Finance Minister Muhammad Aurangzeb is presenting budget 2024-25 amid opposition uproar in the National Assembly. The budget focus on fiscal consolidation to contain budget deficit, official sources said on Tuesday.
Kicking off his budget address, Finance Minister Aurangzeb extended his gratitude to Prime Minister Shehbaz Sharif, PML-N leader Nawaz Sharif, and other coalition leaders for their invaluable guidance in preparing the budget.
“Mr Speaker, despite facing political and economic challenges, our progress over the past year has been impressive,” Aurangzeb stated, urging the nation to seize the opportunity to revitalise the economy.
Aurangzeb commended the government’s determination in addressing economic challenges and pledged to accelerate development under PM Shehbaz’s leadership.
He highlighted the journey so far, emphasising a homegrown agenda that has helped navigate economic difficulties and stimulate development.
He acknowledged the significant hurdles the economy has faced, including depleted foreign reserves, a 40% rupee depreciation, stagnant growth, and soaring inflation pushing citizens below the poverty line.
Aurangzeb praised the previous PDM government, led by Shehbaz Sharif, for securing a crucial nine-month IMF programme in June 2023, which helped avert economic collapse.
“The previous IMF programme was ending, and a new deal was essential to prevent a default. I commend Shehbaz Sharif’s government for their efforts in securing the programme,” he said.
The minister pointed to marked improvements in economic indicators, attributing these successes to the efforts of the PM and his team.
“Inflation stood at 11.8% in May, a notable achievement considering the challenges. We’re on the right track, and inflation is likely to decrease further in the coming days,” he noted.
Aurangzeb highlighted a significant turnaround, with bolstered foreign exchange reserves and growing international investor interest.
“Pakistan’s foreign exchange reserves have been strengthened, and international investors are now seeking opportunities in our economy,” he said.
He also applauded the State Bank’s decision to cut interest rates as a significant move to combat inflation, congratulating Shehbaz Sharif and his team for their commendable efforts in turning the economy around.
“These achievements are not ordinary. As a result of these, the country has exited a difficult time,” Aurangzeb asserted.
The minister emphasised the need for patience and collective effort to achieve sustainable economic development, cautioning that progress cannot be accelerated overnight.
“There is a need for patience and extreme hard work, combined with homegrown corrective plans. The public must work together with institutions to achieve our economic goals,” he concluded, stressing the importance of collaboration and sustained efforts.
Pakistan Peoples Party Parlimentarians (PPPP) Secretary Information Shazia Marri confirmed to The Express Tribune that the party will not attend the session.
Only three of PPPP lawmakers, Naveed Qamar, Khursheed Shah and Ijaz Jakhrani, are attending the NA budget session.
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