Pakistan to Present 2024-25 Budget on June 10: Key Details and Implications
Prime Minister’s Diplomatic Engagements in China
During this trip, the Prime Minister will travel to the cities of Xi’an, Shenzhen, and Beijing. The Ministry of Foreign Affairs (MoFA) confirmed the visit, emphasizing its importance for strengthening bilateral relations between Pakistan and China.
Impact of IMF Recommendations on the Budget
Amidst these diplomatic engagements, significant attention is on the forthcoming budget, particularly concerning the International Monetary Fund (IMF) recommendations.
Inflationary Pressures:
The IMF’s recommendations are likely to increase inflation as the government might impose a 5-10% sales tax on previously zero-rated sectors. Essential commodities such as milk, tea, sugar, rice, flour, and packed milk could see price hikes due to reduced tax exemptions.
Significance of the 2024-25 Budget
According to sources within the finance ministry, this budget is particularly crucial as Pakistan prepares to negotiate a new loan from the IMF.
IMF Loan Program: The IMF recently concluded two weeks of technical and policy discussions with Pakistani officials, paving the way for a potential staff-level agreement under an extended fund facility. This agreement is vital for Pakistan as it seeks to secure at least $6 billion in new financing. Additionally, Pakistan plans to request further funds under the IMF’s Resilience and Sustainability Trust.
Economic Stabilization: The new budget will play a pivotal role in Pakistan’s economic stabilization efforts. Following the completion of a short-term $3 billion IMF program last year, which helped avert a sovereign debt default, the forthcoming budget aims to lay the groundwork for sustainable economic growth and fiscal responsibility.
Future Implications and Legislative Process
The upcoming budget session is scheduled to commence on June 6, with the formal presentation of the budget on June 10. The Speaker of the National Assembly is expected to adjourn the House for two days post-presentation, allowing for detailed scrutiny and discussions.
Conclusion
The 2024-25 budget presentation marks a significant milestone for Pakistan amidst challenging economic conditions and stringent IMF recommendations. The government’s fiscal policies and international engagements, particularly with China, will be critical in shaping the country’s economic future. As Pakistan navigates these complexities, the budget will be a crucial tool in driving economic reforms and ensuring financial stability
