Pakistan will present its annual budget for the financial year 2024/25 on June 10, two government sources said on Friday, ahead of seeking a new International Monetary Fund (IMF) loan.
The budget was originally due to be presented on June 7 but was delayed because of Prime Minister Shehbaz Sharif’s visit to Beijing from June 4-8, said the two sources, a top finance ministry official and an official close to the prime minister.
They spoke on condition of anonymity as they are not authorised to disclose the information. The information ministry did not respond to a request for comment.
Finance Minister Muhammad Auragzeb, who will be accompanying Sharif to Beijing, will present the budget, which the finance ministry official said would be one of the most crucial ahead of a new loan from the IMF.
An IMF mission held two weeks of technical and policy level talks with Pakistani officials before it left last week to discuss fiscal consolidation measures to lay the groundwork for the new loan.
The talks made significant progress towards reaching a staff-level agreement for an extended fund facility, the IMF said after they concluded.
The IMF had opened discussions on the new loan after Islamabad completed a short-term $3 billion programme which helped stave off a sovereign debt default last summer.
Pakistan is likely to seek at least $6 billion under the new programme and request additional financing from the IMF under the Resilience and Sustainability Trust.
Officials have said the talks focused on the budget targets and structural reforms to contain the fiscal deficit, which including raising tax to GDP, managing energy sector debt, the sale of state-owned enterprises and external financing.
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Analysts at Standard Chartered who recently visited the country to meet with policymakers, banks and investors said there was an expectation that the budget would be contractionary and focused on widening the tax base, rationalising spending and addressing structural weaknesses.
“The budget will also be an important test for the new finance minister, Muhammad Aurangzeb,” Standard Chartered’s Farooq Pasha said in a note to clients.
“A key concern among local stakeholders was the risk that front-loading tough fiscal measures could face a backlash from the public.”
