Pakistan unveils $67.76 billion budget for fiscal year 2024-25 eyeing IMF bailout

Update Pakistan unveils $67.76 billion budget for fiscal year 2024-25 eyeing IMF bailout
Pakistan’s Finance Minister Muhammad Aurangzeb is presenting financial budget in the National Assembly in Islamabad, Pakistan on June 12, 2024. (@NAofPakistan/X)
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Updated 12 June 2024
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Pakistan unveils $67.76 billion budget for fiscal year 2024-25 eyeing IMF bailout

Pakistan unveils $67.76 billion budget for fiscal year 2024-25 eyeing IMF bailout
  • Finance Minister Muhammad Aurangzeb presents federal budget amid opposition’s sloganeering
  • Analysts say budget broadly in line with IMF conditions, will help in fiscal consolidation

KARACHI: Finance Minister Muhammad Aurangzeb on Wednesday unveiled the much-awaited Rs18.877 trillion ($67.76 billion) federal budget for the fiscal year 2024-25, which is expected to play a pivotal role in Pakistan’s negotiations with the International Monetary Fund (IMF) to unlock yet another loan from the international lender. 

Last year, Pakistan received $3 billion from the IMF under a Stand-By Arrangement (SBA) to stabilize its economy in the short term, including addressing immediate financial needs like debt repayments and supporting economic reforms.

However, given ongoing economic challenges like low foreign reserves and substantial fiscal deficits, Pakistan continues to need external financial support to meet its long-term goals and sustain structural reforms.

Speaking on the floor of the National Assembly while presenting the federal budget, Aurangzeb said Pakistan’s economy is expected to grow by 3.6% during the next fiscal year. He credited Prime Minister Shehbaz Sharif for fulfilling the conditions of Pakistan’s SBA agreement with the IMF, noting that the country’s economic indicators were showing a positive trend. 

“Mr. Speaker, I think despite political and economic challenges, our progress on the economic front in the past year has been impressive,” Aurangzeb told lawmakers amid loud slogans from the opposition benches. 

He said Pakistan’s improved economic conditions indicated that a “successful future” awaited the country. 

“Mr. Speaker, we need to increase the speed of our progress and achieve the destination of economic independence,” the minister said. 

“But this is not something that can be done overnight. For this, we need to work hard and work with all institutions and the people on a homegrown economic reform plan.”

The minister said the government has estimated total expenditures for the new fiscal year at Rs18.877 trillion ($67.76 billion), adding that the budget deficit is projected to be 6.9% of the GDP while the primary surplus is expected to be at 1.0 percent of GDP. 

“The estimated revenue for FBR is Rs12.97 trillion ($46.55 billion) which is 38 percent more than the current fiscal year,” Aurangzeb said.

He added that the share of the provinces in revenue will be Rs7.438 trillion($26.7 billion), while the government’s target for the federal non-tax revenue has been kept at Rs3.587 trillion ($12.87 billion). 

The minister said the net income of the federal government is expected to be Rs9.119 trillion ($32.72 billion). 

Aurangzeb said the Public Sector Development Program (PSDP) plays a vital role in a country’s development, prosperity and social welfare. 

“The government has devised the history’s biggest PSDP for the fiscal year 2024-25, which is worth Rs1,500 billion ($5.3 billion) and its volume is 101% larger than the previous year’s revised volume,” the finance minister noted. 

SALARIES, TAX SLABS

He announced the government would raise the salaries of employees below grade 17 by 25 percent and 20 percent for employees in the 17-22 grade range. The minister also announced a 15 percent increment in the pension of retired government employees and said that the minimum wage was being increased from Rs32,000 ($115) to Rs37,000 ($133). 

Aurangzeb said tax slabs for Pakistan’s salaried group will change while for the non-salaried individuals, the income tax rate can go as high as 45 percent. However, he clarified that the minimum tax slab will remain the same at Rs600,000 ($2,153) per year. 

He said the gain on capital tax (CGT) on securities for non-filers would be kept as high as 45%, while it would remain at 15 percent for filers. However, he proposed that the tax on CGT on real estate for both filers and non-filers be kept at the rate of 15 percent. 

