Islamabad: Finance minister Ishaq Dar stated that Pakistan’s government will target a budget deficit of 6. 54% of economic output in the fiscal year starting on July 1, slightly below the current year’s revised estimate of 7%. He announced the target during a speech to the national legislature on the government’s annual budget. The budget needs to satisfy the IMF to secure the release of stuck bailout money for the crisis-struck country, which is due to hold a general election by November. Dar said the government had prepared “a responsible budget, not an election budget”.
According to Dar, the entire spending goal is 14.46 trillion rupees, of which 1.8 trillion rupees will go towards defence. It will aim to pay off 7.3 trillion rupees worth of debt. Dar reaffirmed the government's hopes for a quick IMF agreement, echoing remarks made earlier in the day by Prime Minister Shehbaz Sharif in a speech to his cabinet.
The Pakistan’s government is attempting to convince the IMF to unlock at least some of the remaining $2. 5 billion in a $6. 5 billion programme that it entered in 2019 and that expires at the end of this month. This is because the country is currently dealing with a number of economic and political difficulties. The budget would target total tax revenue of 9. 2 trillion rupees, said Dar, who added there would be no new tax on the industrial sector. Inflation for the next fiscal year is expected to come in at 21%, Dar said. Inflation in May was at a record high of nearly 38%.