Govt to unveil economic survey 2023-2024 tomorrow

The Economic Survey of Pakistan 2023-24 will be unveiled by the federal government at 5 PM on June 11. This pre-budget document will detail the major socio-economic achievements of the outgoing fiscal year. Finance Minister Muhammad Aurangzeb is set to present this document in the National Assembly.

The survey precedes the federal budget for FY 2024-25, which will be presented on June 12. The coalition government led by Pakistan Muslim League-Nawaz (PML-N) is expected to outline ambitious fiscal targets to support their case for a new IMF bailout deal. The Annual Plan Coordination Committee (APCC) has recommended Rs1,221 billion for the federal development program for FY 2024-25, despite severe financial constraints and reductions in development funding under the current IMF program.

The budget for FY 2024-25 is critical as Pakistan seeks to secure a loan between $6 billion to $8 billion from the IMF to prevent an economic default. The IMF has called for increased provincial taxes, especially on agriculture, sales tax on services, and property tax, to address revenue gaps. The budget is anticipated to be contractionary to close the gap between revenue collection and total expenditure.

Last summer, Pakistan narrowly avoided a default with a short-term IMF bailout of $3 billion over nine months. Although fiscal and external deficits have been managed, it resulted in reduced growth and industrial activity, with high inflation averaging close to 30% last year and 24.52% over the past 11 months. The growth target for the upcoming year is set at 3.6%, up from 2% this year and following economic contraction the previous year.

Prime Minister Shehbaz Sharif has committed to tough reforms amid high prices, unemployment, and limited job opportunities, which have increased political pressure on the government. The budget will also highlight targets for proceeds from privatization, with the planned sale of a stake in the national airline marking the first major sale in nearly two decades. This is expected to be the start of a series of sales of loss-making entities, especially in the troubled power sector.