ISLAMABAD: Prime Minister Shehbaz Sharif has approved to present the next budget in parliament on June 10, 2022 with the possibility of unveiling targeted subsidies to the tune of Rs700 billion for the financial year 2022-23.
The federal cabinet will also meet on the same day for granting its nod before unveiling the budget in the National Assembly. The budget for 2022-23 will then be laid down in the Senate, but, under the constitutional arrangement, Senate recommendations will be considered by the National Assembly. The NA will be authorised to approve the budget and the Finance Bill for 2022 during the approving process.
It’s a challenge for the budget makers to present a budget for the next fiscal year acceptable to the IMF as well as the people. Under the IMF programme, the government will have to hike both POL products and electricity prices manifold, so the consumers belonging to low-income groups would be protected through targeted subsidies.
Pakistan has been facing a risk of default if the IMF programme is not revived mainly because of rapidly-depleting foreign currency reserves held by the State Bank of Pakistan.
The foreign reserves held by the SBP nosedived by $6 billion in the last eight weeks and stood at $10.1 billion. The exchange rate is witnessing an immense pressure and the Pak rupee continued sliding against the US dollar.
The rupee crossed its psychological barrier and crossed Rs200 mark against the dollar. If there is no major injections of dollar inflows in the coming weeks, the risk of default will be hovering on the economic horizon of the country. Prime Minister Shehbaz Sharif has recently talked to his Chinese counterpart and got the assurance that the rollover of outstanding $2.4 billion would be done soon.