The minister stressed the need for Pakistan to move toward a market-driven economy from a government-driven economy. 

“We must transition from a government-controlled economy to a market-driven one, aligning our economic system with global standards, boosting exports, and prioritizing a savings-and-investment-based economy over a consumption-based model,” he said. 

‘HIGH TAX COLLECTION TARGET’

Pakistani analysts said the budget will help in fiscal consolidation, saying it is broadly in line with the IMF’s guidelines. 

“Though the tax collection target is high, we believe that considering new taxation measures Pakistan may be able to reach closer to the primary and fiscal deficit estimates,” Muhammed Sohail, chief executive officer of Topline Securities, told Arab News. 

“Though no major reforms were seen on the exports, energy and other sectors, many tax exemptions have been removed,” he observed. 

Sohail said that by increasing the tax on petroleum products to Rs80 per liter, will help the government collect around Rs350 billion ($1.26 billion). 


Pakistani PM sets sights on annual exports of $60 billion in 3 years

Pakistani PM sets sights on annual exports of $60 billion in 3 years
Updated 40 min 21 sec ago
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Pakistani PM sets sights on annual exports of $60 billion in 3 years

Pakistani PM sets sights on annual exports of $60 billion in 3 years
  • Pakistan’s exports in previous fiscal year crossed $30 billion, says Shehbaz Sharif
  • Directs power ministry to develop plan to provide low-cost electricity to industries

ISLAMABAD: Prime Minister Shehbaz Sharif on Tuesday tasked authorities to increase Pakistan’s annual exports to $60 billion within three years, stressing the need to resolve exporters’ complaints as Islamabad seeks to enhance its foreign exchange reserves while grappling with a macroeconomic crisis. 

Pakistan is trying to navigate a tricky path to recovery from a prolonged economic crisis that has seen the South Asian country’s national currency weaken, its reserves plummet and inflation rise to a record high over the last two years. To stabilize its fragile $350 billion economy, Islamabad has increasingly sought to establish trade and investment relations with regional allies in recent months. 

Sharif chaired a meeting of Pakistan’s National Export Development Board on Tuesday to take stock of the country’s exports and discuss ways to enhance them. 

“The Ministry of Commerce and other institutions should take practical steps to achieve the target of taking exports to $60 billion in the next three years,” the prime minister was quoted as saying by his office. 

Sharif noted that Pakistan’s annual exports had crossed the $30 billion mark during the previous fiscal year, adding that the government’s policies took the country’s IT exports to over $3.2 billion. He directed authorities to resolve exporters’ complaints and submit a report to him within two weeks. 

“We salute the businesspersons and investors who have played their role in increasing Pakistan’s exports despite difficult conditions,” Sharif said, according to the Prime Minister’s Office (PMO).

The prime minister called for reducing the delivery time Pakistani goods take to reach Europe and America, saying that this could be achieved by solving problems related to shipping. He emphasized increasing the quality of Pakistani exports through research and development, innovation and brand development. He directed Pakistan’s power ministry to present a comprehensive plan through which low-cost electricity is provided to industries.

Sharif warned Pakistan’s tax authority, the Federal Board of Revenue, (FBR) against delaying refunds to exporters, urging trade officers in Pakistan’s missions abroad to promote the country’s exports and guide exporters on increasing their sales.
 


Pakistan face UAE in Women’s T20 Asia Cup cricket clash today 

Pakistan face UAE in Women’s T20 Asia Cup cricket clash today 
Updated 23 July 2024
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Pakistan face UAE in Women’s T20 Asia Cup cricket clash today 

Pakistan face UAE in Women’s T20 Asia Cup cricket clash today 
  • Pakistan beat Nepal by nine wickets with 49 balls to spare on Sunday 
  • Bottom-placed UAE have lost both of their matches in the tournament 

ISLAMABAD: Pakistan women’s national cricket team will take on the United Arab Emirates in Sri Lanka today, Tuesday, as the two sides clash in another fixture of the ongoing Women’s T20 Asia Cup tournament. 

Pakistan will head into the match confident after routing Nepal by nine wickets at the Rangiri Dambulla International Stadium on Sunday. Pakistan achieved Nepal’s modest target of 109 runs with little trouble, making 110 for one in just 11.5 overs and with 49 balls to spare.

