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Economic Survey of Pakistan 2023-24 to be Unveiled Tomorrow Ahead of Crucial Federal Budget

ISLAMABAD: The federal government will unveil the Economic Survey of Pakistan 2023-24, a pre-budget document detailing the major socio-economic achievements during the outgoing fiscal year, at 5 pm tomorrow (June 11). Finance Minister Muhammad Aurangzeb will present this document in the National Assembly, according to a statement issued by the finance ministry.

This economic survey precedes the federal budget for the fiscal year 2024-25, slated for presentation on June 12 (Wednesday). The coalition government led by Pakistan Muslim League-Nawaz (PML-N) is expected to outline ambitious fiscal targets in the Budget 2024-25 to strengthen its case for a new bailout deal with the International Monetary Fund (IMF), according to officials and analysts.

Acknowledging severe financial constraints and reducing development funding under the IMF programme, the Annual Plan Coordination Committee (APCC) has recommended Rs1,221 billion for the federal development programme for the financial year 2024-25. This budget will be the first presented by the incumbent government.

As Pakistan strives to secure a loan programme to avoid default amid a slow-paced economy, the IMF has asked the country to increase provincial taxes, especially on agriculture, sales tax on services, and property tax. Pakistan is negotiating with the IMF for a loan estimated to be between $6 billion and $8 billion to prevent an economic default, with the economy currently growing at the slowest pace in the region.

“The budget holds critical significance for Pakistan’s IMF programme and must close the gap between our revenue collection and total expenditure; it is thus likely to be contractionary,” said Ali Hasanain, associate professor of economics at the Lahore University of Management Sciences. Pakistan narrowly avoided a default last summer due to a short-term IMF bailout of $3 billion over nine months.

While fiscal and external deficits have been controlled, this has come at the cost of a significant drop in growth and industrial activity, alongside high inflation, which averaged close to 30% last financial year and 24.52% over the last 11 months. The growth target for the upcoming year is expected to be higher at 3.6% compared to 2% this year and economic contraction last year.

Prime Minister Shehbaz Sharif has publicly committed to tough reforms since being elected in February, but high prices, unemployment, and a lack of new job opportunities have increased political pressure on his coalition government. Another key aspect of the budget will be the targets set for proceeds from privatization. Pakistan aims to make its first major sale in nearly two decades by selling a stake in its national airline, marking the beginning of a series of sales of loss-making entities, particularly in the troubled power sector.

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