Finance Minister Muhammad Aurangzeb is set to present the Rs18 trillion federal budget for the fiscal year 2024-25 in the National Assembly today, focusing on fiscal consolidation to reduce the budget deficit, official sources stated on Tuesday.
Sources indicate the budget’s main objectives include alleviating people’s hardships, transforming the agriculture sector, promoting information technology (IT), boosting exports, fostering industrial growth, and supporting businesses.
The budget formulation took into account the current economic challenges on both domestic and international fronts. The government is committed to delivering a pro-people, business-friendly, and progressive federal budget, the sources added.
On the revenue side, the government is expected to set a revenue collection target exceeding Rs12 trillion for the fiscal year 2024-25, driven by robust revenue growth during the outgoing fiscal year 2023-24.
“The budget preparation involved close coordination among all relevant departments and ministries, including the budget presentation in parliament following the Economic Survey launch,” a source revealed.
The budget aims at fiscal consolidation to reduce the budget deficit, revenue mobilization, economic stabilization, reducing non-development expenditures, and job creation, the source added.
The budget announcement follows the government’s statement that the expected economic growth of 2.4% for the current year will fall short of the 3.5% target, despite a 30% increase in revenues compared to last year and controlled fiscal and current account deficits.
Pakistan is negotiating with the IMF for a loan estimated between $6 billion and $8 billion to avoid default, as the country’s economy grows at the slowest pace in the region.
However, recent economic improvements, stabilization measures, falling inflation, and a recent interest rate cut by the central bank have made the government optimistic about future growth.
Finance Minister Muhammad Aurangzeb, presenting his first budget, told reporters on Tuesday that the key policy rate might fall further this year, with economic growth continuing to rise.
Markets will closely monitor the budget for targets on privatization proceeds, as Pakistan plans its first significant sale in nearly two decades by selling a stake in its national airline, initiating a series of similar moves.
Efforts to tax under-taxed sectors such as agriculture and retail for additional revenue may trigger protests from farmers and small traders. Additionally, spending cuts in discretionary funds for MPs have already strained alliances and party loyalties.
