Sindh Chief Minister Murad Ali Shah is scheduled to unveil the province’s budget for the fiscal year 2024-2025 on June 14, with reported plans to propose a 10% to 15% salary increase for government employees. This move, aimed at acknowledging their hard work and dedication, is a key highlight of the budget. However, the budget is expected to exclude funds for new development projects, with a focus on releasing funds for ongoing initiatives.
Concurrently, the federal government is set to reveal the upcoming budget for the financial year 2024-2025, with ambitious fiscal targets aimed at bolstering negotiations for a new bailout deal with the International Monetary Fund (IMF), according to Reuters.
Amid projections of 2.4% economic growth falling short of a 3.5% target for the current year, Pakistan is in crucial discussions with the IMF for a loan ranging from $6 billion to $8 billion to avoid a default in an economy with sluggish growth. Despite recent economic improvements and a central bank interest rate cut, concerns linger about the government’s capacity to pursue reforms in the face of coalition politics and public pressure against inflationary measures. This situation underscores the economic challenges and the importance of these negotiations.
The upcoming budget is anticipated to outline plans for proceeds from privatisation, including the potential sale of a stake in the national airline. However, challenges persist in tapping undertaxed sectors and implementing spending cuts, which could spark opposition from farmers, small traders, and MPs.
As Finance Minister Muhammad Aurangzeb prepares to present the budget, observers and market stakeholders will closely monitor the government’s fiscal strategies and reform agenda in a complex economic landscape.
