KARACHI, Pakistan – Pakistan’s federal budget for the fiscal year 2023-24 has garnered a range of opinions from experts and industry leaders, as the country aims to secure pending funds from the International Monetary Fund (IMF) and address its economic challenges. The budget, which includes measures such as GDP growth targets, inflation projections, and fiscal deficit goals, will be evaluated by the IMF before the release of $2.5 billion in funds under a lending program set to expire soon.
The budget announcement comes as Pakistan faces financial difficulties, with limited foreign reserves and a need to secure a $1.1 billion loan as part of a $6.5 billion IMF bailout package. The loan has faced delays since November, and the IMF has stressed the importance of restoring the proper functioning of the foreign exchange market, passing a budget aligned with program objectives, and securing credible financing commitments to bridge the existing funding gap.
Opinions on the budget’s effectiveness in meeting IMF requirements and its impact on the economy vary among experts. Ghias Khan, President and CEO of Engro Corp, expressed concerns about the budget’s approach to critical issues such as tax net expansion, education investment, fiscal deficit management, and creating a favorable business environment. Ehsan Malik, CEO of the Pakistan Business Council, criticized the budget for not implementing fundamental reforms, while highlighting positive measures in the agricultural and IT sectors.
Shahid Habib, CEO of Arif Habib Limited, emphasized the challenge of achieving revenue targets without addressing taxation in sectors like agriculture, retail, and real estate. Musadaq Zulqarnain, Director at Pakistan Textile Council, praised the budget for its incentives in the agricultural sector but noted the missed opportunity to adequately tax undocumented real estate and trade sectors. Abdul Aleem, CEO and Secretary General of the Overseas Investors Chamber of Commerce and Industry, considered the budget to be an interim measure lacking stability measures, but acknowledged positive steps in IT, agriculture, and SME promotion.
Additional viewpoints include concerns about the budget’s impact on economic stability, criticism of unrealistic revenue targets, and the need for more substantial reforms to attract foreign investment. While some experts view the budget as in line with IMF expectations, others see it as lacking a path to structural reforms and potential disapproval from the IMF.
As the details of the budget are analyzed, stakeholders will closely examine its provisions and implications for the projected economic growth of Pakistan. The government’s ability to address economic challenges and meet IMF requirements will shape the country’s path to financial stability and growth.