ISLAMABAD: The economic team on Friday told Prime Minister Imran Khan about the challenges faced by the Pakistani economy in the COVID-19 scenario and the prime minister directed them to present a balanced budget with a focus on stimulating economic activity from the next fiscal year.
It was decided that the prime minister would chair a meeting on the overall trajectory of growth, the fiscal situation including FBR performance and expenditure restrictions, the accumulation of the debt situation, the electricity sector and others before the budget so that the next budget could reflect the ruling regime’s thinking.
“In Friday’s meeting, the adviser to the PM on finance presented his point of view regarding the pre-COVID-19 and post-COVID-19 scenarios and challenges before the prime minister with the aim of informing him where the economy is now” official official source confirm to the News here on Friday.
Another official said that it was the government’s desire to convince the IMF to reduce the FBR target from Rs5,103 billion to Rs4,900 billion for the next budget, but sources said that nothing in this matter had so far been resolved.
The business community lobbied to convince the government to distribute more incentive packages in the next budget, but the government was aware that future packages must be linked to their contribution to the growth trajectory.
The Pakistan Business Council (PBC) stated in a tweet on Friday that the upcoming “COVID Budget” needed to generate demand and support supply to minimize unemployment and the impact on poverty. If the government cannot cut its size, it must again borrow from the SBP. Raising taxes will damage the economy, “PBC said.
Official sources said that the special budget proposal did not come in the discussion but after the initial advisory statement to the PM about Finance as a whole the prevailing economic situation triggered debate among the participants on different aspects.
The PM advisor on Finance views that the economy is on a stabilizing path in a pre-COVID-19 situation where the projected GDP growth is more than 3 percent but has dipped to negative 0.38 percent in post-COVID-19 situations in outgoing. fiscal year. Inflation reaching double digits in the pre-COVID-19 scenario has begun to recede before Coronavirus and is projected to decrease further.
The fiscal deficit is under control and the primary deficit has also been excessive but the fiscal slippage occurred after the outbreak of COVID-19 and now efforts are being made to limit it to around 9.6 percent of GDP.