As Pakistan government under the leadership of Prime Minister Shehbaz Sharif presents its first budget for the country’s financial year; it’s a race against time and a rough road ahead for the premier to stabilise the country’s economy.
The financial budget for Pakistan will come with major risks as Islamabad has not materialised its staff level agreement with the IMF (International Monetary Fund) for revival of the US$6bn.
Even though the government claims that the budget is aimed at returning stability to Pakistan’s economic framework, fears of a downside momentum risk persists.
Independent economists are fearful of seeing a massive jump in inflation in the country for over 12 months.
“Keeping in view the current economic condition of the country, inflation may rise up to 20 per cent, which is a huge jump from government’s expected inflation of over 13 per cent in the financial year,” said economist Farhan Bukhari.
“The coming jump will be driven mainly by the recent price increase of about a third in domestic fuel prices, a coming gas tariff increase of 45 per cent and a raise of 40 to 50 per cent in the cost of electricity,” he added.
As per expected forecast, Shehbaz Sharif’s biggest challenge will be to stand ground by making difficult and unpopular decisions, which will definitely have a massive impact on the lives of middle and low-income households, who will be forced to tighten their belts, shrink their expenses and struggle to make ends meet like never before.
The increase in petroleum prices, which saw a Rs 60 jump within one week just recently, coupled with increase in price per unit for electricity, that reflected in prices of commodities also with shopkeepers increasing prices of basic household items, made lives extremely difficult for the locals.
“The spillover is set to be witnessed in increasingly expensive essentials services such as the cost of healthcare and education — just two key ingredients in the life of any mainstream family. Any amount of sugarcoating is set to fall as Pakistanis embark one of the toughest roads ahead in recent memory,” said Bukhari.
On the other hand, the Prime Minister will also continue to face immense political pressure from his arch rival Imran Khan and also internally from coalition government partners, who joined together to form the government after ousting Khan as Prime Minister through a no-confidence vote in the parliament.
The coalition government was formed with an agenda to go into early elections after making required election reforms. This is an additional pressure and exposure to the foreseeable future which keeps this government on uneven ground and uncertain path.