Pakistan Finance Minister Miftah Ismail on Friday unveiled the budget for the 2022/23 fiscal year starting July, aiming for economic growth of 5 per cent 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 per cent economic growth for 2022/23 fiscal year, starting July, after estimated annual growth of 5.97 per cent for the current fiscal year
*Fiscal deficit target set at 4.9 per cent of GDP for 2022/23 vs revised target of 7.1 per cent in 2021/22
*Tax to GDP ratio set at 9.2 per cent for 2022/23 vs 9 per cent in 2021/22
Risks to economy
*Conflict between Russia and Ukraine poses a risk to Pakistan's economy
*Higher crude oil, and food prices could stoke high inflation
*Monetary tightening and fiscal consolidation may slow down economic growth
Expenditure
*Federal expenditure estimated at 9.5 trillion 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 per cent additional tax on income taxpayers with 30 million rupees annual income
*Expects 300b rupees receipts from the central bank in 2022/23 vs 474 bln rupees in 2021/22
Inflation
* Budget forecasts average inflation of 11.5 per cent in 2022/23 vs 11.7 per cent in 2021/22
* Consumer-price-index-based inflation rose in May to 13.8 per cent year-on-year, the highest in two-and-half years.
* Pakistan raised petrol and diesel prices by around 20 per cent 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 per cent 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 a 5-year tax holiday for the 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 per cent hike in govt employees' salaries
(This story corrects the federal expenditure figure to 9.5 trillion rupees from 9.5 billion rupees)
($1 = 202.00 Pakistani rupees)
