![\"Cash-Strapped](\"https:\/\/c.ndtvimg.com\/2023-06\/k95vl30g_pakistan-budget-650_625x300_09_June_23.jpg\"\/ "\\"Cash-Strapped")
<\/div>\nPakistan Prime Minister Shehbaz Sharif blamed his predecessor Imran Khan for the state of the economy.<\/p>\n<\/div>\n
Islamabad: <\/b><\/p>\n
Pakistan’s cash-strapped government unveiled a 14.5-trillion-rupee (around $50.5-billion) budget Friday, with over half set aside to service 7.3 trillion rupees of debt.<\/p>\n
Pakistan’s economy has been stricken by a balance-of-payments crisis as it attempts to service crippling external debt, while months of political chaos have scared off potential foreign investment.<\/p>\n
Inflation has rocketed, the Pakistani rupee has plummeted and the country can no longer afford imports, causing a severe decline in industrial output.<\/p>\n
About 950 billion rupees was earmarked for vote-winning development projects ahead of a general election later this year, while other populist measures include civil service pay rises of up to 35 per cent, and a 17.5-per cent increase for state pensions.<\/p>\n
Presenting the budget to the National Assembly on Friday, Finance Minister Ishaq Dar insisted targets had been prudent.<\/p>\n
“There are general elections in the country soon, but despite that the next fiscal-year budget is prepared as a responsible budget instead of an election budget,” he said.<\/p>\n
Prime Minister Shehbaz Sharif blamed his predecessor Imran Khan – ousted by a vote of no-confidence in April last year – for the morass.\u00a0<\/p>\n
“Our preceding government has battered the economy,” he said.<\/p>\n
‘Poor being humiliated’\u00a0<\/strong><\/p>\n Akhtar Khan Nawaz, a labourer at a fruit and vegetable market in the capital Islamabad, said “the poor were being humiliated”.\u00a0<\/p>\n “(The budget) will be of no use unless inflation is reduced, the poor will only get relief if inflation is eased,” he told AFP.<\/p>\n Sharif said he was optimistic about an extension later this month on an International Monetary Fund (IMF) loan facility crucial to keeping the economy afloat.<\/p>\n “The IMF chief has given his verbal commitment… there is no hindrance,” he said.<\/p>\n The IMF has told Pakistan it needs to secure additional external financing, scrap a swathe of populist subsidies, and allow the rupee to float freely against the dollar before unlocking another tranche of the $6.5-billion facility.<\/p>\n Still, the latest budget sets aside 1.07 trillion rupees for subsidies.<\/p>\n “The government definitely has to take such popular decisions as it is the election year,” said Nasir Iqbal, an economist at the Pakistan Institute of Development Economics (PIDE).<\/p>\n The country failed to meet any economic growth targets for the fiscal year 2022-23, according to a key government report released Thursday, with GDP growth a miserly 0.3 per cent.<\/p>\n Dar said Friday the latest budget was based on GDP growth of 3.5 per cent, although the World Bank projected a less-ambitious two per cent growth in a report issued earlier this week.<\/p>\n It also had an annual inflation forecast of 21 per cent, against a current year-on-year rate of 37.97 per cent.<\/p>\n The economy has also been ravaged by record monsoon floods last year that left almost a third of the country underwater, laying waste to vast swathes of farmland and leaving tens of millions homeless.<\/p>\n But the political crisis remains the biggest risk factor in the months ahead.<\/p>\n Former premier Khan’s hugely popular campaign to return to office spilled into street violence after his brief arrest last month, prompting a massive crackdown on his party including mass arrests and trials scheduled for military courts.<\/p>\n The army holds undue influence over Pakistan politics, having staged at least three successful coups leading to decades of martial law.<\/p>\n Attacks by militants have also risen since the Taliban took control in neighbouring Afghanistan, further undermining the prospect of foreign investment.<\/p>\n On Friday Dar earmarked 1.8 trillion rupees for defence spending – up from last year’s 1.5 trillion rupees. (Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)<\/i><\/p>\n<\/div>\n
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