“In Women’s Asia Cup 2024, Pakistan will face the United Arab Emirates at Dambulla, Sri Lanka today,” state broadcaster Radio Pakistan said. 

The match between the two teams is scheduled to begin at 1:30 p.m. Pakistan Standard Time (PST), it added. 

Pakistan lost their tournament opener against arch-rivals India on Friday. Batting first, the green shirts were bowled out for 108 runs from 19.2 overs which was chased down by India in 14.1 overs and with seven wickets in hand. 

Deepti Sharma was the pick of the Indian bowlers, returning figures of 3-20 while Renuka Singh and Shreyanka Patil both ended up with figures of 2-14. India are at the top of the tournament table with two wins from as many matches while Pakistan are placed at number two, with one loss and a win under their belt. 

The UAE have so far lost both their matches in the tournament against India and Nepal. They are at the bottom of the table. 


Turkmenistan foreign minister in Islamabad today as Pakistan woos land-locked Central Asia

Turkmenistan foreign minister in Islamabad today as Pakistan woos land-locked Central Asia
Updated 23 July 2024
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Turkmenistan foreign minister in Islamabad today as Pakistan woos land-locked Central Asia

Turkmenistan foreign minister in Islamabad today as Pakistan woos land-locked Central Asia
  • Flurry of recent visits and investment talks between Pakistan and Central Asian states, including Uzbekistan and Azerbaijan
  • Pakistan hopes to enhance role as pivotal trade and transit hub connecting resource-rich Central Asian states with the world

ISLAMABAD: Turkmenistan Foreign Minister Rasit Meredow arrived at the Pakistani foreign office on Tuesday for talks with Deputy Prime Minister and Foreign Minister Ishaq Dar, amid the South Asian nation’s efforts to boost trade and transit ties with Central Asian republics.

Meredow is on a three-day visit to Pakistan, as Islamabad hopes to leverage its strategic geopolitical position and enhance its role as a pivotal trade and transit hub connecting the landlocked Central Asian republics with the rest of the world.

There has been a flurry of recent visits, investment talks and economic activity between Pakistan and Central Asian states, including meetings with leaders from Uzbekistan and Azerbaijan.

"The two leaders will lead their respective delegations in the third round of bilateral political consultations and discuss global and regional developments," the Pakistani foreign office spokesperson said in a statement ahead of Meredow’s meeting with Dar.

"The two leaders will hold talks to give positive impetus to Pakistan-Turkmenistan relations and explore avenues of bilateral cooperation with special focus on trade, investment and energy cooperation, regional connectivity and cultural ties.”

Meredow and Dar will also address a joint press stakeout.

Located in a landlocked but resource-rich region, Central Asian countries need better access to regional markets including Pakistan, China, India, and the countries of West Asia. Meanwhile, Islamabad is seeking to bolster trade and investment relations with allies to stabilize its fragile $350 billion economy as it faces an acute balance of payment crisis amid soaring inflation and surging external debt.

Pakistan has recently offered that Central Asian states become part of the China-Pakistan Economic Corridor project, under which Beijing has pledged around $65 billion in energy, infrastructure and other projects in Pakistan. Islamabad believes the corridor presents a strategic opportunity for Central Asian states to transport their goods more easily to regional and global markets.


Pakistan delays national airline’s auction till September as bidders seek more information— report 

Pakistan delays national airline’s auction till September as bidders seek more information— report 
Updated 23 July 2024
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Pakistan delays national airline’s auction till September as bidders seek more information— report 

Pakistan delays national airline’s auction till September as bidders seek more information— report 
  • Bidders are waiting for airline’s latest audited accounts, clarity on flights to Europe that are banned, says Bloomberg 
  • Pakistan is looking to sell 51 percent to 100 percent of the carrier, which has failed to report an annual profit for nearly two decades

ISLAMABAD: Pakistan’s government has delayed the final auction for its national airline until the end of September, international business publication Bloomberg reported this week, as potential bidders seek more information to assess the carrier. 

Islamabad plans to sell the Pakistan International Airline (PIA) and outsource three of its airports in its attempts to curtail losses and enhance its foreign exchange reserves at a time when the country’s fragile $350 billion economy faces a balance of payment crisis.

