Inflation, public debt ‘major risks’ to economy

The coalition government has identified key risks to the next year’s budget and the medium-term macroeconomic outlook, including the current financial and operational performance of state-owned enterprises (SOEs), rising public debt, movement of interest and exchange rates by the State Bank of Pakistan, and climate change. In an integrity statement submitted to parliament required under the Public Finance Management Act as part of the federal budget, Finance Minister Ishaq Dar and Finance Secretary Imdad Ullah Bosal have also highlighted that the Russia-Ukraine war, falling global growth and rising inflation could pose risks to the economic growth and sustainability of fiscal and monetary projections. Strangely though, both the political and bureaucratic heads of the finance ministry did not see any political uncertainty, waning support of the International Monetary Fund (IMF) or upcoming general elections in the first half of the next fiscal year as disturbing events for the recently presented budget and the macroeconomy.