Pakistan submitted its federal budget for the coming fiscal year, one of three indicators that the International Monetary Fund (IMF) would consider before releasing at least some of the $2.5 billion still owed under a credit programme that expires this month.
The cash-strapped country is taking steps to secure a $1.1 billion loan, part of a $6.5 billion IMF bailout package that has been delayed since November, with more than 100 days passing since the last staff-level mission to Pakistan, the longest such delay since at least 2008.
The resident representative for Pakistan told Reuters on Thursday that Pakistan needed to restore the proper functioning of the foreign exchange market, pass a fiscal year 2024 budget consistent with programme objectives, and secure firm and credible financing commitments to close the $6 billion gap, adding that there was only time for one final IMF board review before the current bailout package expired.
Pakistan is aiming for 3.5% GDP growth, 21% inflation, and a budget deficit of 6.54% of GDP in 2023-24, which is somewhat lower than the current year’s revised forecast of 7%.