Medium-term budget, forecast till 2023 announced by finance ministry

ISLAMABAD: A medium-term budget strategy for the country, as well as a forecast up to fiscal year 2023 (FY23) was announced by the finance ministry on Wednesday.

In its statement, the finance ministry said government guarantees would be brought down by FY23 and the budget deficit would cut to 3%. In light of the geopolitical situation, security needs would have to be bumped up, while provinces will be encouraged to invest in human capital development.

The ministry said it had, therefore, set defense budget targets at Rs1.402 billion for 2021, Rs1.580 billion for 2022, and Rs1.752 billion for 2023.

It added that it aimed for the economic growth rate to be 3% next year, 4.5% in 2022, and 5.1% in 2023. Inflation targets, on the other hand, were set progressively lower, at 8.4%, 6.3%, and 5.1% for 2021, 2022, and 2023, respectively.

It added that it would work on bringing down the fiscal deficit as well, aiming for it to be 5.8%, 4.3%, and 3.0% for 2021, 2022, and 2023, respectively. In addition, the target for the current account deficit was set at $4.6 billion for next year, $4 billion for the year after, and $4.1 billion for 2023.

The finance ministry said its targets for foreign exchange reserves over the next three years were equal to 100 days, 130 days, and five months' worth of imports, respectively.

The tax-to-GDP ratio is to be increased by two percentage points, it said, adding that the targeted total government revenue for 2021, 2022, and 2023 was Rs7.798 billion, Rs9.068 billion, and Rs10.354 billion, respectively.

Rs495 billion, Rs509 billion, and Rs520 billion, respectively, were set as targets for the government's operational expenditure for the upcoming three years, the ministry noted.

The finance ministry underlined that no tax amnesty scheme would be announced next year.