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Pakistan’s new government presents its first budget as it seeks new long-term bailout from the IMF
ISLAMABAD (AP) — Pakistan’s new coalition government presented its first budget in parliament on Wednesday, promising an increase of up to 25% in civil servant salaries and setting an ambitious tax collection target as it talks to the Fund International Monetary on a new bailout continue.
Analysts say the new budget of about $68 billion — up from $50 billion last fiscal year — aims to qualify for a long-term loan of $6 billion to $8 billion from the IMF to help stabilize the economy, which in 2023 almost went into default. payment of external debts.
Pakistan’s fiscal year begins on July 1. Finance Minister Muhammad Aurangzeb said Prime Minister Shehbaz Sharif’s government wants to achieve 3.6% economic growth.
Aurangzeb also said that inflation in Pakistan has dropped to 12%. At one point last year it exceeded 40%, sparking angry protests.
“We are now moving in the right direction,” said Aurangzeb.
The minister announced that Pakistan is setting a challenging target of collecting 13 billion rupees ($44 billion) in taxes, which represents 40% more than in the current fiscal year. He said the government will ensure that the number of taxpayers increases.
Currently, around 5 million of Pakistan’s 240 million people pay taxes.
In talks with the IMF, Aurangzeb said Pakistan will privatize the country’s national airline. Pakistan International Airlines suffered losses and deteriorated over the decades as governments doled out sponsorships, giving airline jobs to their supporters.
Aurangzeb also said the government will encourage the private sector to manufacture solar panels and other equipment in Pakistan, where tens of thousands of people have already installed Chinese-made solar systems in homes, shops, schools, hospitals and factories due to rising electricity tariffs. .