake for Rs135 billion ($482 million), follows two previous attempts to privatize PIA. The development comes as Pakistan seeks to build on macroeconomic stabilization after a prolonged balance-of-payments crisis, with authorities trying to shift the economy toward export-led growth and policy continuity.
“It was our firm commitment to the people of Pakistan that speedy and concrete steps would be taken to privatize loss-making state-owned enterprises that have been a burden on the economy,” Sharif said in a post on X. “The successful completion of the transparent and highly competitive bidding process for the privatization of PIA marks an important milestone in fulfilling that commitment.”
“The strong participation of our leading business groups and some of Pakistan’s most seasoned and respected investors is a powerful vote of confidence in our economy and its future,” he added.
The government has made privatization of state-owned enterprises a key pillar of its reform agenda, alongside changes to taxation, energy pricing and trade policy, as it seeks to stabilize the economy and restore investor confidence.
Meanwhile, Finance Minister Muhammad Aurangzeb told an international news outlet Pakistan had reached a critical turning point, with macroeconomic stability and sustained reforms helping shift the economy from stabilization toward growth.
“Macroeconomic stability, sustained reforms and policy continuity are restoring confidence, shifting the economy from stabilization to export-led growth,” he said in an interview with USA Today, according to a statement issued by the finance ministry, adding that the government was opening new opportunities for domestic and global investors.
Aurangzeb said inflation had eased sharply, external balances had improved and foreign exchange reserves had risen above $14.5 billion, while Pakistan had recorded both a primary fiscal surplus and a current account surplus for the first time in several years.
The finance minister noted that economic growth remained insufficient to meet the needs of a fast-growing population, pointing out the importance of continuing structural reforms and encouraging investment in sectors such as agriculture, minerals, information technology and climate resilience.
Despite ongoing risks from global commodity prices, debt pressures and political uncertainty, Aurangzeb said the government remained committed to staying the reform course and engaging international partners through trade and investment.
