Finance ministry rules out chances of a mini-budget

The finance ministry has rejected any possibility of a budget adjustment midway through the fiscal year, asserting that the current economic situation reflects the effectiveness of financial policies and lays the groundwork for financial stability, reported Express News on Thursday.

In a statement, the ministry noted that the economic indicators, particularly inflation, growth in large-scale manufacturing, and import trends, align with government projections and expectations. "There is no justification for adjustments to the budget at this stage," the spokesperson said.

The ministry highlighted that the International Monetary Fund (IMF) has recently revised its forecasts regarding economic indicators, with its estimates now closely aligning with the ministry's projections.

For instance, the consumer price index-based inflation for the first quarter of the current fiscal year was recorded at 9.2%, significantly lower than the government's estimate of 10.2%.

Additionally, the IMF has revised its inflation forecast for fiscal year 2024, lowering it from 12.7% to 9.5%, reflecting a 3.2% decrease.

The ministry stated that any discrepancies between actual and projected economic figures should be viewed as integral to the models used for policy formulation and budget planning.

Regarding large-scale manufacturing, the ministry anticipates achieving a quarterly growth target of 0.9%, noting that growth in July exceeded expectations at 2.52%.

Despite a temporary decline in August, the textile sector, which holds a significant 18.2% share in manufacturing, is recovering after two years of contraction.

The automobile sector also experienced substantial growth during the first quarter. The ministry affirmed that the performance of the LSM sector aligns with economic goals, highlighting its role in sustainable revenue generation and stability.

Data for the LSM growth rate is still pending for the entire quarter, as figures for July and August have been released. The ministry cautioned against premature conclusions regarding this critical sector’s economic growth.

According to the ministry, the actual import volume for the first quarter reached $14.219 billion, compared to the estimated $14.062 billion. This underscores the positive impact of imports on revenue collection.

The IMF has also adjusted its forecast for Pakistan's imports this fiscal year, reducing its estimate from $60.5 billion to $57.2 billion, which is now closer to the government’s estimate of $57.3 billion.

Furthermore, imports rose by 15.7% in the July-September quarter of fiscal year 2025, necessary for the recovery of manufacturing and production sectors. The ministry noted that declining inflation, decreasing interest rates, and lower borrowing costs are favourable for the economy.

It stated that understanding economic indicators and their accurate reflection involves considering monthly and seasonal trends.

The ministry addressed media reports that misrepresented the economic situation based on erroneous assumptions, dismissing concerns regarding the IMF’s $7 billion package as unfounded and contrary to facts.

It asserted that such reports reflect a lack of awareness of key economic indicators and that claims regarding inflation, large-scale manufacturing, and import targets are based on incomplete and inaccurate data, misleading the public. It urged caution against such assertions, which do not align with the government's published economic goals.