Finance Minister Miftah Ismail made a preposterous claim that Pakistan has come out of a financial crisis after the increase in petroleum prices, and hence there is no need to declare an economic emergency.
There is still no word on whether the IMF will restore the bailout programme despite the government increasing fuel prices twice in quick succession. Within a span of a fortnight, the government increased by Rs30 twice to a historic high of Rs209 per lite. Another raise is on the cards just days before the coalition government presents the federal budget.
While citizens are reeling from the effects of skyrocketing inflation and supercharged petrol prices, the government faces an uphill task in presenting a balanced which placates the IMF and also attempts to provide some relief to the common man. This is easier said than done as the economy is on the verge of collapse and the government still wants to keep its voter base content.
Ahead of the budget, the government took the tough decision to remove all fuel and power subsidies to revive the bailout programme. The IMF wants even more fiscal measures and is now breathing down the government’s neck. And the global economy is on the verge of a serious downturn. Thus, the upcoming budget is will be one of the toughest ever.
The coalition government is presenting the budget just a couple of assuming power. It can deflect blame towards the PTI but will still face the fallout. The government is stuck between a rock and hard place, whether to appease the IMF or the people. Any attempt to placate the global financial institution will affect the next elections and balancing them will be a gargantuan task.
There are already indications this will be an IMF budget rather than a people-friendly budget. The government will have to announce austerity measures in the budget. A decrease in allowances and other privileges of government is a welcome decision but a lot more needs to be done. The question remains where the funds for relief programmes will come from or whether it will be IMF’s budget.
