Government Presents 2024-25 Budget Anchored in Sound Fiscal and Debt Management Principles
The government of Pakistan has unveiled its budget for the fiscal year 2024-25, with a focus on sound fiscal and debt management principles. The budget aims to provide a pathway for economic revival and stability, addressing fiscal deficits and reducing inflationary pressures in the short to medium term.
One of the key features of the budget is the emphasis on strengthening the country’s external accounts and improving the balance of payments position. Pakistan has been grappling with a debt trap for years, with both domestic and external debts crippling the economy and creating uncertainty.
The total financing required to meet the expenses for FY25 is Rs8.5 trillion, with a significant portion allocated for domestic financing. The government plans to borrow from banks through T-bills, Pakistan Investment Bonds, and Sukuk Islamic Bonds, as well as from non-bank institutions like National Saving Schemes.
External borrowing is expected to be around Rs666 billion, with the government relying heavily on rollover for external debt servicing. The budget also includes measures to ensure compliance with tax laws, curtail non-essential spending, and revamp state-owned enterprises for improved management and governance.
The budget aims to create fiscal space for enhanced pro-poor spending, climate change mitigation, and the provision of quality public services. The Public Sector Development Programme has been allocated a historically high figure of Rs1.4 trillion for development work in various sectors.
Overall, the budget focuses on economic stability and growth through fiscal consolidation and efficient use of public money. It includes initiatives to support vulnerable sections of society, improve service delivery, introduce sector-specific reforms, and encourage innovation.
The government has set challenging revenue targets for 2024-25, with ongoing reforms at the Federal Board of Revenue aimed at digitization and the use of AI to automate processes. The budget aims to prioritize improvements in the country’s balance of payments position and bring the public debt to GDP ratio to sustainable levels.
With a comprehensive strategy in place, the government is optimistic about the potential impact of the budget on the country’s economic outlook.