Prime Minister Shehbaz Sharif on Wednesday acknowledged the cooperation extended by provincial governments to address the country’s economic challenges. Addressing the National Economic Council (NEC) meeting, the prime minister said the federal government had taken decisions in the best interest of Pakistan through teamwork. He said the economy faced major challenges but achieved macroeconomic stability through joint efforts. “We took decisions as a team in the best interest of Pakistan,” he told the meeting. Highlighting the challenges facing Pakistan’s economic stability, Prime Minister Shehbaz said that due to regional circumstances, there was a sharp increase in oil prices and the government had provided Rs128 billion in fuel price relief to the people.
The prime minister recalled that queues were seen at petrol pumps in many countries of the world, but timely measures ensured that fuel was available to consumers in Pakistan. The prime minister acknowledged the “full cooperation” extended by provincial governments to address the economic challenges and said that the federal government had been consulting the provinces for several weeks for the upcoming budget. The prime minister said that the discussions also focused on generating additional resources, emphasizing that maximizing resources was a top priority of the government. Prime Minister Shehbaz said that despite various challenges, the government has tried to remain committed to the International Monetary Fund (IMF) program. “We tried to meet the expectations of the people,” he said, adding that the achievements were possible through collective teamwork. The Prime Minister confirmed that ensuring resources for defense is a priority in the upcoming budget, adding that additional funds are needed to address the challenge of terrorism.
Briefing the meeting on the budget proposal and overall macroeconomic indicators, Federal Planning Minister Ahsan Iqbal said the NEC had approved a national development budget of Rs3.66 trillion and set a GDP growth target of 4% for the coming fiscal year. Federal development allocation has been set at Rs1 trillion, provincial development expenditure at Rs2.21 trillion and Rs451 billion for federal enterprises, Iqbal told the meeting. The council also approved the Planning Ministry’s proposal that NEC meetings should be held quarterly. The minister said that the Public Sector Development Programme (PSDP) has declined from 2.6% of GDP in 2018 to 0.6%, stressing that Pakistan needs a “development emergency” to accelerate economic growth. Iqbal noted that 74% of government revenue is being consumed in debt servicing, while Pakistan’s biggest economic challenge remains the external sector.
“We will have to increase foreign investment and exports,” he said. According to Iqbal, the growth target for the agriculture sector has been set at 3.6%, the industrial sector at 4.5% and the services sector at 4.2%. He said the inflation target has been set at 8.2% and water security has been identified as a key priority for Pakistan. The minister reiterated that no new projects will be launched under the Rs1 trillion federal PSDP except those related to education and defense.
