After the launch of Pakistan Economic Survey yesterday, the Finance Minister will release the Budget in Parliament House at 4 o’clock today amidst increasing criticism over the pre-budget document. The second to last budget is expected to be a populous one in order to please the masses before the polls due next year. The budget is expected to raise employee salaries and pensions, energy expenditure and make increments in the defence allocations.
The Finance Minister, Ishaq Dar, presented the pre budget document “Pakistan Economic Survey” on Thursday highlighting the performance of Pakistan’s economy for the outgoing year. The Economic Survey was received with mixed reactions. As the government failed to deliver on almost all of the targets, some questioned government’s policies and their effectiveness during the outgoing year.
The view on budget seems to differ between the observers and the Finance Minister, Mr. Ishaq Dar who continues the rhetoric of projecting every number on its relativity to the previous government. The survey presented yesterday had a political undertone; it constantly made comparisons against the previous PPP led government’s benchmarks. This however, goes on to show the partiality of Pakistan Bureau of Statistics, the department responsible for carrying out the survey. The report was aimed to be a political discourse or at best a comparison between PPP and PML (N)’s economic policies, when it should’ve been about how the current administration had fared in achieving the targets it had set for itself in the previous year. But as they say the devil is in the details, despite the report’s flowery tone and growth achieving connotations, the numbers have a different story to tell.
The soaring deficits; fiscal and current, the balance of payments position, weakening export capacity and decrease in savings and investments have been the key failures released in the survey. The economy continues to suffer from an unstructured foundation; fiscal deficit has gone beyond the target of 3.8 percent which is expected to reach 4.5 percent in the ongoing year. Cost of foreign debt servicing which at the present moment stands at a total of Rs 85 billion may as well cross the Rs 100 billion in the ongoing year. The current account deficit alarm bells have been ringing continuously for the past year, which due to weak export performance and fall in remittances have made the situation quite bleak. Targets for investment to GDP ratio have also declined; the survey reported 15.8 percent ratio of investment to GDP which is well below the target of 17.7 percent. Savings were also down at a total 14.3% missing the target of 16.2%.
With polls due next year, the present government has momentous task of releasing a budget that will shift the tide in their favor. After missing out on accomplishment of key targets, failing on promises ending the load shedding in just 6 months to secure mandate before previous polls, the opposition continues to up its ante by citing campaign speeches from ruling PML (N) leaders. This can only be done by introducing a set of reforms which have long lasting implications on the core of Pakistan’s economy. The cosmetic presentation of Pakistan’s Economic position in the last year and tall claims of joining G20 by 2050 may only end up becoming a cause of ridicule for the sitting government during the campaign in upcoming polls.
However, Pakistan currently is suffering from bottlenecks in energy, infrastructure and reforms sector. The development projects that are being carried out with the help of Chinese government will help Pakistan in developing a basic energy and infrastructure framework but it needs to be backed by investments. As the ratios of investment to GDP continue to fall, the aforementioned developments will bear no fruit for the local economy.
