Highlights: Pakistan unveils 2022/23 budget, aims for 5% growth
2022.06.10 18:31
A shopkeeper listens to a customer as he sells groceries at a shop in a market in Karachi, Pakistan June 10, 2022. REUTERS/Akhtar Soomro
By Manoj Kumar
(Reuters) – Pakistan Finance Minister Miftah Ismail on Friday unveiled the budget for the 2022/23 fiscal year starting July, aiming for economic growth of 5% amid pressure to control the fiscal deficit and secure International Monetary Fund bailout money.
These are the highlights from the 2022/23 budget:
GDP/DEFICIT
* Targets 5% economic growth for 2022/23 fiscal year, starting July, after an estimated annual growth of 5.97% for the current fiscal year
* Fiscal deficit target set at 4.9% of GDP for 2022/23 vs revised target of 7.1% in 2021/22
* Tax to GDP ratio set at 9.2% for 2022/23 vs 9% in 2021/22
RISKS TO ECONOMY
* Conflict between Russia and Ukraine poses a risk to Pakistan’s economy
* Higher crude oil, food prices could stoke high inflation
* Monetary tightening and fiscal consolidation may slow down economic growth
EXPENDITURE
* Federal expenditure estimated at 9.5 billion rupees for 2022/23
* Development expenditure set at 800 billion rupees for 2022/23
* Pakistan to spend 699 billion rupees on targeted subsidies in 2022/23
* Defence expenditure set at 1.52 trillion rupees for 2022/23 vs 1.48 trillion rupees in 2021/22
* Budget allocates 90.55 bln rupees for education in 2022/23 vs 90.86 bln in 2021/22
* Pakistan cuts health budget to 19.03 bln rupees for 2022/23 vs 154.49 bln rupees in 2021/22
REVENUE
* Revenue target set at 7 trillion rupees for 2022/23
* Aims to raise 96.41 billion rupees from privatisation in 2022/23
* To impose 2% additional tax on income taxpayers with 30 million rupees annual income
* Expects 300 bln rupees receipts from central bank in 2022/23 vs 474 bln rupees in 2021/22
INFLATION
* Budget forecasts average inflation of 11.5% in 2022/23 vs 11.7% in 2021/22
* Consumer-price-index based inflation rose in May to 13.8% year-on-year, the highest in two-and-half years.
* Pakistan raised petrol and diesel prices by around 20% earlier this month
INTERNATIONAL TRADE
* Pakistan’s export target set at $35 billion for 2022/23
* Import target set at $70 billion for 2022/23
* Trade deficit target set at 2.2% of GDP in 2022/23
* Budget forecasts remittances of $33.2 billion in 2022/23
AUSTERITY MEASURES
* Ban on buying new cars for govt officials
* Aims cuts in fuel consumption by govt officials
* Funds for debt servicing estimated at 3.9 trillion rupees in 2022/23
OTHER INITIATIVES
* To raise tax exemption limit for salaried income taxpayers
* Announces to promote special economic zones to boost manufacturing
* Offers 5-year tax holiday for film production industry
* To set up 250 mini-stadiums to promote sports
* To exempt import of solar panels from tax
* Exempts 30 pharmaceutical products from customs duty
* Proposes 15% hike in govt employees’ salaries
($1 = 202.00 Pakistani rupees)