The privatization of the loss-making state-owned enterprise has long been on the International Monetary Fund’s (IMF) list of recommendations for Pakistan, with which it signed a $7 billion loan agreement this month. Pakistan’s government said in July it expected to announce the auction date within 10 days. 

“Pakistan has delayed the final auction for state-owned Pakistan International Airlines by two months until the end of September after potential bidders sought more information to assess the carrier, according to people familiar with the matter,” Bloomberg reported on Monday. 

Quoting anonymous sources familiar with the matter, Bloomberg said the bidders are waiting for the airline’s latest audited accounts, clarity on flights to Europe that are banned and aircraft lease agreements. 

The European Union Aviation Safety Agency (EASA) banned PIA from its most lucrative routes in Europe and Britain after a PIA plane crash in Karachi in 2020 killed nearly 100, followed by a scandal over pilot licenses. The ban continues, costing the airline annual revenue of nearly 40 billion rupees ($143.73 million), the government has told parliament.

Pakistan is looking to sell 51 percent to 100 percent of the carrier, which has failed to report an annual profit for nearly two decades. In June, Pakistan selected six bidders to bid for the airline, which includes a consortium led by the Yunus Brothers Group., one of the nation’s largest business conglomerates, and another by businessman Arif Habib. 

A popular airline during its heydays in the ‘60s and ‘70s, PIA has grappled with financial losses, mismanagement, and operational challenges in recent years. It has also been burdened by a high debt load, inefficiencies, and corruption allegations, resulting in an overall decline in its financial performance.

Previous Pakistani governments avoided disposing the flag carrier as a potentially highly unpopular move. However, Pakistan’s recent macroeconomic crisis and its desperate need to secure another financial assistance package from the IMF has forced the government to go ahead with the auction. 


Pakistan’s disaster management authority warns of ‘high-level’ flooding in Sialkot, Narowal cities

Pakistan’s disaster management authority warns of ‘high-level’ flooding in Sialkot, Narowal cities
Updated 23 July 2024
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Pakistan’s disaster management authority warns of ‘high-level’ flooding in Sialkot, Narowal cities

Pakistan’s disaster management authority warns of ‘high-level’ flooding in Sialkot, Narowal cities
  • Jammu region may receive “heavy to very heavy rainfall” over next three days, says authority 
  • Heavy monsoon rains have killed at least 24, injured 80 this month in Punjab province

ISLAMABAD: Pakistan’s National Disaster Management Authority (NDMA) has warned that the Pakistani cities of Narowal and Sialkot may suffer “high-level” flash flooding this week triggered by heavy monsoon rains, urging authorities to take action to mitigate the possible effects of the calamity. 

Heavy monsoon rains have lashed several cities of Punjab, Pakistan’s most populous province, this month. At least 24 people were reportedly killed and 80 others injured this month in rain-related incidents across the province. 

In a press release on Monday, the NDMA’s National Emergencies Operation Center said it anticipates “heavy to very heavy rainfall” in the Jammu region over the next three days. 

“As a result, local nullahs in Narowal and Sialkot, including Nullah Aik, Daik, and Palkhu, may become inundated, potentially leading to flash flooding,” the disaster management authority said in a statement. 

“NDMA has issued instructions to all relevant departments to take necessary precautions to mitigate the possible effects of flooding and extreme weather.”

The authority warned that flash floods can catch people off guard, advising populations at risk to avoid floodwaters and find a safe location away from dangerous areas. 

“Even a mere six inches of moving water can knock you off your feet, and just one foot of moving water can sweep away a vehicle,” it warned. “Bridges can be hazardous during floods. Avoid crossing them if water is flowing rapidly.”

The authority said it has launched the “Pak NDMA Disaster Alert” mobile application, available on Google Play Store and iOS App Store, to provide timely alerts, adviseries, and guidelines to the public. 

Pakistan is recognized as one of the most vulnerable countries to climate change effects in the world. Unusually heavy rains in June 2022 triggered flash floods in many parts of the country, killing over 1,700 people, inflicting losses of around $30 billion, and affecting over 33 million people.