ghazi52
PDF THINK TANK: ANALYST
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THERE couldn’t have been more challenging times than the present ones for preparing the national budget. The uncertainties related to elections and foreign funding required to cover the massive external account financing gap of about $25bn during the next financial year, amid deepening domestic political crises and unfavourable global economic circumstances, mean that our fiscal authorities would be budgeting this year on hope rather than tangibles.
Add to that the strong compulsion the PML-N-led government must be feeling to appease voters as the monthly price inflation hits another record high of 38pc days before Budget 2024, and it becomes obvious that the present rulers really have their work cut out for them before the next general polls.
It will not be surprising if the Shehbaz Sharif dispensation decides to give a ‘populist’ budget, including a large fiscal stimulus in the shape of development allocations to recoup some of its lost political capital. But this will be disastrous for an economy on the brink of default.
The government has already choked the economy to avoid a default as foreign funding dries up thanks to slumping relations with the IMF.
A populist — or what Finance Minister Ishaq Dar has described as a “welfare-oriented, pro-investment and business-friendly” — budget will be fraught with the risk of Pakistan being pushed deeper into economic depression and away from multilateral and bilateral lenders.
A fiscally irresponsible budget can make a new deal with the IMF even more difficult
The upcoming budget will be more a test of the govt's resolve to stay the course and restructure the economy.THERE couldn’t have been more challenging times than the present ones for preparing the national budget. The uncertainties related to elections and foreign funding required to cover the massive external account financing gap of about $25bn during the next financial year, amid deepening domestic political crises and unfavourable global economic circumstances, mean that our fiscal authorities would be budgeting this year on hope rather than tangibles.
Add to that the strong compulsion the PML-N-led government must be feeling to appease voters as the monthly price inflation hits another record high of 38pc days before Budget 2024, and it becomes obvious that the present rulers really have their work cut out for them before the next general polls.
It will not be surprising if the Shehbaz Sharif dispensation decides to give a ‘populist’ budget, including a large fiscal stimulus in the shape of development allocations to recoup some of its lost political capital. But this will be disastrous for an economy on the brink of default.
The government has already choked the economy to avoid a default as foreign funding dries up thanks to slumping relations with the IMF.
A populist — or what Finance Minister Ishaq Dar has described as a “welfare-oriented, pro-investment and business-friendly” — budget will be fraught with the risk of Pakistan being pushed deeper into economic depression and away from multilateral and bilateral lenders.
