KARACHI: The Sindh government will unveil its budget for the fiscal year 2024-2025 on June 14. Chief Minister Murad Ali Shah will present the provincial budget for the upcoming financial year.
The sources disclosed that the budget proposal includes a suggested increase of 10% to 15% in the salaries of Sindh’s government employees. Additionally, it was mentioned that no allocation will be made for new development schemes in Sindh, with funds primarily directed towards ongoing projects.
Meanwhile, the federal government is poised to reveal its budget for the next fiscal year, 2024-2025, today. Analysts anticipate ambitious fiscal targets aimed at bolstering negotiations for a new bailout deal with the International Monetary Fund (IMF).
This budget announcement follows a recent government statement indicating that the projected economic growth of 2.4% for the current year would fall short of the 3.5% target. Despite this, revenues have surged by 30% compared to last year, and fiscal and current account deficits remain manageable.
Pakistan is currently engaged in discussions with the IMF for a loan estimated between $6 billion to $8 billion, aiming to stave off a default for an economy experiencing sluggish growth compared to regional counterparts.
Encouraging signs such as stabilization measures, declining inflation, and Monday’s interest rate reduction by the central bank have instilled optimism within the government regarding growth prospects.
Finance Minister Muhammad Aurangzeb, poised to present his inaugural budget, expressed confidence in the potential for further reductions in the key policy rate this year, anticipating a sustained economic upswing.
Market attention will be keenly focused on the budget for details regarding proceeds from privatization, with Pakistan eyeing its first major divestiture in nearly two decades, beginning with the sale of a stake in its national airline.
However, concerns persist about the government’s ability to implement reforms amidst coalition politics and mounting public pressure against inflationary measures.
Efforts to generate additional revenue from sectors like agriculture and retail could trigger protests from farmers and small traders, while cuts in discretionary funds for Members of Parliament have already strained alliances and party allegiances.
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