ISLAMABAD – Prime Minister Shehbaz Sharif said on Monday that the budget for fiscal year 2023-24, which is set to be presented on June 9, will bring economic prosperity, business-friendly policies, and public welfare to the country, while an IMF bailout deal remains elusive despite months of negotiations.
Millions of Pakistanis are battling to make ends meet as the country’s annual inflation rate increased to 37.97% in May, setting a national record for the second month in a row and exacerbating the South Asian country’s issues with a balance of payment crisis and the prospect of a sovereign default. Inflation has been rising since early this year, as the government implemented tough budgetary reforms needed by the IMF in order to free delayed funding.
The IMF criteria include the elimination of subsidies, an increase in energy prices, a market-based exchange rate, and increased taxation to produce more money for a supplementary budget.
Islamabad claims to have met the standards, but the IMF has failed to release the $1.1 billion cash that has been frozen since November as part of the $6.5 billion Extended Fund Facility agreed upon in 2019.
The cash is crucial for Pakistan to have access to other bilateral and international funds. The IMF programme is set to terminate this year on June 30.
“The central point of the fiscal year 2023-24 budget will be economic prosperity, public welfare, and business-friendly policies,” Prime Minister said in a statement after approving an increase in the Public Sector Development Programme (PSDP).
The statement followed a lengthy meeting with coalition partners in Islamabad to include their ideas in the next budget.
“Despite economic challenges, the government is attempting to ensure prudent utilisation of all available resources,” he said, promising to allocate a “sufficient amount” for individuals impacted by floods last year and to launch a flood response programme to deal with the tragedy in the future.
