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Finance Minister Muhammad Aurangzeb is set to unveil Rs18 trillion federal budget for the fiscal year 2024-25 in the National Assembly on today, which would focus on fiscal consolidation to contain budget deficit, official sources said on Tuesday.
According to sources, the main targets of the budget would be mitigating people’s problems, transforming agriculture sector, promoting information technology (IT), boosting exports, promoting industrial growth and bolstering businesses.
The budget was formulated while considering the existing challenges facing the economy on domestic and international fronts, the sources said, adding that the government was firmly committed to presenting a pro-people, business-friendly and progressive federal budget.
On the revenue side, according to the sources, the government was likely to set the revenue collection target at over Rs12 trillion for the fiscal year 2024-25, given robust revenues growth during the outgoing fiscal year, 2023-24.
“The budget is being prepared in close coordination among all departments and ministries, involved in budget-related events, including the presentation of the budget in the parliament a day after launching the Economic Survey,” a source said.
“It will pursue policies aimed at fiscal consolidation to contain budget deficit. In addition revenue mobilisation, economic stabilisation, reduction in non-development expenditures, job creation would be the main features of the budget,” the source added.
The budget comes a day after the government said economic growth of 2.4% expected in the current year would miss a target of 3.5%, although revenues were up 30% over last year, and the fiscal and current account deficits were under control.
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 stabilisation 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 privatisation, 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.
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.
With additional input from Reuters
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