Pakistan to Push Growth to 3.5% Amid IMF Austerity Measures


Its currency has shed almost 30% against the dollar over the last year

Islamabad: Pakistan’s government will present a carefully-knitted together budget for the next financial year as it looks to balance boosting economic growth with the tough conditions imposed by the International Monetary Fund to revive a bailout program.

Finance Minister Ishaq Dar in his speech in the lower house of parliament Friday will lay out a growth target of 3.5 per cent for the fiscal year that starts July 1. The IMF predicted the same forecast for Pakistan in April.

Prime Minister Shehbaz Sharif’s coalition government will seek to trim fiscal deficit to secure a resumption of the IMF’s $6.7 billion program and raise revenue collection to fund its Rs1.15 trillion public sector development program in the new fiscal year.

The government has shared its budget documents with the Washington-based lender to demonstrate its commitment to sticking to the program goals. Its currency has shed almost 30 per cent against the dollar over the last year, its foreign exchange reserves now cover only about one month of imports and there’s at least a $2 billion gap in external funding out of a $6 billion target set out by the IMF.

“The IMF or anybody else can’t object against a decision, if we take it with prudence and within our resources,” Planning Minister Ahsan Iqbal said Tuesday.

Typically, a budget in an election year would be front-loaded with popular measures but the government will be “careful not to create any big mess with IMF,” said Abid Qaiyum Suleri, executive director at Sustainable Development Policy Institute, an Islamabad-based think tank.

Source: Gulf News