National and provincial budgets are likely to be presented next week. Before these budgets are presented, bad news has come from the IMF. The IMF has watered down the aspirations of government employees putting them in trouble.
International Monetary Fund increase for the salaries of civil servants in the budget that the government has demanded from Pakistan and the path of fiscal consolidation policies with the nominal target primary budget deficit in the budget, but to the IMF ‘s Both demands will be very difficult to implement.
According to a report, Pakistan’s debt is likely to reach 90% of the value of the country’s economy. In this context, the IMF is urging the government to pursue deficit and debt reduction policies. According to Finance Ministry sources, the IMF is urging Islamabad not to increase the salaries of government employees due to the current difficult economic situation, rising government debt and Pakistan’s decision to seek debt relief from the G20 countries. However, the government is reluctant to accept the demand due to rising inflation.
According to the report, the government could eliminate 67,000 vacancies a year and ban the purchase of vehicles to further reduce costs. The main demand of the IMF is that the government announce a target of 18 184 billion (0.4% of GDP) as a primary budget deficit. According to sources, the government does not expect a significant increase in revenue collection in the next financial year due to the current economic situation. On the other hand, due to inflation, it intends to increase salaries by 10 to 15 percent and pensions by 10 percent.
According to media reports, contrary to the IMF ‘s demand, the government has proposed that the primary target of the budget deficit be set at 1.9% of GDP, or Rs 875 billion. This means that according to the IMF, the budget deficit target will be 7% of GDP, while the federal government is seeing a budget deficit of 8.4% of GDP or Rs 3.9 trillion.
Extracted from City42 News