Pakistan: Pakistan, which is facing a severe economic crisis, also plans to borrow at least $23 billion for the upcoming financial year 2024-25, know what the government said in Parliament.

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Islamabad: The cash-strapped Pakistan government has highlighted a number of serious risks to next year’s budget and the medium-term outlook, including lower-than-expected economic growth, unexpected climate or natural disasters, as well as poor performance of public sector entities. In a written statement on fiscal risks presented to parliament, Finance Minister Mohammad Aurangzeb and Secretary Imdadullah Bosal said three risks – higher than expected interest rates, lower than expected non-tax revenue collection and higher subsidies – had the greatest impact on fiscal rates at all levels.

Target not achieved

“Fiscal deficit and debt are rising due to potential financing needs due to reduced revenues, increased subsidy expenditure and higher interest rates,” the statement was quoted as saying in the newspaper Dawn. It stressed the interconnectedness of fiscal policy and the need for a comprehensive approach to deal with fiscal challenges. These risks are also important because a record revenue target of Rs 12,970 billion has been set for Pakistan’s Federal Board of Revenue for the next fiscal year, which is 40 percent more than the target of Rs 9,415 billion during the current fiscal year. The target for the current financial year has not been achieved.

Pakistan made a plan to take loan

Pakistan plans to borrow at least $23 billion in the upcoming fiscal year 2024-25. This also includes bilateral debt of $12 billion. Pakistan follows a fiscal year of July 1 to June 30. According to budget documents, Pakistan’s budgetary allocation of Rs 2,122 billion for defense for 2024-25 is just 1.7 percent of the cash-strapped country’s GDP, the same as last year. However, it is higher than Rs 1,804 billion set for the outgoing fiscal year 2023-24.

Budget presented
Pakistan Finance Minister Muhammad Aurangzeb on Wednesday presented a tax-heavy budget of Rs 18,877 billion for the fiscal year 2024-25. According to the Finance Minister’s speech and various budget documents, the Rs 2,122 billion allocated for the fiscal year 2024-25 is Rs 318 billion more than the Rs 1,804 billion allocated for the outgoing fiscal year 2023-24 ending on June 30.