Amid the ongoing economic crisis, Pakistan’s Finance Minister Ishaq Dar unveiled the annual budget for 2023-24 on Friday (June 9) on the floor of the National Assembly. It was a 14.5 trillion rupee (around $50.5 billion) budget, with over half set aside to service 7.3 trillion rupees of debt. This is being deemed as the last budget of the government before the general elections later this year.
One of the key takeaways from the budget speech was when the minister said that the government was not imposing new taxes for the upcoming year.
As quoted by local media outlets, Dar said that the budget is “not an election budget” and is focusing on the “elements of the real economy”. He further added that for the next year, GDP growth had been budgeted at 3.5 per cent, terming it a “modest target”.
The government has set aside about 950 billion rupees for vote-winning development projects ahead of a general election later this year. Other measures include civil service pay rises of up to 35 per cent and a 17.5 per cent increase for state pensions.
The economy of the nation has been stricken by a balance-of-payments crisis as it attempts to service crippling external debt. Months of political chaos have worsened the situation.
The cost of living crisis is also troubling the common people as inflation has rocketed, the rupee has plummeted and the country can no longer afford imports. This has led to a severe decline in industrial output.
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Pakistan defence budget
Pakistan also hiked defence spending by 15.5 per cent and allocated over Rs 1.8 trillion. Dar said that a sum of Rs 1,804 billion has been proposed for defence, which is higher than Rs 1.523 billion allocated last year. The defence expenditure is 15.5 per cent higher than last year, making up about 1.7 per cent of the GDP.
The defence sector expenses are the second biggest component of the annual expenditure after the debt payments, which for the next year would be Rs 7,303 billion and is the biggest single expense of the country. The minister declared a 3.5 per cent GDP growth target for the next year, which is a moderate target.
The minister said that the inflation target for the next fiscal year would be 21 per cent while the budget deficit would be 6.54 per cent of the GDP. He said that the export target would be Rs 30 billion and the target of remittances would be Rs 33 billion.
(With inputs from agencies)
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