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Even after the budget, the risk of default deepens on Pakistan, the country’s finance minister could not please the IMF

Islamabad: Pakistan’s Finance Minister Ishaq Dar, who is in deep economic crisis, has presented the budget for the year 2023-2024 on Friday. Presenting it, the Finance Minister said that in this budget, the government has set a target of 6.54 per cent deficit for economic production in the financial year starting from July 1. He said that it is less than seven per cent of the estimate. After the budget of Pakistan, it has become necessary that the International Monetary Fund (IMF) is satisfied with it so that the relief package can be released. Elections are to be held in the country in November, but there is little chance of any relief after the budget.

IMF didn’t like it
According to experts, the budget has failed to impress the IMF. Shahbaz Ashraf, chief investment officer at Karachi-based investment company Ventures, said it was a simple budget with no scope for structural reforms. The IMF on Thursday said it is discussing a budget with Pakistan with a focus on balancing debt sustainability while creating room to increase social spending.

According to Mustafa Pasha, chief investment officer of another company Luxon Investments, after the budget comes, the IMF may now demand more measures for revenue collection. He said that there is no possibility of any staff-level agreement with the IMF from the budget.

IMF not satisfied at all
Finance Minister Dar said that the budget would target total tax revenue of Rs 9.2 billion, or $32 billion. Also, there will be no new tax on the industrial sector. According to him, the budget for the financial year ending in June 2024 will be Rs 2.5 billion i.e. 8. Will go ahead with a target of net external financing of billion dollars. Of this, Rs 1.6 billion, or $5.5 billion, will come through commercial and Eurobond borrowings. However, none of this is going to satisfy the IMF.

Default after three to four months

Abid Hasan, a former World Bank advisor, warned that the chances that the IMF would be satisfied with this budget were less than 50 per cent. He said that Pakistan will not go bankrupt right now but if no new IMF program is started in three-four months, then there are 100 percent chances that this country will become poor. He said that due to the program of IMF, more money will come in the private sector and this can provide some relief.

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