Elusive targets

With the economic growth rate falling well below the government expectation, at 2.4%, and the demon of inflation looming large at 26%, as against the targeted 21%, the Economic Survey 2023-24 has put the budgetary tasks in a fix. The only solace is that the current account deficit has been very nearly arrested, and a leap has been made in keeping a pace with exports, enabling the government with the necessary fiscal space to project an ambitious roadmap of do’s and don’ts in the Federal Budget for the coming fiscal year. But what is certain is that servicing the public debt — that has grown nearly 75% of the GDP — will go on to kill the developmental layout and the mileage to provide relief to the masses.

All in all, the pre-budget report tells a story of elusive targets and disappointing key indicators. The FBR tax collection, for instance, did grow by 30.6% to Rs7,361.9 billion (in the July-April period), but is destined to fall way short of the targeted Rs9,415 billion for the full fiscal year. The investment-to-GDP ratio, at 13.14%, slipped to a 50-year low. With a measly 1.25% growth in industrial and services sectors, the neglected agriculture sector — which rather grew by 6.25% as compared to the targeted 3.5% — came up as the sole saving grace, arresting what could have been an awful fall in the growth rate. Adding to the woes, the circular debt crisis in the energy sector persisted and there was no answer either to the loss-making State-owned enterprises — something that has culminated in the realisation that there are no strategic assets and privatisation of the bleeding entities is a must.

What, however, offers a source of comfort is that the economy has entered a stabilisation mode — on the back of measures like cutting down on unnecessary imports and administrative steps like curbing smuggling and misuse of Afghan transit trade. The way to go, per the Finance Minister, is pretty clear: there is no plan B; going to the IMF is the sole solution.